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PETITIONER: SHAHDARA (DELHI) SAHARANPUR LIGHT RAILWAYCO. LTD.

       Vs.

RESPONDENT: THE MUNICIPAL BOARD, SAHARANPUR

DATE OF JUDGMENT: 21/03/1967

BENCH: VAIDYIALINGAM, C.A. BENCH: VAIDYIALINGAM, C.A. HIDAYATULLAH, M. SIKRI, S.M.

CITATION:  1967 AIR 1747            1967 SCR  (3) 243

ACT: Indian  Tramways Act, 1886 (11 of 1886) and Indian  Railways Act  1890 (1 of 1890)-Narrow-gauge railway between  Shahdara and Saharanpur-Originally registered as a Tramway under  the 1886  Act-Rail.  ways  Act made applicable to  it  in  1907- Company  whether a ’railway’ or a ’tramway’ for the  purpose of   exemption  from  terminal  tax  levied  by   Saharanpur municipality  under item 2 of Schedule B to the rules  under the U.P. Municipalities Act 1 of 1918.

HEADNOTE: The  appellant  company ran a narrow-gauge  railway  between Shahdara  and Saharanpur.  As it operated partly within  the Municipal  area  of Saharanpur the Municipal Board  of  that place sought to subject railway stores and materials brought within the municipal area to terminal tax as provided by the Rules framed under the United Provinces Municipalities  Act, 1916,  as  amended  by Act 1 of 1918.   The  exemption  from terminal tax given to railway stores and materials by item 2 to Schedule B of the said rules was denied to the  appellant company  on  the ground that it was a ’tramway’  and  not  a ’railway’.   The company had been originally  registered  in 1905 under the Indian Tramways Act, 1886, (Act 11 of  1886); in  1907 the whole of the Indian Railways Act, 1890, (Act  1 of  1890) with the exception of s. 135 had been extended  to the   company  by  the   Governor-General-in-Council.    The Company’s  claim  that it was a ’railway’  entitled  to  the exemption under item 2 of Schedule B aforesaid, was rejected by  the Municipal authorities as well as in appeal,  by  the Additional District Magistrate.  The company therefore filed a  writ petition before the High Court which  was  rejected. By special leave appeal was filed to this Court. It  was contended on behalf of the appellant that :  (i)  in the  absence  of  any special definition  contained  in  the provisions   granting   the  exemption  in   question,   the expression  ’railway’ occurring in item 2 of Schedule  B  of the  Terminal  Tax Rules must bear the  commonly  understood meaning  of  a "carriage of passenger send  goods,  on  iron rails"; (ii) by virtue of the definition in s. 311(2) of the Government   of   India  Act,  1935,   and   the   provision corresponding  to it in the Constitution viz., Art.  366(20)

