1968 (5) TMI 47 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Preliminary objection regarding alternative remedy.
2. Definition of "goods" under the Punjab General Sales Tax Act and the Central Sales Tax Act.
3. Whether electric energy qualifies as "goods" under the relevant Acts.

Issue-wise Detailed Analysis:

1. Preliminary Objection Regarding Alternative Remedy:
The respondents contended that the writ petition should not be entertained due to the availability of an alternative remedy. The court dismissed this objection, noting that the relevant sections of the Punjab General Sales Tax Act, specifically sections 11, 20, and 21, did not provide for an appeal or revision against the refusal to register a dealer. Section 22, which allows for a question to be referred to the High Court, was also deemed inapplicable. The court concluded that there was no other remedy available to the petitioner, making the petition under Articles 226/227 of the Constitution competent.

2. Definition of "Goods" Under the Punjab General Sales Tax Act and the Central Sales Tax Act:
The court examined the definition of "goods" under both the Punjab General Sales Tax Act and the Central Sales Tax Act, which are identical: "goods" means all kinds of movable property other than newspapers, actionable claims, stocks, shares, or securities. The court also referred to the definitions of "movable property" and "immovable property" in the Central General Clauses Act and the Punjab General Clauses Act. The court emphasized that the scope of "movable property" is very wide and includes anything that is not immovable property.

3. Whether Electric Energy Qualifies as "Goods" Under the Relevant Acts:
The court analyzed whether electric energy could be considered "goods" within the meaning of the relevant Acts. It noted that electric energy, being storable, transportable, and measurable, has the attributes of movable property. The court rejected the contention that electric energy is not tangible and, therefore, not property. It stated that "property" includes both tangible and intangible items and that electric energy, like gas or water, is capable of sale and subject to theft under section 39 of the Indian Electricity Act.

The court cited several precedents to support its conclusion:
- In *Erie County Natural Gas and Fuel Company Limited v. Samuel S. Carroll and Another*, gas was treated as property.
- In *Kumbakonam Electric Supply Corporation Ltd. v. Joint Commercial Tax Officer*, electricity was held to be "goods" under the Madras General Sales Tax Act and the Central Sales Tax Act.
- In *Nainital Hotel Co. Ltd. v. Municipal Board, Nainital*, electric energy was considered "goods" for the purposes of the Limitation Act.
- In *M/s. Nizam Sugar Factory Ltd. v. The Commissioner of Sales Tax*, steam was held to be "goods" under the Hyderabad General Sales Tax Act.

The court also referred to an order by the Excise and Taxation Commissioner, Punjab, in the case of M/s. Kumar Textile Mills, Amritsar, which had held that electricity was not "goods." The court found this reasoning unconvincing and noted that the Punjab General Sales Tax Act itself listed electric energy as tax-free "goods" under Schedule B, item 31.

Conclusion:
The court concluded that electric energy falls within the definition of "goods" under both the Punjab and Central Acts. The orders rejecting the petitioner's application for registration were deemed erroneous. The court allowed the petition, quashed the impugned orders, and directed the Excise and Taxation Officer, Sangrur, to dispose of the petitioner's application for registration as a dealer in accordance with the court's observations. No order as to costs was made.

Petition allowed.