The expression "royalty" in Section 6 of the Bihar Cess Act, 1880 should be interpreted in the context of Section 5, which imposes a liability to pay cess on all immovable property. A strict construction of the definition of "royalty" would lead to repugnancy and defeat the purpose of the charging section.

NAGENDRA PRASAD SINGH, J.

1. This application has been filed on behalf of the petitioner for quashing a notice issued by the Certificate Officer requiring the petitioner to deposit the amount mentioned in the said notice, which is payable as the cess under the Bihar Cess Act, 1880 (hereinafter referred to as the Cess Act). The demand notice has been issued for realisation of cess for the period March, April and June 1977 over the coal consumed by the workmen engaged by the petitioner company for which no royalty is payable under the provisions of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as the Mines and Minerals Act).

2. The stand of the petitioner is that as the petitioner is not liable to pay any royalty in respect of coal consumed by the workmen engaged by the petitioner as such there is no question of payment of cess under the provisions of the Cess Act.

3. Sec. 5 of the Cess Act is as follows :-

"All immovable property to be liable to a local cess: - From and after the commencement of this Act in any district or part of a district, all immovable property situate therein except as otherwise in S.2 provided, shall be liable to the payment of a local cess."

Sec.2 which has been referred to in S.5 is not of much importance inasmuch as the said section while saying that this Act shall take effect at once in every district, the proviso thereof exempts certain immovable property within the limit of any municipality under the Bihar and Orissa Municipal Act. Several amendments were introduced in that Act by an Ordinance issued in the year 1975. By Sec.2 of the said Amendment Act definition of royalty was introduced in S.4 of the original Act.

4. The relevant part of S.4 is as follows :-

"4. Interpretation clause :-

In this Act, unless there be something repugnant in the subject or context - xx xx xx xx

"Royalty in respect of mines and minerals means a payment made or likely to be made to the owner of mines and minerals for the right of working the same on every ton or value of such produce, and includes payment which Government may demand for the appropriation of the mines and minerals belonging to the Government."

A new S.6 was also substituted, the relevant part whereof reads :-

"6. Cess how to be assessed : - The local cess shall be assessed on the annual value of lands and until provision to the contrary is made by the Parliament, on, the royalty of mines and quarries, sale value of the other immovable properties including forest produce and annual net profits from tramways and railways ascertained respectively as prescribed in this Act and the rate at which the local cess shall be levied for each year shall be (a) in the case of royalty, the rate will be determined by Government from time to time but it will not exceed the amount of royalty,

xx xx xx xx xx

5. It was submitted that when by amendment royalty has been defined to mean in respect of mines and minerals "any payment made or likely to be made to the owners of mines and minerals for the right of working the same and S.6 says that local cess shall be assessed on the annual value of the land until provision to the contrary is made by the Parliament "on the royalty of mines and quarries" (emphasis added), the expression royalty in S.6 has to be read to mean any amount which has been paid or likely to be paid as royalty. When admittedly there has been no payment and there is no likelihood of any payment of royalty to be made over the coal consumed by the workmen enagaged in the colliery of the petitioner, the demand made by the impugned notice per se is not only arbitrary but without any authority of law.

6. Sub-sections (1) and (2) of S.9 of the Mines and Minerals Act enjoin the holder of a mining lease notwithstanding anything contained in the instruments of lease or in any law in force "to pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee fr