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the appellant’s system though registered under the Tramway.% Act,  was a railway, (iii) the mere fact that s. 135 of  the Railways Act had not been applied to the appellant’s  system was  not a decisive factor against the appellant as  assumed by  the High Court.  It was not in dispute that  appellant’s system had all the features of a railway. HELD:Neither  the  Municipal Act nor the  Terminal  Tax Rules   give  any  special  definition  of  the   expression ’railway’  and there is nothing in the said Act or Rules  to indicate that the word ’railway’ in item 2 of -Schedule B is used only to refer to a ’railway’ registered under the Rail- ways  Act  or  to limit the  generality  of  the  expression ’railway’  in  any way.  Under those circumstances,  if  the appellant was a ’railway’ in fact., as commonly  understood- there  did not appear to be any controversy on the  point-it would be a railway notwithstanding the fact that it was rep. C.I./67-3 244 gistered  as  a  ’tramway’  under  the  Tramways  Act.   The legislature itself had applied the provisions of the Railway Act to the appellant, and the ’appellant also satisfied  the definition of a ’railway’ under the Government of India Act, 1935 and the Constitution. [254B-D] If  the appellant was a ’railway’ otherwise, the  mere  fact that  the provisions of s. 135 of the Railways Act  had  not been applied to it, was of no consequence. [251H] Blackpool  and Fleetwood Tramroad Company v. Thornton  Urban Council, L.R. [1907] 1 K.B.D. 568, Thornton Urban Council v. Blackpool  and Fleetwood Tramroad Company, L.R.  [1909]  AC. 264  and  Tottenham Urban Council v.  Metropolitan  Electric Tramways, Ltd., L.R. [1913] A.C. 702, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1323 of 1966. Appeal  by special leave from the judgment and  order  dated September  10,  1965 of the Allahabad High  Court  in  Civil Miscellaneous Writ No. 3567 of 1965. Niren De, Addl.  Solicitor-General and N. H. Hingorani,  for the appellant. R.K. Garg, D. K. Agarwala and M. V. Goswami, for  respon- dent No. 1. The Judgment of the Court was delivered by Vaidialingam, L In this appeal, by special leave, the  short question,  that arises for consideration, is as  to  whether the  appellant railway is entitled to claim  exemption  from payment of terminal tax, under item 2, of Schedule B, of the rules  framed  by the Municipal Board  of  Saharanpur.   The appellant  will  be  so entitled, if it is  held  to  be  ’a railway’, as contended, on behalf of the appellant. The  High  Court of Allahabad, in its  order  and  judgment, under appeal, has held that the appellant is not a  railway, but only a tramway and, as such, not eligible for exemption, from the tax, in question.  The short facts, leading to this appeal,  may  now be briefly set out.  The  appellant  is  a limited  liability company; and it runs a  railway,  between Shahdara,  in Delhi, and Saharanpur, in the State  of  Uttar Pradesh-a distance of about 95 miles or 148.865 kilo meters. The  appellant  company also operates within  the  municipal area of Saharanpur.  The company was, originally, registered as a tramway, under the Indian Tramways Act, 1886 (Act XI of 1886) (hereinafter called the Tramways Act), on November 20, 1905.   By Notification, No. 5752, dated July 5,  1907,  the

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Governor  General  in  Council  extended  to  the  appellant company,  the whole of the Indian Railways Act, 1890 (Act  I of  245 1890)  (hereinafter called the Railways Act), excepting  the provisions of Section 135. The  Municipal  Board of Saharanpur,  the  first  respondent herein,  imposes a terminal tax, under the provisions of  s. 128(1)(xiii)  of  the United Provinces  Municipalities  Act, 1916, as amended by Act I of 1918.  Under the said Act,  the first  respondent has prohibited the importation  of  goods, within  the local limits of the Saharanpur Municipality,  by rail, until the tax leviable thereon, or in respect thereof, has been paid, in accordance with the provisions of the  Act and  the  Rules.  The Board has also framed  rules  for  the assessment and collection of Terminal Tax, as authorized  by the Government Notification No. 856/XI-D.T. 3, dated May  1, 1919.    The  rules  have  been  amended,  as  per   another notification, No. 5965/XI-D.T. 3, dated September 21, 1939. Item 2, of Schedule B, of, these rules, provides for a  list of  articles  being exempted from payment of  Terminal  Tax. The said item is as follows :               "Railway  stores  and  materials,  which   are               required  for  use  on  Railways,  whether  in               construction, maintaining or working the  same               and which are not removed outside the  Railway               land  boundaries but not stores imported  into               Municipal limits for purchase and  consumption               by  Railway  employees nor stores  with  which               Railway  Cooperative  Stores are  stocked  for               sale to Member." It is the claim of the appellant that, till 1961, the  first respondent  has never imposed any terminal tax, on  ’railway stores and materials’ required for use on the railway of the appellant  company, for the purposes mentioned in item 2  of Schedule  B.  But,  for the first  time,  in  January  1962, according to the appellant, the first respondent imposed tax on  such stores and attempted to make the appellant  liable. The  appellant company protested against this levy,  on  the ground  that,  it  being  a railway,  was  entitled  to  the exemption  provided  in  respect  of  ’railway  stores   and materials, which are required for use on railway’.  But, the first  respondent,  by its order, dated  October  11,  1962, over-ruled  the appellant’s objections in this  regard.   An appeal,  taken by the appellant company, to  the  Additional District  Magistrate,  Saharanpur,  under  s.  160  of   the Municipalities  Act, read with the relevant Rules,  did  not meet  with  success,  as the said  Magistrate  rejected  the appeal, by his order dated May 25, 1965. The  appellant  company filed Civil Miscellaneous  Writ  No. 3567  of 1965, in the High Court of  Allahabad,  challenging the  levy of terminal tax and claimed exemption, under  item 2,  of Schedule B, referred to earlier.  The learned  Judges of  the  Allahabad  High Court,  by  their  judgment,  dated September 10, 1965, dismissed 246 the writ petition.  They were of the view that the appellant company  was  not ’a railway’, but ’a  tramway’  constructed tinder  the Tramways Act.  In this connection,  the  learned Judges adverted to the Railways Act, which defines both  the terms ’tramway’ and ’ railway’.  It is their view that  when a  tramway and a railway, are both separately defined in  an Act, a tramway cannot also be a railway. The learned Judges, of the High Court, then referred to  the fact that so far as the appellant company was concerned, the

