COMMISSIONER OF INCOME TAX Vs. C K THAKORE

JUDGEMENT

(1.) THE question which has been referred to this Court under s. 66(1) of the Indian IT Act, 1922, reads as follows:

(2.) THE assessee, who is an ex-Talukdar of Shivraj pur Estate in the State of Gujarat, had granted a lease for mining manganese ore from the lands at Shivrajpur and Bhat, originally on 11th December, 1947, and on the expiry of that lease, a new lease was granted for twelve years thereafter. It is not necessary to refer in detail to all the terms of the lease which have been extensively quoted in the decision in Chhatrasinhji Kesarisinhji Thakore vs. CIT (1962) 45 ITR 512 (Bom), which decision arose out of a dispute with regard to certain amounts received by the assessee during the asst. yrs. 1952-53 and 1953-54 in terms of the said lease of 1947. Under the lease, the Shivrajpur Syndicate Ltd. (hereinafter referred to as "the Syndicate "was to pay annually a sum of Rs. 2,6298-88 as rent and royalty at the rate of 8per cent of the sale value of manganese ore. Clause (i) of Part VII of the lease of 1947 read as follows:

(3.) THE assessee preferred in appeal against this decree before the Gujarat High Court. On the date on which the appeal was disposed of by the Tribunal, the appeal before the High Court of Gujarat had not been disposed of. That appeal was disposed of later on 17th September, 1970, and the appeal filed by the assessee was dismissed with costs. By consent, the judgment of the Gujarat 1959-60 1,02,411 5,46,193 High Court in First Appeal No. 359 of 1963 is now made a part of the record of the case as Annexure "F". We are, informed by the learned counsel for the assessee that the assessee had not farther challenged the decision of the Gujarat High Court. It is convenient to refer to the material finding recorded by the trial Court in the civil suit filed by the Syndicate. THE suit for refund declaration and injunction was filed by the Syndicate on the ground that the payments made to the assessee as local fund cess at the rate of 3 annas in a rupee on rent and royalty was paid under a mistake which was discovered only when the judgment in the reference in Chhatrasinhji Kesarisinhji Thakore vs. CIT (supra) was delivered by this Court on 22nd August, 1958. THE mistake, according to the Syndicate, consisted in their not knowing that the defendant was not entitled to recover the cess on royalty at the rate of three annas per rupee.