TMI Blog2012 (4) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision in above matters will have material bearing on their petitions and/or some of the petitions may also stand covered by the judgment which is going to be rendered in the writ petition No. 2890 of 2011, 6163 of 2006, 667 of 2007 and 598 of 2007 in spite of having some more points raised in these petitions. We take the facts of the case of W.P.(T) No. 6163 of 2006( M/s Atibir Hi-Tech Pvt. Ltd) because of the reason that the said writ petition was allowed by the Division Bench of this Court by the judgment dated 11.1.2007. But, the Hon'ble Supreme Court in Civil Appeal No. 3450 of 2008 in the case of this writ petitioner-Atibir Hi-Tech Pvt. Ltd. sent back the matter to this Court for deciding in accordance with the directions issued by the Hon'ble Supreme Court in its order dated 30.4.2008. 2. In W.P.(T) No. 6163 of 2006 M/s Atibir Hi-Tech Pvt. Ltd., challenged the order dated 3.3.2006 issued by the Deputy Commissioner of Commercial Taxes, Giridih Circle, Giridih, whereby the petitioner's application Dated 26.2.2006 for cancellation of registration certificate issued under Rule 4 of the Bihar Electricity Duty Rules, 1949, and for refund of the amount paid by way o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said judgment of Bihar Alloy Steel Co. Ltd. Vrs State of Bihar Anr. has already been reversed by the Hon'ble Supreme Court in Civil Appeal No. 1491 of 1996, the State of Jharkhand Ors Versus Bihar Alloy Steel Anr. vide order dated 18th November, 2003 and the matter was remanded to this Court and after remand of the writ petition of the Bihar Alloys Steel Co. Limited Anr, the said writ petition has already been dismissed by the High Court for non-prosecution. Therefore, the judgment of Bihar Alloy Steel Co. Limited considered in the judgment of this Court in W.P.(T) No. 6163 of 2006 does not exist. 4. Be that as it may, the Division Bench of this Court after considering all above judgments, allowed the writ petition of M/s Atibir Hi-tech Pvt. Ltd. Ors. vide judgment dated 11.1.2007 and quashed the order dated 3.3.2006 passed by the Deputy Commissioner of Commercial Taxes, Giridih Circle, Giridih and it has been held, that the petitioner-company as held in other cases, even when those companies registered them as assessee under the Bihar Electricity Duty Rules,1949, yet they are neither licensee nor assessee, the petitioner M/S Atibir Hi-tech Pvt. Ltd is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the provisions of Damodar Valley Corporation Act, 1948 insofar as they are not inconsistent with the provisions of the Act, shall continue to apply to that Corporation. 7. The Hon'ble Supreme Court also observed that: With the enactment of the Electricity Act, 2003, the nature of the dispute has undergone a structural change particularly in view of the fact that under the Electricity Act, 2003, the entire scheme brings the concept like Deemed Licensee . In this connection section 185 which deals with repeal and savings is also relevant. Therefore, the Hon'ble Supreme Court remanded the matter to the High Court and directed this Court to address on key issues, for which we may quote from the order of the Hon'ble Supreme Court : However, since an important point of law arises, we are of the view that the point needs to be considered afresh by the High Court keeping in mind the change in law in view of the Electricity Act, 2003. We may reiterate that the respondent-company has fairly given up its claim for refund, and, therefore, what needs to be decided is whether the said company or the Damodar Valley Corporation is the assessee under the 1948 Act pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en in the M/s Atibir Hi-tech Pvt. Ltd. case. 11. In view of the orders passed by the Hon'ble Supreme Court in Civil Appeal No. 3457/2008 the Tata Steel Limited has preferred a fresh writ petition being writ petition No. 2847 of 2008. 12. Before these matters could have been heard and decided, the State Government has enacted Jharkhand Electricity Duty Amendment Act, 2011. As per the Clause III of Section 1 of the Amendment Act of 2011, the State Government has been given power to make various provisions of the Amendment Act, 2011, effective from the date to be notified by the State Government. Then, vide notification dated 28.6.2011, while exercising powers conferred by Clause III of Section 1 of Jharkhand Electricity Duty Amendment Act, 2011, Section 2 and Section 3 of the Amendment Act, 2011, have been made effective retrospectively from 10.6.2003, the date on which the Electricity Act, 2003 came into force. Section 5 of the Amendment Act of 2011 has been made effective retrospectively, with effect from 15.11.2000, the date on which the State of Jharkhand was created. Section 4 and Section 6 of the Amendment Act 2011 have been made retrospectively effective from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e' or 'assessee' under the Bihar Electricity Duty Act 1948 or under the Rules of 1949, and in view of this fact that the petitioners are not covered, either under the Electricity Duty Act, 1948 or Electricity Duty Rule, 1949 and the Bihar Electricity