Decided on November 26,1976


Referred Judgements :-



- (1.)THE appellant is a large concern manufacturing aluminum metal and fabricated products. It has its factory at Jaykaynagar assansol in the district of Burdwan. The plants in the factory of the appellant are driven by electricity, for the supply of which the factory of the appellant has a power house. The said power house is fed by coal which is raised by the appellant from the colliery situated within the same boundaries of the appellant's said factory. The appellant's factory, power house and colliery are all situated within the same compound and all are owned by the appellant, as contended by the appellant, as a single industrial unit. The appellant states that the distance between the pithead of the appellant's colliery and its power house is very short. The coal consumed in the power house is carried to the power house from the pithead of the said colliery by means of trolley along the train lines belonging to the appellant. It is the case of the appellant that the said colliery has an average annual output of about one lac tonnes of coal. The bulk of that coal, according to the appellant, is consumed by the appellant in the said. power house for the generation of electricity, which is used in the said factory for the production of aluminum as also in the said colliery. A comparatively small portion of said coal is consumed by the boiler in the colliery used for the purpose of haulage work in the colliery. It is the case of the appellant that if after consumption of coal as aforesaid any excess quantity is available the same is sold by the appellant.
(2.)THE question involved in this appeal, is, whether the coal used or transported from the said colliery to the power house for the purpose of the said factory is liable to duty under the cess Act, 1880. The Deputy Collector, burdwan has overruled the objection of the appellant and has held that such coals were liable to duty. The appellant moved the Additional District Magistrate who confirmed the order of the said Deputy Collector. The appellant thereupon, filed an appeal before the Commissioner, Burdwan Division being the appropriate authority, who in his turn has also confirmed the departmental view and has rejected the appellant's contention that such coals removed from colliery for user in the power house were not liable to duty. Being aggrieved by the aforesaid decisions the appellant moved this Court under Article 226 of the Constitution, and by judgment delivered and order passed on the 1st of March, 1974 S. K. Dutta, J. has dismissed the said application. This appeal arises out of the said decision of the learned Trial Judge.
(3.)BY the West Bengal Cess (Amendment) Act, 1964 the new word 'despatch' was inserted in section 4, in the following manner: -"despatch" in relation to coal mine means the quantity of coke and coal despatched from the coal mine. " section 6 of the Cess Act, 1880 was also amended and substituted as follows:-
"the word cess and public work cess shall be assessed- (a) in respect of lands, on the annual value thereof, (b) in respect of coal mines, on the annual despatches there from "
In the objects and reasons of the said amendment it was stated as follows:-
"under section 6 read with Section 72 of the Cess Act, 1880, cess is levied on coal and coke in the State of West Bengal on the basis of the annual net profits from the Collieries. The working of the present system of levy has disclosed some defects and the system seems to have given scope for evasion of payment. It has, therefore, been considered advisable to levy cess on the basis of despatch of coal and coke from collieries as in being done in the State of Bihar. The Act has been passed with this object in view".


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