- (1.) THIS appeal by the State raises, broadly, two questions of fundamental importance, one relating to liability for cess (including education cess), and the other, concerning the jurisdiction of the Civil Court in the matter of determination of the existence or otherwise of such liability. The answer to the first question, depends, primarily, upon the construction of the relative basic statute, [the Cess Act, 1880 (Bengal Act IX of 1880) hereinafter also referred to, for brevity, aptness and convenience, as the Bengal Cess act] and to the second on general principles of jurisprudence, well-settled but often difficult to apply. The answers, again, may have far-reaching consequences, both from the point of view of the State and of the assessee-subject, and require careful and cautious approach, as there is obvious danger of overstepping the mark in either field and landing in grievous error in consequence.
(2.) IT is somewhat strange that the instant questions have arisen only recently although the Statute concerned has been in operation for nearly three quarters of a century and the principles involved are not new but of age long application and ancient origin. This, however, is probably due, in the main, to the added complexities of modern times and some recent intervening laws, and is, obviously, explicable upon and attributable- to growing modern economic consciousness and pressure of changed circumstances. The controversy appeared in its acute form only about two years back before the Patna High Court between this very Company-The Indian Iron and Steel Co. Ltd. , hereinafter referred to also as 'iisco' for brevity and convenience,-and the State of Bihar, where the Company lost under a judgment of that Court, since reported in (1) (1960) 8 Bihar Law Journal Reports, Part 13, dated March 29, 1960, page 210 and the matter was taken in appeal to the Supreme Court. The appellant State before us has thus this advantage that it has in its favor a judicial pronouncement of high authority and almost direct on the point, 'which has to be displaced as erroneous before the Respondent Company can hope to succeed. It is this realisation, which led Mr. P. R. Das, leading Counsel for the Company, to devote a considerable part of his time and arguments to a detailed analysis and dissection of the reasons, underlying the aforesaid judgment of the Patna High Court, and a sub stained criticism of the same and upon, inter alia, the soundness of this criticism depends, to a large extent, the fate of this appeal and the chance of Mr. Das's client's success herein.
(3.) THE instant suit is a sequel to the assessment of the disputed cess and the connected proceedings before the Revenue authorities and, for a proper appreciation of the respective standpoints of the parties in the matter, a brief reference is necessary to the genesis and history of the present controversy. The controversy dates back to the year 1946 and the facts and circumstances, bearing upon it and the institution of the instant suit, are briefly as follows :-The plaintiff-company is a manufacturer of pig-iron and steel materials at their workshops and factories,- hereafter also referred to as 'works', -at Hirapur and Kulti. It is also the owner of the Ramnagar Colliery,- with which we are here directly concerned,-and with coal, raised from its said colliery, it runs its above workshops and factories. The major portion of the coal, raised in its aforesaid colliery, is consumed by its above workshops and factories and the balance only is sold to the public and, since 1944, this sale is being made strictly in accordance with the Colliery Control Order, 1945, under requisite permits issued by the appropriate authorities.;