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Central  Government had not applied s. 135 of  the  Railways Act,  though all the other provisions of that Act  had  been applied.   They further held that a mere application of  the Railways  Act, in whole or in part, to a tramway,  will  not convert the tramway into a railway and that, in order to  be a  railway,  it  has to be opened, in  accordance  with  the provisions  contained  in Chapter IV, of the  Railways  Act. So,  they concluded that, inasmuch as the appellant  railway was  not  opened, in accordance with the provisions  of  the Railways  Act,  it  had been, from  its  inception,  and  it continued to be, not a railway, but only a tramway.  On this line  of reasoning, the High Court further held that in  the rules   framed  by  the  Municipal  Board,  the   expression ’railway’  must  be  intended to refer  only  to  ’railways’ coming  under  the  Railways Act, and could  not  include  a ’tramway’,  like  the appellant, opened under  the  Tramways Act.   In  consequence,  the claim  of  the  appellant,  for exemption,  was,  according  to  the  High  Court,   rightly rejected  by the authorities.  The result was the  dismissal of the appellant’s writ petition, by the High Court. We  shall  now refer to the main features of  the  appellant company.  The appellant railway is worked by steam, or other mechanical power, and is not wholly within a Municipal area. The railway line comprises narrow gauge track of 2 6" gauge, and  consists  of  main  line,  transportation  sidings  and commercial sidings.  ’Me line passes through four  districts viz.   Saharanpur, Muzaffarnagar, Meerut and  Delhi,  within the  provinces of Uttar Pradesh and Delhi.  The  system  has about  155 level crossings, comprising of Special Class,  A- class, B-class and C-class.  Some of the level crossings are provided  with signalling and interlocking arrangements  and the system takes in 406 bridges, and 26 railway stations’ in all.  The bridges and culverts are maintained, in accordance with the instructions contained in ’Way and Works Manual’ of the  Indian  Railways, and the railway stations  are  fitted with Morse speakers and instruments, for working trains,  as per  general  rules applicable to all  railways.   There  is annual  inspection  of the railway line, by  the  Additional Commissioner   of   Railways  Safety,   appointed   by   the Government,   to   inspect  Indian  Railways.    There   are -arrangements  for through booking of goods and  passengers. From  247 what  is  stated above, it will be seen that  the  appellant company   is  a  ’railway’,  as  commonly  understood,   and described in ordinary parlance. The  Tramways Act was an Act passed to facilitate  the  con- struction and to regulate the working of Tramways.   Section 3(5) defines ’tramway’ as follows :-               " ’tramway’ means a tramway having one, two or               more rails, and includes-               (a)any  part  of  a tramway,  or  any  siding,               turnout,  connection, line or track  belonging               to a tramway;               (b)   any  electrical equipment of a  tramway;               and               (c)   any  electric  supply-line  transmitting               power from               a  generating  station  or  sub-station  to  a               tramway or from a generating station to a sub-               station  from which power is transmitted to  a               tramway." The  expression  ’order’,  under s.  3(6),  means  an  order authorizing the construction of a tramway under the Act, and includes  a  further  Order substituted  for,  or  amending,

