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Issues Involved:
1. Whether the coal cess is a fee or a tax. 2. Whether the consignee, being a non-resident, is subject to the Ordinance. 3. Whether the suit is barred by limitation. 4. Validity of the levy of coal cess. 5. Liability of the consignor versus the consignee for the payment of cess. Detailed Analysis: 1. Nature of Coal Cess: The argument that coal cess is a fee and not a tax or duty was raised by the appellant but was not included in the statement of case. The Court emphasized the importance of including all propositions of law in the statement of case as required by the Supreme Court Rules. Since there were no exceptional circumstances, the Court did not allow this question to be raised during the hearing. 2. Extra-Territorial Operation: The appellant contended that the first defendant, being a non-resident, was not subject to the Ordinance due to its lack of extra-territorial operation. However, this contention was also not included in the statement of case and was therefore not entertained by the Court. 3. Limitation: The coal cess should have been collected at the time of delivery in January and February 1947, but the suit was filed in April 1953. The High Court held that the suit was within time under Article 149 of the Limitation Act, which allows a period of 60 years for suits by the Central Government. The appellant argued that Article 120, which prescribes a six-year limitation period, should apply. The Court clarified that Article 149 assumes the maintainability of the suit and refers to the appropriate article of the Limitation Act for the starting point of limitation. Since no specific article applies to the recovery of a statutory cess by a private party, the residuary Article 120 would apply. Thus, the suit was well within the 60-year limitation period. 4. Validity of the Levy: The appellant argued that Ordinance 39 of 1944 was repealed by Ordinance 6 of 1947, and the saving clause fell with the expiry of the repealing Ordinance, making the levy invalid post-Constitution. The Court held that Ordinance 39 of 1944, being a permanent one, continued in force until repealed. The repeal by Ordinance 6 of 1947, which applied Section 6 of the General Clauses Act, did not affect the right to recover the cess for past transactions. The Court concluded that the levy was valid and continued under Article 372 of the Constitution. 5. Liability for Payment of Cess: The High Court held the second defendant liable based on the contractual obligation to pay the amount. The appellant argued that under Rule 3 of the Coal Production Fund Rules, the Railway Administration could only recover the cess from the consignee if the freight charges were collected at the destination. The Court agreed, stating that Rule 3(b) applied and the Railway Administration could not recover the tax from the consignor. Rule 6, which deals with undercharges or overcharges, does not enlarge the statutory liability of the consignor or consignee beyond what is provided in Rule 3. Conclusion: - Civil Appeal No. 183 of 1959 was dismissed with costs to the first respondent. - Civil Appeal No. 184 of 1959 was allowed with costs to be paid by the first respondent.
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