JUDGMENT JUDGMENT judgment of court was delivered by MISRA J.-The present appeal by special leave directed against judgment of Calcutta High Court dated October 10, 1969, involves interpretation of sections 6 and 72 of Bengal Cess Act, 1880, and arises in following circumstances. respondent company is owner of colliery situate at Ghusick, Kalapahari within district of Burdwan. As usual with coal mines, percolated water which accumulates in colliery has to be pumped out and discharged at surface to prevent inundation of colliery and for proper working of mine. percolated water in mine of respondent company was pumped out and sold by company to neighbouring glass factory, Hindustan Pilkington Glass Works Limited, which required such water for cooling and other purposes. respondent company by sale of such water received in year 1958-59 sum of Rs. 42,073, which amount was entered in their profit and loss account as miscellaneous income, besides sum of Rs. 5,82,000 shown as sale price of coal of said colliery. respondent company had been selling such percolated water in earlier years also and paying cess thereon. When cess authorities assessed cess on this income under Bengal Cess Act, 1880, for year 1958-59, respondent for first time claimed exemption from assessment of cess in respect of sale price of water amounting to Rs. 42,073, although respondent never claimed such exemption in respect of such sale proceeds of water in previous years. Cess Duty Collector of Burdwan by his order dated November 26, 1959, disallowed claim of exemption treating said sum of Rs. 42,073 as one of items constituting annual net profit derived from mine in process of extracting coal and by using company's instruments, equipments and staff. respondent company took up matter in appeal before Collector of Burdwan, who found that cess levied was not contrary to provisions of Act and rules framed thereunder, as income was derived by employment of machinery and staff of coal mine. respondent feeling aggrieved went up in revision before Commissioner of Burdwan Division but that also met same fate. Commissioner took view that water which is pumped out to save colliery from drowning is then sold at vast profit and, therefore, it comes within ambit of term "gross earnings" and, as such, was liable to cess. respondent went up in further revision before Board of Revenue but second revision was also dismissed. Undaunted by these failures respondent took up matter before High Court under article 226 of Constitution which was eventually allowed by High Court. It took great pains to come to conclusion that water discharged from mine was not mineral. It was also not land within meaning of section 6 of Bengal Cess Act. On these findings High Court observed: "The tenant of mine, particularly of coal mine, is normally under vanishing expenses of sinking new pits, diving galleries, pumping out water and like and some of expenses representing capital might be disallowed as working expenses of colliery but that does not justify authorities, as in this case, to impose cess on sale price of water...... and sale price of such commodity does not form part of annual net profit from mine." High Court referred to large number of cases, English and American and history of Cess Act to arrive at above conclusion. We are of opinion that High Court has gone off track. It was not at all necessary to enter into complicated question whether water oozing out of mine was mineral. In present case, we are concerned only with interpretation of sections 6 and 72 of Bengal Cess Act. Section 6, at material time, that is, for year 1958-59, in so far as was relevant, ran as follows: "6. road cess and public works cess shall be assessed on annual value of lands and, until provision to contrary is made by Parliament, on annual net profits from mines, quarries, tramways, railways and other immoveable properties ascertained respectively as in this Act prescribed." Section 72 reads: "On commencement of this Act in any District and thereafter before close of each year, Collector of District shall cause notice to be served upon owner, chief agent, manager or occupier of every mine, quarry, tramway, railway and other immovable property not included within provisions of Chapter 11; such notice shall be in form in Schedul E contained, and shall require such owner, chief agent, manager or occupier to lodge in office of such Collector within two months return of net annual profits of such property, calculated on average of annual net profits thereof for last three years for which accounts have been made up. Such Collector may in his discretion extend time allowed for lodging such return." key words in these two sections on which fate of this case hinges, are "on annual net profits from mines". precise question for consideration is whether sale price of water pumped out and discharged from mine could be included in annual net profits from mine. If so, cess levied on respondent company was fully justified by section 6. contention on behalf of respondent company is that sale price of water discharged from mine cannot be taken to be profit from mine. We find it difficult to accept contention. There is no doubt that water comes out of mine and that water has got to be pumped out from mine to save it from being inundated or to enable working of mine. But if that water is sold away for price and income derived in that way, why can it not be said to be profit from mine? exercise by High Court in referring to large number of cases of England and America is not of much relevance on problem before us. bare perusal of section makes it evident that income derived by sale of water pumped out from mine is profit from mine. Reliance was placed on Tata Iron and Steel Go. Ltd. v. State of Bihar 1963] 48 ITR (SC) 123. In that case, appellant company was owner of certain mine in Bihar from where it extracted iron ore which it utilised in its factory at Jamshedpur for making iron and steel. Under sections 5 and 6 of Bengal Cess Act, 1880, as amended in Bihar, all immovable property situate in any part of State of Bihar was liable to payment of local cess, which in case of mines was to be assessed on annual net profits from them. For assessment year 1954-55, company was assessed by Cess Deputy Collector on basis that it had made profit of Rs. 4-7-0 per ton of iron ore extracted. appellant claimed that it was not liable to levy of cess under Act because it did not sell any ore as such and could not, therefore, be treated as having made "any profit" from mines within meaning of section 6 of Act. question for consideration was whether person could in law be said to have derived profit from mine when ore extracted is not sold by him as such but is utilised by him for purpose of manufacturing finished product which he sells. contention of appellant company that ore extracted was not sold as such but was used by owner in production of other finished products and, there was no question of owner of ore realising profit from mine, was repelled by this Court and it observed: (at page 140) "In our opinion therefore principle of apportionment resting on disintegration of ultimate profits realised by assessee is implicit in provision like that in section 6 of Act under which profit derived from initial activity is brought to charge where further activities are undertaken by assessee with reference to ore won and profit is realised by sale of end product." principle laid down in this case fully supports contention of appellant in instant case. facts of present case go step further inasmuch as water pumped out from mine was separately sold for price and, therefore, obviously it is covered by provisions of section 6, read with section 72 of Act. contention on behalf of State has considerable force and must be accepted. Counsel for respondent on other hand contended that income by sale of water was only casual income and not regular permanent income and, therefore, it could not be assessed to cess. We see no force in this contention. Section 6 does not make any distinction as to whether income is casual or regular one. All that we are concerned with is whether income derived by sale of water pumped out from mine is included in profit from, mine or not. We have not slightest doubt that income derived by sale of water pumped out from coal mine constitutes profit derived from mine. From foregoing discussion appeal must succeed. It is accordingly allowed and judgment of High Court is set aside. There shall, however, be no order as to costs. *** State of West Bengal v. Ghusick & Muslia Collieries Ltd