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extending  or varying, that order.  There are various  other provisions  in  this Act relating to  the  construction  and maintenance of tramways, orders authorizing the construction of tramways, and other incidental matters. The Railways Act was an Act to consolidate, amend and add to the law relating to Railways in India.  Section 3(1) defines ’tramway’  as  meaning  a  tramway  constructed  under   the Tramways  Act.  or  any special Act  relating  to  tramways. Section 3(4) defines ’railways’ and is as follows               " railway’ means a railway, or any portion  of               a   railway,  for  the  public   carriage   of               passengers, animals or  goods, and includes-               (a)all   land  within  the  fences  or   other               boundary  marks indicating the limits  of  the               land appurtenant to a railway;               (b)all lines of rails, sidings or  branches               worked over for thepurposes   of,   or    in               connection with, a railway;               (c)all   stations,   offices,   warehouses,               wharves, work-shops,manufactories, fixed plant               and machinery and other works constructed  for               the  purposes  of, or in  connection  with,  a               railway; and               (d)   all  ferries,  ships,  boats  and  rafts               which  are  used  on  inland  waters  for  the               purposes  of  the  traffic of  a  railway  and               belong to or are hired or worked by the autho-               rity administering the railway."               248 This  Act also contains various provisions relating  to  the opening  of railways, inspection of  railways,  construction and  maintenance of works, working of railways  and  several other incidental matters.  Section 135, occurring in Chapter X,  containing supplemental provisions, relates to  taxation of railways by local authorities.  That section reads :               "   135.   Notwithstanding  anything  to   the               contrary in any enactment, or in any agreement               or award based on any enactment, the following               rules  shall  regulate the levy  of  taxes  in               respect of railways and from railway  adminis-               trations   in  aid  of  the  funds  of   local               authorities, namely :-               (1)A  railway  administration  shall  not   be               liable  to pay any tax in aid of the funds  of               any   local  authority  unless   the   Central               Government   has,  by  notification   in   the               Official   Gazette,   declared   the   railway               administration to be liable to pay the tax.               (2)While   a  notification  of   the   Central               Government under clause (1) of this section is               in force, the railway administration shall  be               liable  to pay to the local  authority  either               the  tax mentioned in the notification or,  in               lieu thereof, such sum, if any, as an  officer               appointed  in  this  behalf  by  the   Central               Government  may,  having  regard  to  all  the               circumstances  of the case, from time to  time               determine to be fair and reasonable.               (3)The Central Government may at any time  re-               voke  or vary a notification under clause  (1)               of this section.               (4)Nothing   in  this  section  is  to   be               construed    as    debarring    any    railway               administration  from entering into a  contract               with  any  local authority for the  supply  of

