Law:

Section:

SECTION 6 OF THE BENGAL CESS ACT, 1880 - ASSESSMENT OF CESS - RESPONDENT-COMPANY WAS OWNER OF COLLIERY AND PERCOLATED WATER OF ITS MINE WAS BEING PUMPED OUT AND SOLD TO NEIGHBOURING GLASS FACTORY - WHETHER SALE PRICE OF SUCH WATER COULD BE INCLUDED IN ANNUAL NET PROFITS FROM MINE - HELD, ON FACTS, YES - WHETHER SECTION 6 DOES NOT MAKE ANY DISTINCTION AS TO WHETHER INCOME DERIVED IS CASUAL OR A REGULAR ONE AND EVERY INCOME WHICH CAN BE INCLUDED IN PROFIT FROM MINE IS COVERED BY THIS SECTION - HELD, YES Facts The respondent-company was the owner of a colliery and the percolated water of the mine of the respondent was pumped out and sold to a glass factory which required such water for cooling and other purposes. The respondent, by such sale of water, received for the relevant year certain amount which was entered in their profit and loss account as miscellaneous income besides the amount shown as the sale price of coal of the said colliery. When the cess authority assessed cess on this income under the Bengal Cess Act, 1880, the respondent claimed exemption from the assessment of cess in respect of the sale price of water. The Cess Deputy Collector disallowed the claim of the respondent treating the impugned amount as one of the items constituting the annual net profit derived from the mine in the process of extracting coal and by using the respondent's instruments, equipments and staff. On writ, the High Court, however, accepted the respondent's claim. On appeal, the respondent contended that the sale price of water discharged from the mine could not be taken to be a profit from the mine. It was further contended that in any case, the income by sale of water was only a casual income and not a regular/permanent income and, therefore, it could not be assessed to cess. Held There was no doubt that water came out of the mine and that water had got to be pumped out from the mine to save it from being inundated or to enable the working of the mine. But if that water was sold away for a price and an income derived in that way, the same would be a profit from the mine. Even a bare perusal of section 6 of the Bengal Cess Act makes it evident that the income derived by…

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