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Interpretation of the term "annual net profits" under Bengal Act IX of 1880 for the purpose of assessing "cess" on royalty received from coal mines. Analysis: The plaintiff, who owns landed property in Bengal and leases part of it for coal mining, challenged the assessment of "cess" under Bengal Act IX of 1880 on the royalty received from the coal mines. The Act allows for the levy of "cess" on immovable property, including mines, based on the "annual net profits." The plaintiff argued that royalty should not be considered part of the "annual net profits." The Subordinate Judge of Burdwan initially dismissed the case, a decision upheld by the High Court of Calcutta, leading to the plaintiff's appeal to the Privy Council. The central issue in this case revolves around the interpretation of the term "annual net profits" as used in Sections 6 and 72 of the Act. Section 6 specifies that "road cess and public works cess shall be assessed on the annual value of lands and on the annual net profits from mines." Chapter V, starting with Section 72, outlines the procedure for assessing and levying cesses on mines. Section 72 mandates the submission of a return of the net annual profits of the property, not just the mine owner's profits, within a specified timeframe. The Privy Council rejected the plaintiff's argument that "net annual profits" should only refer to the profits of the individual working the mine. The Council emphasized that the term encompasses the general net profits of the property, including royalties received by the landowner. Sections 76, 80, and 81 further support this interpretation by focusing on the property's overall profits rather than individual profits. The Act's intent is to ensure that all beneficiaries of the infrastructure development funded by the cess contribute to its maintenance. Ultimately, the Privy Council concurred with the lower courts' decision that the royalty received by the plaintiff constitutes part of the net annual profits of the mine, warranting the assessment of cess. The Council dismissed the appeal and upheld the assessment, emphasizing that the plaintiff had not suffered any prejudice due to procedural irregularities in the assessment process. The plaintiff's appeal was dismissed with costs, affirming the correctness of the assessment under the Bengal Act IX of 1880.
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