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             water  or  light,  or for  the  scavenging  of               railway  premises,  or for any  other  service               which the local authority may be rendering  or               be  prepared to render within any part of  the               local area under its control.               (5)’Local  authority’ in this section means  a               local  authority  as defined  in  the  General               Clauses Act, 1887, and includes any  authority               legally  entitled  to or  entrusted  with  the               control  or  management of any  fund  for  the               maintenance of watchmen or for the conservancy               of a river." The  point to be noted, in this provision, is that unless  a notification  has  been issued by  the  Central  Government, under   sub-s.   (1)  of  s.  135,   declaring   a   railway administration  to  be  liable  to  pay  a  tax,  a  railway administration shall not be liable to pay any tax in  249 aid  of  the  funds of any local  authority.   Section  146, giving power to the Government to extend the Railways Act to certain tramways, is as follows:               "146. (1) This Act or any portion thereof  may               be  extended by notification in  the  Official               Gazette               (a)   to any tramway which is wholly within  a               municipal area or which is declared not to  be               a railway under clause (20) of article 366  of               the Constitution, by the State Government; and               (b)   to  any  other tramway, by  the  Central               Government.               (2)   This  section  does  not  apply  to  any               tramway not               worked by steam or other mechanical power."               We  have  already  pointed out  that  all  the               provisions of the Railways Act, except s. 135,               have been extended to the appellant company.               The  next enactment to be referred to  is  the               Indian  Railway Companies Act, 1895 (Act X  of               1895),  which  provided for  the  payment,  by               railway companies, registered under the Indian               Companies  Act,  1  882, of  interest  out  of               capital  during  construction.   Section  2(1)               defines  ’railway’  as meaning  a  railway  as               defined in s. 3, cl. (4) of the Railways  Act.               Section  3  provided  for  a  railway  company               paying interest on its paid-up share  capital,               out of capital, for the period, and subject to               the  conditions and restrictions contained  in               that  section.  There are other  consequential               provisions, in this Act.               The Indian Tramways Act, 1902 (Act IV of 1902)               was one to apply the provisions of the  Indian               Railway  Companies  Act,    1895,  to  certain               tramway  companies.  The preamble to this  Act               IV  of 1902, stated that it was  expedient  to               apply  the  provisions of the  Indian  Railway               Companies  Act, 1895, to companies formed  for               the construction of tramways ’not differing in               structure  and working from  light  railways’.               This preamble will clearly show that, even  as               early as 1902, the Legislature considered that               though certain systems were called  ’tramways,               substantially   they   did  not   differ,   in               structure and working, from light railways.               The  expression  ’railway’ is defined,  in  s.

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             311(2)  of the Government of India Act,  1935,               as follows :-               "   railway’  includes a  tramway  not  wholly               within a   municipal area."               It  is to be noted that if a system, though  a               tramway,  is  wholly not  within  a  municipal               area, that system will be a ’railway’.  Entry 250 58, of List 1 (Federal List) of the Seventh Schedule to  the 1935 Act, was : "Terminal taxes on goods or passengers carried by railway or air; taxes on railway fares and freights." It is, again, to be noted, that under this Entry, in respect of  a tramway, which is not wholly within a  municipal  area and which will, therefore, be a ’railway’, under s.  311(2), the  levy of terminal tax on goods or passengers carried  by such a system, will be within the competence of the  Federal Legislature. Under Art. 366(20) of the Constitution, the expression  ’rai lway’ is dealt with, as follows : " railway’ does not include- (a)  a tramway wholly within a municipal area, or (b)  any  other line of communication wholly situate in  one State  and  declared  by  Parliament by  law  not  to  be  a railway." It  may be noted here that the appellant’s system  does  not come  within the exclusions mentioned in cls. (a) or (b)  of this  definition.  Entry 89 of List 1 (Union List),  of  the Seventh Schedule to the Constitution, is as follows : "Terminal taxes on goods or passengers, carried by  railway, sea or air; taxes on railway fares and freights."’ It may be noted that the competent legislative body to  levy terminal  taxes  on  goods or  passengers,  carried  by  the appellant’s  system, which will be a ’railway’,  under  Art. 366(20), is the Parliament. The only other Act to be referred to is the Railways  (Local Authorities’ Taxation) Act, 1941 (Act XXV of 194 1 ),  which was an Act to regulate the extent to which railway  property shall  be  liable  to  taxation  imposed  by  an  authority. Section   3(1)   of  that  Act  provided  that   a   railway administration shall be liable to pay any tax in aid of  the funds of any local authority, if the Central Government,  by notification  in the Official Gazette, declared it to be  so liable.   Section 4 provided for the Central Government,  by notification  in the Official Gazette, revoking  or  varying any notification issued under s. 135(1) of the Railways Act. The learned Additional Solicitor-General, appearing for  the appellant, pointed out that the expression ’railway’ had not been defined in the United Provinces Municipalities Act,  or in  the Terminal Tax Rules.  In the absence of  any  special definition   contained  in  the  provisions,  granting   the exemption, in question, the expression ’railway’,  occurring in  item 2, of Schedule B, of the Terminal Tax  Rules,  must bear  the  commonly  understood meaning of  ’a  carriage  of passenger  and  goods,  on iron rails’.  By  virtue  of  the definition, in s. 311(2) of the 1935 Act, and the provision,  251 corresponding  to  it,  in  the  Constitution,  viz.,   Art. 366(20), the appellant’s system, though registered under the Tramways Act, was a railway.  The mere fact that s. 135,  of the  Railways Act, had not been applied to  the  appellant’s system,  is not a decisive factor against the appellant,  as had been assumed by the High Court.  In view of the  various features  of the appellant’s system, and pointed out  by  us earlier,  it  is  argued that the appellant’s  system  is  a

