When the cess Authorities assessed cess on this income under the Bengal Cess Act, 1880 for the year 1958 59 the respondent for the first time claimed exemption from the assessment of cess in respect of the sale price of water amounting to Rs.
42,073.00 as one of the items companystituting the annual net profit derived from the mine in the process of extracting companyl and by using the companypanys instruments equipments and staff.
The respondent feeling aggrieved went up in revision before the Commissioner of Burdwan Division but that also met the same fate.
226 of the Constitution which was eventually allowed by the High Court.
As usual with C the companylmines the percolated water which accumulates in the companyliery has to be pumped out and discharged at the surface to prevent inundation of the companyliery and for proper working of the mine.
The respondent went up in further revision before the Board of Revenue but the second revision was also dismissed.
The percolated water of the mine of the respondent companypany was pumped out and sold by the companypany to a neighbouring glass factory, the Hindustan Pilkington Glass works Limited, which required such water for companyling and other purposes The respondent companypany 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 income, besides the sum of Rs.
The Commissioner took the view that the water which is pumped out to save the companyliery from drowning is then sold at vast profit and, therefore, it companyes within the ambit of the term gross earnings and as such was liable to cess.
The respondent companypany had been selling such precolated water in the earlier years also and paying cess there on.
The Cess Deputy Collector of Burdwan by his order dated November 26,1959 disallowed the claim of exemption treating the said sum of Rs.
The respondent companypany took up the matter in appeal before the Collector of Burdwan, who found that the cess levied was number companytrary to the provisions of the Act and the rules freedom there under, as the income was derived by the employment of machinery and staff of the companylmine.
2265 of 1970 From the Judgment dated 10.10.1969 of the Calcutta High Court.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
5,82,000.00 shown as the sale price of companyl of the said companyliery.
42,073,00, although the respondent never claimed such exemption in respect of such sale proceeds of water in the previous years.
Undaunted by these failures the respondent took up the matter before the High Court under Art.
It took great pains to companye to a companyclusion that the water discharged from the mine was number a mineral It was also number land within the meaning of s.6 of the Bengal Cess Act.
The respondent company is the owner of a companyliery situate at Ghusick, Kalapahari within the district of Burdwan.
K. Puri for the Respondent.
6 and 72 of the Bengal Cess Act, 1880 and arises in the following circumstances.
The Judgment 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, 1969 involves the interpretation of ss.
N. Mukherji and G.S Chatterjee for the Appellant.
