LexSTATE OF WEST BENGAL versus GHUSICK & MUSLIA COLLIERIES LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B c D E F G H STATE OF WEST BENGAL v. GHUSICK & MUSLIA COLLIERIES LTD . . Marcb 15, 1985. [0. CH!NNAPPA REDDY AND R.B. MISRA, JJ.J · Bengal Ce~s Act 1880, Sections 6 and '72. Coal mine - Percolated water pumped out. and' sold - Leo;y of cess °On sale price of water - Whether legal and justified. . Words & Phrases 'A'nnual net profit derived from "lines' - Meaning of- Section 6 and 72 Bengal Cess Act 1880. The percolated water of the coal mine of the respondent-Company was pumped out and sold by the Company to a neighbouring glass factory which required such water for cooling and other purposes. The respondent-Com- pany had been selling such percolated water for several years and was paying cess thereon under the Bengal Cess Act, 1880. However for the year 1958. 59 when the cess authorities assessed cess on this income, the respondent for the first tin1e claimed exemption from the assessment of cess in respect of the sale price of water. The Cess Deputy Collector however disallowed the claim of exemption treating the amount in respect of sale price of water as one of the items cons- tituting the annual net profit derived from the mine, In appeal by the respondent-Company, the Collector found that the cess levied was not contrary to the provisions of the Act. The Commissioner dismissed the revision petition, taking the view that the water which is pumped out tO save the colliery from drowning is sold at a vast profit and therefore it comes within the ambit of the term 'gross earnings' and as such was liable to cess. A further revision to the Board of Revenue, was also dismissed. However, the respondent's writ petition to the High Court was allowed, and the order levying cess was quashed, holding that the water discharged from the mine was neither a 'mineral' and also nor 'land' \'.1ithin the meaning of Section 6 of the Bengal Cess Act. • • i I \Vllst BENGAL v. G. M. coll!JlRil!S (Misra, 1.) Allowing the Appeal of the State to this Court HELD : !. The Cess levied on the respondent-Company was fully justified by Section 6 of the Bengal Cess Act 1880. [356A] 2. There is no doubt that water con1es out of the mine and that water' has got to be pumped out from the mine to save it from being inundan~ed oi to enable the working of the mine. But if that water is sold away for a· price and an income derived in that way it cannot be said that it is not a profit frvm the mine. [356B-C] 3, A bare perusal of Section 6 makes it evident that the incon1e derived ... by the sale of water pumped out from the mine is a profit from· the mine. [356DJ 4. Section 6 doeS not make any distinction as to whether the income is casual or a regular one. I357E) Tata Iron ond Steel Co. Ltd. v. The Stote of Bihar, [19631 Supp. I SCR 199 referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2265 of 1970 From the Judgment dated IO. I 0.1969 of the Calcutta High Court. D.N. Mukherji and G.S. Chatterjee for the Appellant. H.K. Puri for the Respondent. The Ju~gment of the Court was delivered by . MISRA J. The present appeal by special leave directed against .)._ the judgment of the Calcutta High Court dated 10th October, J 969 '' involves the interpretation of SS. 6 and n of the Bengal Cess Act, 1880 and arises in the following circumstances. The respondent-company is the owner of a colliery situate at · Ghusick, Kalapahari within the district of Burd wan. As usual with the coalmines the percolated water which accumulates in the colliery has to be pumped out and discharged at the surfa~e tl) prevent inundation of the colliery and for proper working of the mine. The percolated water of the mine of the respondent company was pumped out and sold by the company to a neighbouring glass factory, the Hindustan Pilkington Glass works Limited, which required such water for cooling and other purposes. The respondent A·· B Ci D ~· F G ,. H C' tt98;13 s.d.it. A company by such sale of water received for the year 1958-59 a sum of Rs 42,073.00, which amount was entered in their profit and loss account as miscellaneous inco.n", besides the sum of Rs. 5,82.000.00 shown as the sale price of coal of the said colliery. The respondent company had been selling such precolated water in the earlier years also and paying cess there on. When. the cess B Authorities assessed cess on this income under the Bengal Cess Act, 1880.for the year 1958-59 the respondent f
Excerpt shown. Read the full judgment & AI analysis in Lexace.