THE STATE OF WEST BENGAL versus THE INDIAN IRON & STEEL CO. LTD.

Citation: [1971] 1 S.C.R. 275 · Decided: 16-04-1970 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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275 
THE STATE OF WEST BENGAL 
v. 
THE INDIAN IRON & S1EEL CO. LTD. 
April 16, 1970 
[J. C. SHAH AND K. S. llEGDB, JJ.] 
Bengal Cess Act, 1880, Ss. 72, 102-Value of coal suppliod from col-
liery to owner's factory-Whether cess leviable thereon-Mode of compu-
tation of value--// can be question'd in suit or only by procedure pres-
cribed by Act. 
The respondent C~pany, which was itself primarily engaged in the · 
manufacture of iron ond steel products, owned a colliery. The coal raised 
from this colliery was mainly used in the respondent's iron and steel fac-
tories though some coal was also sold to outsiders. In the years 1946-47, 
1947-48 and 1948-49, the respondent Company lodged returns with the 
Collector of Burdwan under s. 72 of the Bengal Cess Act, 1880 in which 
the Company valued the coal supplied by the colliery to its factories at 
o rate per ton less than the actual cost of raising the coal, an_d computed 
the profits of the colliery on that basis. The Cess Deputy Colfecfor, who 
was the assessing authority, rejected the returns and computed the profits 
of the colliery for the putpose of assessment to the cess by valuing the 
coal at the control rate in force at the time. The assessing authority 
under the Bengal Primary Education Act, 1930, the provisions of which 
were similar to the Bengal Cess Act, also computed the education cess 
payable by the. Company for the years 1946-47 and 1947-48 on the same 
basis. The Respondent Company paid the amounts assessed as cess under 
each Act under protest and thereafter instituted a suit for refund of the 
amount which it contended was collected from it in excess. It also prayed 
for a declaration that it had earned no profits from the colliery <)uring 
the three years from the coal consumed in its own steel factories and a• 
such no cess could have been assessed and levied on it. The Trial Court 
decreed the suit ·anrl an appeal to the High Court .was dismissed. 
In the app"8l t~ this Court it was contended inter alia on behalf ot 
the Respondent (i) that supply of coal made by the colliery to its factories 
r.ould not be coMid~red a sale and without a sale, there could be no prolit; 
-0ccordingly in comnming the. profit; of the colliery the value of the coal 
supplied to its factcries should not have been taken into consideration; 
and (ii) that in view of the decision of this court in Tata Iron and Sttel 
Company's case it was not open to the assessing authority to value the 
coal supplied to the tactories at the controlled rate; he should have dls-
h1tegrated the ultim 1le profits earned and found out the profit earned by 
the mine. 
HELD : Allowi"~ the Appeal ; 
(i) Indeterminio~ the profits earned by the colliery, it was op 'n to 
the assessing authority to take into consideration the value of the coal 
supplied to the factories and workshops of the Respondent Company. 
!281 BJ 
Tata Iron and Steel Co. Ltd. v. The State of Bihar, 
[1963] 
Supp. I 
S.C.R. 199, followed. 
· 
(ii) The mode of computation is a matter for the assessing authoritie• 
except where the computation is done in violation of any provision 
276 
iUPREME COURT lll!PO!l TS 
[ 1971] 1 S.C.R. 
law. If the respondent company· was aggrieved by the mode cif compu-
A 
talion adopted 
by the asgessing autliority, it should have agitated that 
question firstly before that authority and thereafter before the appellate 
authority. Having not done so, the company cannot be permitted to raise 
that question in the present suit; otherwise the finality contemplated by 
s. 102 of the Act would become illusory. The levy under the Act is im-
posed by a special law which law also provides its own remedies for cor-
recting the errors that may be committed by the assessing authority. Where 
B 
a liability not ex.isling previously is created by a statutr- which statute at 
the -same time provides a special or particular remedy for correcting any 
mistake that may occur in its enforcement the aggrieved party must adopt 
the form of remedy given by the statute and no other. [281 D-H; 282 A-BJ 
Collector of South Arcot v. Mask & Co., 67, I.A. 222, distinguished. 
Dhulabhai and Ors. v. The 
State of Madhya 
Pradesh 
and Anr. 
C 
[1968] 3 S.C.R. 662, referred to. 
CIVIL APPEL!JATE JURISDICTION : Civil Appeal No. 1729 of 
1966. 
Appeal from the judgment and .decree dated April 17, 1962 of 
the Calcutta High Court in Appeal from Original Decree No. 127. 
of 1955. 
P. K. Chakravarti and Prody

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