LexTATA IRON AND STEEL CO. LTD. versus THE STATE OF BIHAR
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1 S.C.R. SUPREME COURT REPORTS 199 appellants will be entitled to their costs, but one set of hearing fees will be taxed. Appeals and writ petitions aUowed. TATA IRON AND STEEL CO. LTD. v. THE STATE OF BIHAR (And connected appeals) (B. P. SINHA, C, J., S. J. IMAM, K. SuBBA RAo, K. N. WANCHOO, J. c. SHAH AND N. RAJAGOPALA AYYANGAR, jj.) Gess-Annual net pro,fits from mines-Uvy of cess there- on-Mine- owner extracting ore and manufacturing productJJ tkert- from-Legality of cess on ore extracted-Bengal Gess Act, 1888 (Ben. 9 of 1880), as amended in B,:/zar, ss. 5,6, 72. The appellant company was the owner of certain mines in Bihar from where it extracted iron ore which it utilised in its factory atJamshedpur for making iron and steel. Under ss. 5 and 6 of the Bengal Gess Act, 1880, as amended in Bihar, all immovable property situate in any part of the State of Bihar was liable to payment of local cess which, in the case of mines, was to be assessed on the annual net profits from them. For the assessment year 1954-56, the company was assessed by the Gess Deputy Collector on the basis that it had made a profit of Rs. 4-7-0 per ton of iron ore extracted. The appellant claimed that it was not liable to the levy of cess under the Act because it did not sell any ore as such and could not therefore be treated as having made "any profit" from the mines within the mean- ing of s.6 of the Act. The question was whether the appellant company could in law be said to have derived "profit" from the mine when the ore extracted was not sold by it as such but was utilised by it for the purpose of manufacturing finished pro- ducts which it sold. HeU, that on the true construction of ss.5, 6 and 72 of the Bengal Cess Act, 1880, as amended in Bihar, where activities The A.mal:•m•l•I Coalfields Ltd. v. The Janapada Salho, Chhi11dwara Gojendragadkar, f, 1962 &ptnnber £1. 1962 Tata Iron and Steel Co., Ltd. v. The State of Bihar 200 SUPREME COURT REPORTS [1963] SUPP. other than mere winning the ore are carried on by an assessee with a view to convert the ore into a finished product and there is a transaction of sale of the ultimate product, the profit derived from the working of the mine is imbeded in the final realisa- tion, and the profit which accrues to the a,sscssee from the mining operation can be disintegrated and ascertained, and a tax levied thereon. Kikabha-i Pte1nchand v. Co1nnii.ssioner of lncortie-tax, Bom- bay, [1954] S.C.R. 219, distinguished. Conirnissioner of Income-tax, Bombay v. Ahmedbhui Umer- bhai & Co., Bombay, [1950] S.C.R. 335 and Anglo-French Textile Co. Ltd. v. Commissioner of Income-tax, Madras, [1950] S.C.R. 523, relied on; Commis8ianer of Income-tax, Madras v. Dewan Bahadur S. L. Mathia.,. (1938) L. R. 66 I. A. 23 and Cmnmissianer of Income-tax, Bombay City I, Bmnbay v: Bai Shirinbai K. Kooka, [1962] Supp, 3 S. C.R. 391, considered. CrvIL APPEALLATE JuR!SDIOTION : Civil Ap- peals Nos. 587, 588, 590, 591, 600 and 601 of 1961. Appeals by special leave from the resolution dated May 12, 1959, of the Board of Revenue, Bihar in Cases Nos. 49, 233 and 234 of 1958 and from the Judgment and Order dated February 18, 1960, of the Patna High Court in Misc. Judi. Cases Nos. 529, 530 and 531 of 1959. M. 0. Setalvad, Attorney-General for India, N. A. Palkhivala and P. K. Ohatterji, for the appel- lant (In C. As. Nos. 587 and 588 of 1961.) Lal Narayan Sinha and D. P. Singh, for the respondent (In C. As. Nos. 587 and 588 of 1961). M. 0. Setafoad, Attorney-General for India, A. V. Viswanatha Sastri, R. Ohoudhri and D. N. Mukherjee, for the appellant (In C. As. Nos. 590 and 591 of 1961). Lal Narayan Sinha, D. P. Singh, S. 0. Agarwala, R. K. Garg and M. K. Ramarnurthi,_ for the respondent (In C. As. Nos. 590 and 591 of 1961). I S.C.R. SUPREME COURT REPORTS 201 B. C. Ghosh and P. K. Chr~tte1jee, for the ap- pellant (In C. As. Nos. 600 and 601 of l!Jul). Lal Narayan Sinh1i and S. P. Varma, for the respondent (In C. As. Nos. 600 and 601 of 1961). 1962. September 24. The Judgment of the Court was delivered by AYYANGAH, J.-These three sets of appeals raise a common point relating to the validity of the imposi- tion of a ccss under ss. 5 & 6 of the Bengal Ccss Act, 1880 (Bengal Act IX of 1880, as amended in Bihar), hereinafter ref erred to as the Act. These provisions whose interpretation is the only point for consider- ation in these appeals run
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