TaxTMI 
TaxTMI 
1992 (3) TMI 346
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....iable to pay cess to the District Board under section 5 of the Bengal Cess Act IX of 1880. An unregistered agreement was entered into between the appellant and the District Board of Shahabad, (now Bhojpur) on 7.8.1953. Thereby it was agreed that the company will pay a fixed sum of ₹ 10,000 per annum towards cess in respect of the railway under the Bengal Cess Act IX of 1880 irrespective of the profits or losses made by the company in its railway business . The company paid the cess as per the agreement dated 7.8.1953 for the the period from 1953-54 to 1966-1967. On 27.10.1967, the Collector made a demand of ₹ 9.86,809.33 paise from the appellant intimating therein that State was not bound by the unregistered agreement dated 7.....
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....essed under section 6 on the annual value of lands and, until provision to the contrary is made by the parliament on the annual net profits from mines and quarries and from tramways, railways and other immovable property. Accordingly, the cess payable by the company in respect of its immovable properties on which its railways are constructed and operated is to be assessed on the net profits arising out of the said immovable properties and not on the net profits of the entire business of running the railways which the company derived from its railway undertaking. The Additional Collector made the demand for the sum of ₹ 9,86,809.33 paise as alleged due on account of cess in respect of the land of the company for the years 1953-54 to 1....
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....t which was pending, the company had not sought relief of quashing the said demands in the writ petition filed earlier. The Challenge in the suit as stated was only on the basis of the agreement and not on the ground of illegality. The company did not include the demands for the earlier years in the first writ petition. It is, therefore, contended for the respondents that the second writ petition filed after a long lapse of several years had been rightly dismissed by the High Court. It is also contended that the demands could not be quashed in the civil suit on the ground now urged. The learned counsel for the respondents, therefore, submitted that these appeals should fail. He also placed reliance on the decision of this Court in Trilok Ch....
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....5 of the Constitution of India. The question thus for consideration is whether the appellant should be deprived of the relief on account of the laches and delay. It is true that the appellant could have even when instituting the suit agitated the question of legality of the demands and claimed relief in respect of the earlier years while challenging the demand for the subsequent years in the writ petition. But the failure to do so by itself in the circumstances of the case, in our opinion, does not disentile the appellant from the remedies open under the law. The demand is per se not based on the net profits of the immovable property, but on the income of the business and is, therefore, without authority. The appellant has offered explanat....
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....est to determine delay in such cases is that the petitioner should come to the writ court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence. The test is not to physical running of time. Where the circumstances justifying the conduct exists, the illegality which is manifest cannot be sustained on the sole ground of laches. The decision in Trilok Chand (supra) relied on is distinguishable on the facts of the present case. The levy is based on the net profits of the railway undertaking was beyond the authority and the illegal nature of the same has been questioned though belatedly in the pending proceedings after the pronouncement of the High Court in the matter relating to the subseq....