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2021 (6) TMI 263 - HC - Indian LawsLevy of duty on inter-State sale of electricity - competence of the State legislature - vires of Section 4(4)(d) of the Tripura Electricity Duty Act, 2019 - HELD THAT:- The contention of the State is that upon amendment of Entry 54 of List II the same is no longer subject to Entry 92A of List I and as a result Entry 53 of List II “now stands as an independent fountain source of State legislative power and even if read conjointly with Entry 54, as of date the same is not subservient to Entry 92-A of List I as was the position pre 101st Constitutional amendment”. This argument proceeds on a wrong legal principle that entries in the lists to the Seventh Schedule are source of legislative power which theory as noted earlier has been rejected by the Supreme Court in number of decisions. Again there is an inherent fallacy. Term “goods” has been defined in the Constitution under clause (12) of Article 366 as to include all materials, commodities and articles. Electricity continues to be treated as goods for the purpose of this clause also. Further, sub-section (24) of Section 2 of IGST Act provides that words and expressions used and not defined in the said Act but defined in the CGST Act shall have the same meaning as assigned to them in the said Act. In turn, CGST Act defines term “goods” in sub-section (52) of Section 2 as to mean every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. Thus, IGST Act which aims to levy tax on supply of goods which is in course of inter-State trade or commerce would bring within its sweep supply of electricity also - there is already a Central legislation for levy of duty on inter-State supply of electricity. The State legislature providing for levy of duty on inter-State sale of electricity would thus encroach an occupied field. Any such legislation would also shatter the territorial limitations on State legislature. The GST related amendments in the Constitution would not have rendered the ratio of the decision of the Supreme Court in case of National Thermal Power Corporation Ltd. [2002 (4) TMI 694 - SUPREME COURT] inapplicable in relation to the assertion of the State legislature of its power to frame a law for levying tax on inter-State sale of electricity. Final relief that can be granted to the petitioner must be subject to the well established principle of unjust enrichment. In large number of decisions, the Supreme Court has laid down that whenever a question of refund of tax or duty arises, the petitioner before the Court can claim such refund only to the extent it has borne the element of duty or tax, as the case may be. If the petitioner has already passed on the burden of tax to other person or ultimate consumer, refunding the duty even on a declaration of the taxing statute being unconstitutional, will amount to unjust enrichment. The petitioner, therefore, can claim refund of duty already collected only to the extent it can establish that the duty element was owned by the petitioner without passing it on to the purchaser or the end consumer. In the petition itself the petitioner has averred that some of the duties the petitioner has borne whereas the rest of the duty element has been passed on. The petition is disposed of with directions and declarations that Section 4(4)(d) of the E.D. Act, 2019 is unconstitutional and ultra vires, being beyond the competence of the State legislature - No duty on the petitioner’s inter-State sale of electricity shall henceforth be levied and collected.
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