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’railway’,  both in law and in fact.  It satisfies  all  the ingredients of a railway and, if that is so, the  appellants are entitled to the exemption provided for, under item 2  of Schedule B, of the Terminal Tax Rules. On  the other hand, Mr. Garg, learned counsel appearing  for the  respondent Board, pressed before us for acceptance  the various  reasons, given by the High Court, for holding  that the  appellant  is not entitled to claim be  exemption.   In particular,   counsel  pointed  out  that  there  were   two different  enactments, one dealing with ’tramways’  and  the other  with  ’railways’,  being the  Tramways  Act  and  the Railways Act, respectively.  Therefore, there were two diff- erent systems, under two different names, namely  ’tramways’ and  ’railways’, which was clearly known to the  authorities concerned  at  the  time when the Terminal  Tax  Rules  were framed, and so when the expression ’railway’ was used in the exemption  clause,  it must have been the intention  of  the framers  of the Rules to bring, within its ambit,  only  the ’railways’   constructed  under  the  Railways   Act.    The appellant’s system, though called a ’railway’ and though  it might have ill the features of i railway, it is pointed out, nevertheless, that inasmuch is it has been constructed under a different enactment, viz., the Tramways Act, it cannot  be treated  as a ’railway’ for the purposes of  the  exemption. Counsel  also stressed that s. 135 of the Railways  Act  had not been applied to the appellant. We  are not impressed with the approach made by the  learned Judges  of  the  High Court, for negativing  the  claim  for exemption, made by the appellant.  It must be borne in  mind that the expression ’railway has not been defined either  in the concerned Municipalities Act, orthe  Rules; if  such is  the case., the definition must hold the field. Going  by the definition of the expression ’ railway’, containedin s. 311(2)  of  the  Government  of India  Act,  1935,  and  the corresponding provision in Art. 366(20) of the Constitution, the  appellant’s system is a ’railway’.  All the  provisions of  the  Railways Act have been extended to  the  appellant, excepting  s.  135.  In our opinion, if the appellant  is  a ’railway’,  otherwise, the mere fact that the provisions  of s. 135, of the Railways Act, have not been applied, is of no consequence.  We have already referred to the fact, which is not in dispute, that the appellant’s railway passes  through four districts in U.P. and 252 Delhi, and that it has got all the features of a railway, as ordinarily understood. In  this  connection,  we  may  refer  to  certain   English decisions, where the claim, made on behalf of a system,  for being  taxed  at  a  concessional  rate,  had  come  up  for consideration. In  Blackpool  and Fleetwood Tramroad  Company  v.  Thornton Urban Council(1), the Court of Appeal had to consider as  to how  far  the Blackpool & Fleetwood  Tramroad  Company,  the appellant before them, was entitled to the assessment, at  a lower  rate under s. 211 (1) (b), of the Public Health  Act, 1875  (38 & 39 Viet. c. 55).  The material portion  of  that section was :               "the occupier of any land . . . used only as a               canal . . . or as a railway, constructed under               the  powers  of  any Act  of  Parliament,  for               public   conveyance,  shall  be  assessed   in               respect of the same in the proportion of  one-               fourth  part  only  of the  net  annual  value               thereof." The question was as to whether the appellant, in that  case,

