AYYANGAR, - (1.) THE following Judgment of the court was delivered by
(2.) THESE three sets of appeals raise a common point relating to the validity of the imposition of a cess under ss. 5 and 6 of the Bengal Cess Act, 1880 (Bengal Act IX of 1880, as amended in Bihar), hereinafter referred to as the Act. THESE provisions whose interpretation is the only point for consideration in these appeals run in these terms: '5. All immovable property to be liable to local cess. From and after the commencement of this Act in any district or part of a district, all immovable property situate therein, except as otherwise in section 2(2) provided, shall be liable to the payment of local cess. 6. Cess how to be assessed.-The local cess shall be assessed on the annual value of land s and until provision to the contrary is made by the central Legislature on the. annual net profits from mines and quarries, other than notified mines and from tramways, railways and other immovable property, ascertained respectively as in this Act prescribed; and the rate at which the local cess shall be levied for each year shall(a) in the case of such annual net profits, be one anna on each rupee of such profits; and (b) in the case of the annual value of lands, be such rate as shall be determined for such year in the manner-in this Act prescribed Provided that the rate at which the local cess shall be levied for any one year on the annual value of lands shall not be less than the. rate of one anna and six pies or more than the rate of two annas on each rupee of such annual value. ' The three companies who are the appellants here own certain mines in Bihar. The Tata Iron and Steel Co., Ltd.-appellants in Civil Appeals 587 and 588 of 1961 has taken on lease certain iron-ore mines at Noamundi in the Singhbhum district from where it extracts iron-ore which it utilises in its factory at Jamshedpur for making iron and steel. Similarly, the Indian Iron and Steel Co., Ltd., which is the appellant in Civil Appeals Nos. 590 and 591 of 1961 holds mining concessions for iron and manganese ore at Gua and Monoharpur in the district of Singhbhum and the ore extracted by it is utilised for the manufacture of iron and steel and steel products at the company's factories at Burnpur and Kulti in the district of Burdwan. In the same manner., the Indian Copper Corporation Ltd., which is the appellant in Civil Appeals Nos. 600-601 of 1961, has taken on lease certain mines in the district of Singhbhum and the ore mined by it is manufactured into copper and copper products at its factory at Moubhandar in the same district. The question raised for decision is whether the three appellants could be said to have derived ''annual net profits from the mines' when the ore mined by them is not sold as such but is utilised for the production of finished products which the appellants sell. In view of the nature of the question raised it would not be necessary to set out in detail the facts of each one of the cases and we will content ourselves with narrating a few of the salient facts which preceded the proceedings culminating in the appeals now before us relating to the Tata Iron and Steel Co. Ltd.appellants in Civil Appeals 587 and 588 of 1961 to appreciate generally the antecedent history and the proceedings giving rise to the appeals. The Company was not assessed to the cess on the ore mined by it till 1926, when the company sold some quantity of iron ore extracted by it to the Bengal lion and Steel Co. Ltd. and an assessment to cess under the Act was made against it in respect of that year. Even though it made no sales of iron ore in later years but utilised the ore extracted in its own factory, the company was assessed to and paid the cess on an assumed profit of 12 as. per ton of iron ore mined by it upto 1939- 40 and from the next year onwards the profit was assumed to be a little higher Viz., at Re. 1 per ton. ThiS basis of taxation was varied in the year 1950-51 when it was raised to Rs. 1/4.00 per toil by reason of an agreement between the company and the State government. There were some variations in the basis of the rate at which the profit was computed during the succeeding years but it is unnecessary to detail them.
(3.) FINALLY we come to the assessment in respect of the year 1954-55 with which the present appeals are concerned. For that year the company was assessed by the Cess Deputy Collector on the basis that it had made a profit of Rs. 4/7.00 per ton of iron ore extracted. The company filed an appeal to the Deputy Commissioner and the ground urged by the company was that it was not at all liable to the levy of cess under the Act because it did not sell any ore as such and could not therefore to treated as having made ' any profit from the mines' within the meaning of s.6 of the Act. The Deputy Commissioner rejected this contention but considering that the cess Deputy Collector had not adopted a proper basis for ascertaining the profits, remanded the case for an enquiry as to the cost of extraction of iron ore and for the calculation of other working expenses. The company then filed a revision application to the Commissioner of the Chota Nagpur Division raising the same point about its non-liability to cess but when this was rejected, preferred a further revision to the Board of Revenue. This application met with the same fate and thereafter the company moved the High court of Patna by petitions under Arts. 226 and 227 of the Constitution for quashing the order of the Board of Revenue confirming the order of the Deputy Commissioner remanding the proceedings to the Cess Deputy Collector for enquiry for recomputing the net annual profits of the company for the year. The learned judges of the High court dismissed the Writ application but granted leave under Art. 133 of the Constitution. Civil Appeal 587 of 1961 is the appeal filed in pursuance of the certificate granted by the High court. Civil Appeal 588 of 1961 is an appeal by special leave granted by this court against the order of the Board of Revenue which was the subjectmatter of proceedings in the Writ Petition before the High court. The material facts of the other appeals are similar and need not be set out. It is sufficient to add that the writ petitions of the other two appellants were dealt with by the High court, along with the petition of the Tata Ironand Steel Co. Ltd. and disposed of by a common judgment. In the case of the other two appellants also the two appeals by each are one from the judgment of the High court dismissing the relevant writ petition and the other from the order of the Board of Revenue. It will be seen from the above narration that the question for decision is whether a person could in law be said to derive 'profit' from a mine when the ore extracted is not sold by him as such but is utilised by him for the purpose of manufacturing a finished product which he sells. Before setting out the argument on the basis of which the appellants raise the contention regarding their nonliability to the cess it would be convenient to read a few of the provisions of the Act which bear upon the point in controversy. The long title of the Act reads ''An Act to amend and consolidate the Law relating to rating for the Construction, Charges and Maintenance of District Communications and other Works of Public Utility, and of Provincial Public Works.';