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Issues: Whether cess under sections 5 and 6 of the Bengal Cess Act, 1880, is leviable on annual net profits from mines when the ore is not sold as such but is used by the mine-owner in the manufacture of finished products sold thereafter.
Analysis: The charging provisions contemplate levy on annual net profits derived from mines, and the expression is not confined to a sale of the extracted ore in the very form in which it is won. Where mining is only one component of an integrated commercial undertaking and the ore extracted is carried forward into manufacture, the profit attributable to the mining operation may still be embedded in the proceeds of sale of the finished product. The Court held that such profit can be disintegrated and apportioned for the purpose of assessment, and that the absence of a specific express machinery provision does not defeat the charge where the statute otherwise authorises determination of annual net profits. The owner's own consumption of the ore in further manufacture does not prevent the mining operation from yielding profit in law.
Conclusion: The cess was held to be payable on the appellants' mining operations even though the ore was not sold as ore, because profit from the mines could be ascertained from the sale of the finished products.
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