Misra, J. - (1.) The present appeal by special leave directed against the judgment of the Calcutta High Court dated 10th October. 1969 involves, the interpretation of Ss. 6 and 72 of the Bengal Cess Act, 1880 and arises in the following circumstances.
(2.) The respondent company is the owner of a colliery situate at Ghusick, Kalapahari within the district of Burdwan. As usual with the coalmines the percolated water which accumulates in the colliery has to be pumped out and discharged at the surface to 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 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 income. 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 percolated water in the earlier years also and paying cess thereon. 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, although the respondent never claimed such exemption in respect of such sale proceeds of water in the previous years.
(3.) The Cess Deputy Collector of Burdwan by his order dated November 26. 1959 disallowed the claim of exemption treating the said sum of Rs. 42,073.00 as lone of the items constituting the annual net profit derived from the mine in the process of extracting coal and by using the company's instruments equipments and staff.;