Bengal Cess Act, 1880 :

Sections 5 and 6-Cess-Payment of-Unregistered agreement entered int~Demands made ignoring such agreement-Legality of.

Constitution of India, 1950: Article 226-Writ-Remedies claimed-Party otherwise entitled to the remedy-Whether disentitled on the sole ground of !aches and delay.

The appellant was engaged in the business of running a light railway and was liable to pay cess under Section 5 of the Bengal Cess Act, 1880.

By way of an unregistered agreement entered into between the appellant and the respondent it was agreed that the appellant would pay a fixed sum of Rs.10,000 p.a. towards cess irrespective of the profit or loss made by the appellant-company. Accordingly the appellant was paying cess from 1953-54 till 1966-67.

In 1967 the respondent intimated the appellant that the State was not bound by the unregistered agreement and raised a demand of Rs.9,86,809.33 towards arrears of cess. The appellant instituted a suit before the sub-Judge to enforce the said unregistered agreement and to restrain the respondents from making any demand in excess of the agreed sum of Rs.10,000 p.a. On the suit being dismissed, the appellant preferred an appeal before the High Court. The appeal was also dismissed. The first of the present appeals, is against the above said judgment of the High Court.

Meanwhile, demand for arrears of cess for the years 1967-68 to 1971-72 was raised against the appellant. In a Writ Petition filed before the High Court the appellant challenged the demand. The High Court quashed the demand. Thereupon the appellant filed another Writ Petition for quashing the demand notices for the years 1953-54 to 1966-67. The High Court dismissed the Writ Petition, and the other appeal has been flied against the said order.

The appellant contended that the net profits of the company was referable partly to its ownership of immovable property and partly to its ownership of movable properties, and only that portion of net profit derived from the use of the immovable property was liable to cess.

The respondent contended that since the appellant did not challenge the demands raised for the earlier years in the first Writ Petition, but only in the subsequent Writ Petition filed after an inordinate delay of several years, its claim was rightly rejected.