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2019 (5) TMI 363 - HC - VAT and Sales TaxInterpretation of statute - scope of the term 'Undertakings' - Licensee - whether the authorities have been justified in holding that the DISCOMs., viz BSES, BSES (Y), NDPL and Transco to whom the assessees had made sales were not “undertakings” supplying electricity? HELD THAT:- The Delhi Vidyut Board (DVB) was deemed to be a licensee under the 1910 Act. This is because the Delhi Electricity Control Order (“DECO”) of 1959 was framed under provision of section 22 B of 1910 Act read with notification of Central Government dated 10.11.1959 to regulate transmission, distribution and utilisation of electricity and for maintaining the supply and securing equitable distribution of energy by all concerned in the Union Territory of Delhi. When functions to deal with electricity were delegated to Municipal Corporation of Delhi (MCD) under the Delhi Municipal Corporation Act 1957 as licensee, the Delhi Electricity Supply Undertaking (DESU) was functioning as undertaking of MCD and no Board was in existence. In the DERC Rules, “Board” was defined to mean DVB constituted under Section 5 of the Supply Act; Rule 2(f) defined DISCOMs to mean as companies with the principal object of engaging in the business of distribution and supply of electricity in the area as specified in Part II of Schedule H. “Transferee” was been defined in Rule 2(r) to mean “GENCO”, “TRANSCO”, “DISCOMS” and “PPCL”, in whom the undertaking or undertakings or the assets, liabilities, proceedings and personnel of the DVB stood transferred. The said DISCOMs (M/s NDPL, M/s BSES Rajdhani Power Limited, BSES Yamuna Power Ltd etc) distributed electricity in Delhi during the relevant period and Delhi Transco Ltd. transmitted electricity in Delhi during the relevant period. Therefore, they were licensees – or at least deemed to be licensees under the 1910 Act. A conjoint reading of the provisions shows that the Supply Act did not repeal the 1910 Act; instead it stipulated that the provisions of the Supply Act were in addition to and not in derogation of the 1910 Act. Therefore, the deeming provisions of the 1910Act continued to be in force during even under the provisions of the2000 Act which remained in force. It is also a fact that the Electricity Act 2003 replaced the Indian Electricity Act, 1910, after 10th June, 2003; the DISCOMs were licensees under Electricity Act, 1910 and these licenses were never withdrawn even after coming into force of the said 2003 Act - From the reading of Rule 11(XII) it can be seen that a dealer is entitled to deduct the turnover of sales made by him to any undertaking supplying electrical energy to the public in Delhi under a license or sanction granted or deemed to have been granted under the Supply Act. Unlike an exemption granted through a notification, the effect of the rule is to exclude a species of transaction from calculation of taxable turnover. Appeal dismissed - decided against Revenue.
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