Jagat Narayan, J. - (1.) This appeal arises out of a suit brought by the Maharaja Shri Umaid Mills Ltd., Pali, against the Union of India, the State of Rajasthan, the Collector of Central Excise, New Delhi and the Superintendent of Central Excise, Jodhpur, for various reliefs which was dismissed by the District Judge, Jodhpur, by his judgment dated 3-9-1954.
(2.) The facts which appear from the evidence on record are that the Government of Jodhpur was desirous that someone should set up a cloth mill at Pali and applications were invited from prospective promoters by public advertisement in pursuance of Council Resolution No. 1 dated 30-3-1931. The offer of Seth Magnee Ram Bangur was accepted by His Highness the Maharaja of Jodhpur. vide letter (Ex. 16) dated 22-4-1938. on terms and concessions contained in the enclosure to that letter. It was ordered that a formal agreement should be drawn up by Messrs. Crawford Bailey and Co. Solicitors of Bombay and the Public Works Minister was authorised to execute it on behalf of the Government of Jodhpur, The terms and concessions demanded by Seth Mangee Ram Bangur and the extent to which they were granted are shown in this annexure. A formal agreement (Ex. 1) - was eventually entered into on 17-4-41 which is the basis of the present suit. It was executed by the Public Works Minister on behalf of His Highness the Maharaja of Jodhpur and by Shri Ragu Nath Dass Bangur on behalf of Maharaja Shri Umaid Mills Ltd., Pali. Under Clause 5 of the agreement monopoly was granted to the plaintiff for a period ending on 12-2-1982. It may at once be stated that this monopoly was terminated by His Highness on 2-2-49 by Council Rasolution No. 40 and the plaintiff no longer challenges the validity of this termination. The reliefs which the plaintiff now seeks are based on Clause 6 of the agreement which runs as follows: "The State will exempt or remit the following duties and royalties; (a) State Import duty on materials imported in to the State for use in the construction of buildings and works on the said land. (b) State Import duty on machinery, plant, equipment, electrical installation and fittings and on replacement of spare parts imported by the company for installation or use in the Mill premises, Ginning Factory or Press from time to time. (c) State Import duty on cotton, wool, artificial silk and other raw materials and stores imported by the Company for consumption in the Mill premises, Ginning ' Factory or Press. (d) State Export Duty on yarn, piecegoods both cotton and woollen or other articles manufactured by the company in the Mill premises and by-products thereof exported by the Company from the State territories. (e) State or Federal Excise duly on goods manufactured in the mill premises. If any such duty has to be paid by the Company the State will refund the same wholly to the Company. (f) State or Federal Income Tax or Super Tax or Surcharge or any other tax on income. If any such tax has to be paid by the company the State will refund the same wholly to the company. (g) State royalties on clay, stone and kankar for use in the construction, repairs or maintenance of buildings Or other erections upon the said land". Under Clause 12 of the contract the plaintiff agreed to pay the State a royalty of 7J per cent on the net profits of the company in consideration of the concessions granted to it.
(3.) The above agreement was acted upon by the Jodhpur State so long as it remained in existence. No import or export duty or royalty on clay, stone and kankar was charged from the plaintiff although it was realised from other persons. Under Section 34 of the Marwar Customs Act, 1938, the Government of Jodhpur was empowered to levy excise duty on any specified goods produced or manufactured in Mar-war but no such duty was ever recovered from the plaintiff. There is no evidence on record to show whether any excise duty was actually levied by the Jodhpur State on any goods during its existence.;