Captive coal consumption may form part of net profits, and civil suits cannot bypass the special cess assessment scheme.

Where mining, conversion and sale form one integrated business, the value of coal diverted for use in the assessee's own factories and workshops can be treated as part of the colliery's annual net profits for cess computation. The assessing authority may therefore include captive consumption in the profit base. The special cess statute also provides a complete machinery for assessment, objection, appeal and final determination; accordingly, a civil suit challenging the correctness of the computation is barred, and disputes over net-profit assessment must be pursued only under the statutory remedy scheme.

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Issues: (i) Whether the value of coal consumed by the assessee in its own factories and workshops was includible in computing the annual net profits of the colliery for cess purposes; (ii) whether the civil court had jurisdiction to entertain the suit challenging the computation and levy.

Issue (i): Whether the value of coal consumed by the assessee in its own factories and workshops was includible in computing the annual net profits of the colliery for cess purposes.

Analysis: The annual net profits of a mine are to be ascertained under the Act for the purpose of road cess and public works cess, and the same basis governed the education cess provisions relied upon in the case. The Court applied the earlier principle that where mining, conversion and sale form one integrated business, the profit arising from the mine does not lose its character merely because the extracted mineral is not sold in its raw form. The profit derived from the working of the mine may be identified within the total commercial realisation of the undertaking, and the assessing authority is entitled to take the captive use of the coal into account in computing net profits.

Conclusion: Yes. The value of the coal supplied to the assessee's own factories and workshops was rightly taken into account in computing the profits of the colliery.

Issue (ii): Whether the civil court had jurisdiction to entertain the suit challenging the computation and levy.

Analysis: The Act provided a complete machinery for assessment, objection, appeal and final determination, and Section 102 conferred finality on the appellate decision. The Court held that where a special statute creates the liability and also supplies a self-contained remedial scheme, questions relating to the correctness of computation must be pursued under that scheme. The challenge was to the manner of computation, not to non-compliance with the statute or breach of fundamental judicial procedure, and therefore the civil suit was barred.

Conclusion: No. The civil court had no jurisdiction to examine the correctness of the computation of net profits under the Act.

Final Conclusion: The statutory levy was upheld, and the assessee's suit for refund and declaration failed because the impugned assessment was within the authority of the special cess regime and outside the civil court's competence to reopen.

Ratio Decidendi: Where a special taxing statute provides a complete code for assessment, objection and appeal with finality attached to the statutory determination, the assessee cannot bypass that machinery by a civil suit to challenge the correctness of the computation of taxable profits.

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