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was  a  ’railway’, to whom the said provision  would  apply. The  appellant  company  had constructed  and  maintained  a tramroad connecting two systems of tramways, under the local Acts  of 1896 and 1898.  Various provisions of the  Railways Clauses  Consolidation  Act, 1845, had been applied  to  the tramroad.  The tramroad, in that case, was on rails laid  on sleepers,  fenced off from adjoining land, excepting at  the level crossings of roads.  The Divisional Court had rejected the  claim  of the appellant; but the Court of  Appeal  held that  the  tramroad  was  land  ’used  only  as  a   railway constructed  under  the power of an Act  of  Parliament  for public  conveyance, within the meaning of s. 21 1 (1)(b)  of the  Public  Health  Act, 1875, and that  the  company  was, consequently,  entitled  to be assessed, in respect  of  the said  ’railway’, at onefourth of its net annual value.   The appellants contended that the tramroad was and could only be worked  as a railway and was, in fact and in law, used as  a railway, and, in consequence, they urged that the  tramroad, maintained  by them, is ’land’ used only as a railway.   The Court of Appeal noted that the rails were raised and laid on sleepers,  just as a railway is laid, and that was the  main distinction  between the appellant’s system, and a  tramway, which  ran  along public streets and in grooved  rails.   No doubt,  it was pointed out for the Urban Council,  that  the appellant  company had been incorporated under the  Tramways Act and the very fact that certain provisions of the Railway Clauses  Consolidation Act were applied to  the  appellant’s system  showed  that the appellant was not a  railway.   The Court  of Appeal held that it was impossible to  distinguish the piece of tramroad, owned by the (1)  L. R. [190711 K.B.D. 568.  253 appellants,  from a railway and that the exemption  provided for in the Public Health Act applied to the tramroad of  the appellants  as  it would, to any ordinary  railroad  passing through  parts  where it was not deriving the  full  benefit from the district rates in those parts.  The Court of Appeal also  rejected the contention of the Urban Council that  the tramroad,  owned  by the appellants could be  treated  as  a ’railway’  only  for particular purposes, and  not  for  the purpose  of claiming the exemption under the  Public  Health Act; because, according to the Court of Appeal, a reading of s.  211  (1) (b) of the Public Health Act,  showed  that  it applied  to land used as a railway, i.e., constructed  as  a railway in fact. This  decision  was taken up in further appeal,  before  the House of Lords, whose decision is reported as Thornton Urban Council v. Blackpool and Fleetwood Tramroad Company(1),  and the  decision of the Court of Appeal was confirmed.  In  the course  of  the judgment, after referring to s. 211  of  the Public Health Act, Lord Macnaghten observed, at p. 267 :               "Now  it  cannot be denied that the  rails  on               which the tramcars run, with the embankment or               foundation on which they rest, and  everything               that supports them, do form a road or way, and               that  that road or way was  constructed  under               parliamentary  powers for  public  conveyance.               Is  it ’a railway’?  There is nothing  in  the               Public  Health  Act, 1875, or in  the  earlier               Acts, in which the same provision is found, to               confine  the word ’ railway’ as used in  those               Acts  to a particular kind of railway,  or  to               limit the generality of the expression in  any               way." His Lordship, further observed at p. 268               :

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             "It  seems  to me that if it is a  railway  in               fact, not differing from other railways in any               material  particular,  it  is  nonetheless   a               railways   because  the  promoters  in   their               special  Act chose to call it  a  ’tramroad’-a               very  convenient term to use for the title  of               their Act and the name under which they sought               incorporation.   Nor is it the less a  railway               because  some  only  of the  sections  of  the               Railways   Clauses   Consolidation   Act   are               incorporated  in the special Act, or  because,               if one did not know what the thing really was,               the language used for the purpose of  applying               the sections which are incorporated might seem               to import that it was not, properly  speaking,               a  railway  at  all.  You  must  look  at  the               special  Act  to  see  that  it  confers   the               appropriate  powers of  construction.   Every-               thing else in the Act is, I think, beside  the               question   which   this  House  has   now   to               determine."               (1)   L.R. [1909] A.C. 264.               254 In our opinion, the observations of the House of Lords,  ex- tracted  above, are apposite, to the case on hand.  We  have already pointed out that neither the Municipal Act, nor  the Terminal  Tax  Rules  give any  special  definition  of  the expression ’railway’, and, so far as we could see, there  is nothing  in the said Act or the Rules to indicate  that  the word  ’railway’,  in item 2 of Schedule B, is used  only  to refer to a ’railway’ registered under the Railways Act or to limit the generality of the expression ’railway’ in any way. Under  those circumstances, if the appellant is a  ’railway’ in fact, as commonly understood-there does not appear to  be any  serious controversy on that point-it will be  a  ’rail- way’,  notwithstanding the fact that it is registered  as  a ’tramway’,  under the Tramways Act.  The legislature  itself has  applied the various provisions of the Railways  Act  to the   appellant,  and  the  appellant  also  satisfies   the definition of a ’railway’ under the Government of India Act, 1935,  and the Constitution.  The provisions of  the  Indian Railway  Companies Act, 1895, have also been applied to  the tramways constructed, under the Tramways Act, by the  Indian Tramway  Act  of  1902.  The second  preamble  to  the  last mentioned Act, clearly shows that the tramways, to which the Indian Railway Companies, Act was made applicable, ’#,lo not differ in structure and working from railways’. The  object underlying the exemption under item 2, of  Sche- dule B, to the Terminal Tax Rules, is also not far to  seek. The railways pass through areas where it is not deriving the full benefit of all the amenities provided by the  Municipal Boards.  Therefore, in our opinion, the appellant  satisfies the  definition  of a ’railway’, so to be  entitled  to  the exemption provided under item 2 of Schedule B. Before  we close the discussion, we ",ill also refer to  the decision of th- House of Lords in Tottenham Urban Council v. Metropolitan  Electric Tramways, Ltd.(1). The same  question regarding  the  eligibility of a  ’tramway’  for  exemption, under s. 21 1(1)(b) of the Public Health Act, 1 875, came up for consideration in that case.  From the judgment, it  will be  seen  that  the company were  working,  as  a  connected system,   a  tramway  and  a  light  railway,   which   were constructed  in and along certain public streets and  roads, in  the  district of the urban Council.- The  ’tramway’  was constructed  under  the  Tramway Acts  and  Orders  and  the

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’railway,’  under the Light Railways Act, 1896.   Both  were identical as to the mode of construction and materials used. The  claim  of the company in respect of the  ’railway’,  as such, for assessment at a lower rate. was accepted; but,  so far as the ’tramway’ ",as concerned, the House of Lords held that  it  is not a ’railway’, within the meaning  of  s.  21 1(1)(b), of the Public Health Act, 1875.  The (1) L. R. [1913]1 A. C. 702.  255 reason  given by the House of Lords, for not  accepting  the claim  of the tramway, was that in the great bulk of  public legislation,  relating  to  railways,  the  legislation  has universally  been  understood and interpreted by  Courts  as applying  only  to  that  which  is  popularly  known  as  a ’railway’,  and  not to that which is Popularly known  as  a ’tramway’.   And  special emphasis is laid by the  House  of Lords that the legislature has used the word ’railways’  and not ’railways and tramways’, in s. 211 of the Public  Health Act, 1875. We are only adverting to this decision to show that, on  the basis  of an interpretation placed by the Courts, the  House of Lords held that the word ’railways’, in the Public Health Act,  1875,  will  not take in  ’tramways’.   But,  no  such circumstances, as pointed out by the House of Lords, in  the said decision, exist in the present case before us.  On  the other  hand, the position is -exactly the opposite, as  will be  seen  from the Government of India Act,  1935,  and  the Constitution.   Even applying the popular test,  adopted  by the  House  of  Lords,  in  this  case,  the  appellant   is undoubtedly a .railway’. In  our  opinion, the principles laid down by the  House  of Lords  in Thornton Urban Council v. Blackpool and  Fleetwood Tramroad Company(1), apply to the particular matter on  hand and,  we  hold  that the appellant, being  a  ’railway’,  is entitled  to the exemption under item 2, of Schedule  B,  to the Terminal Tax Rules, in question. We, accordingly, allow the appeal and set aside the judgment of  the  High  Court, and further direct that  a  writ  will issue,  as prayed for by the appellant.  The appellant  will be entitled to its costs, from the first respondent, both in this Court and in the High Court. G.  C.                                                Appeal allowed. (1) L. R. [1909] A. C. 264. 256