Duty Act, 1948 have no application to the writ petitioners. However, the petitioner M/s Atibir Hi-tech Pvt. Ltd. and other companies under mistaken belief or wrong advice treated themselves to be an 'assessee' under Sub Clause (b) of the Rule 2 of the Rules of 1949, applied for registration under Rule 3 of the Rules of 1949 and they have been granted the Certificate of Registration. The writ petitioners, therefore, started paying the electricity duty but when they found that they are not liable to pay the electricity duty to the State Government nor they were obliged to obtain the registration certificate under the Act of 1948 and the Rules of 1949, they submitted a petition before the competent authority for cancellation of the Certificate which cancellation is permissible under Rule 5 of the Rules of 1949 and otherwise also, if a person or the company, is not covered under the Act and the Rules, he or it could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , transmission and distribution of the electricity by the D.V.C. (except for the energy consumed by the D.V.C. for above purpose), then the DVC falls in the Sub Section (4) of the Section 4, which provides that every person including the department of State Government, who generate energy for its own use and for the use of its employees or partly for use or partly for sale shall pay duty payable under Section 3 on the units of energy consumed by him or his employees or sale by him. Therefore, the liability to pay the duty fall only and only upon the D.V.C. and such duty is not recoverable from petitioners as is recoverable by any licensee from its consumer under Sub Section ( 2) of Section 4. Under Sub Section (1) of Section 4, the initial liability to pay the electricity duty is of licensee and a right has been given by Sub Section (2) of the Section 4 to the licensee to recover the said electricity duty from the consumer, but as stated above, such power has not been given to a person who is assessee but not the licensee under the Act of 1948. Therefore, even if the D.V.C. is liable to pay the electricity duty then also the writ petitioners who are consumers of the D.V.C. will not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the even Jharkhand State Electricity Board whose number is more than 15 lacs clearly indicate that while enacting Act of 2011 no mind was applied and operation of this Act is neither workable nor in public interest but will be detrimental to public interest. It is submitted that the retrospective effect of the above provisions will be against the public policy which will have a grave consequence, both for public as well as for the State. It has been pointed out by the learned counsel for the petitioners by giving example like, the case when the law continued for almost more than half century and the assessees are obtaining a Certificate of Registration and submitting the returns and obtaining the assessment orders, such law has been sought to be changed entirely so as to include every petty consumer of the electricity who may be even petty consumer residing in a hut having electricity connection for even one electric bulb will be assessee in the definition of the assessee and those all 15 lacs consumers will be required to obtain the Certificate of Registration and will be required to furnish the return and will also be subjected to Assessment proceedings and in case of non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .V.C. Act of 1948 provides that the Corporation shall fix the schedule of charges for the supply of electrical energy including rates for bulk supply and distribution and specified the manner of recovery of surcharge provided, that the corporation may contract for contractual work to supply electric energy, impose such direction and condition including the rate, schedule as it may be deemed necessary or desirable to encourage the use of electrical energy. The writ petitioners have neither challenged the agreement or its any term and they took the benefit under the agreement and it is in fact, the statutory agreement in view of the Section 20 of the D.V.C. Act 1948, therefore, the petitioners cannot claim for relief from this Court against the statutory contract as they specifically agreed to pay the electricity duty. Learned counsel for the D.V.C. further submitted that Section 3 is the charging Section and this clearly provides the instance of duty and Sub Section 1 of Section 3 further stipulates not only for levy of the electricity duty but specifically provides that the said duty shall be paid to the State Government . It further specifically provides that the electricity duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 1 of Section 3 i.e., the charging section. A bare perusal of the Schedule clearly reveals that the electricity duty is levied according to the nature of consumption of the electricity and the tariff has been prescribed duly for different uses. The DVC is generating and transmitting the electrical energy to the consumers. Sub-Section 1 of Section 3 very specifically provides that it is required to be charged according to its use then the duty can be only fastened upon the end users. It is true that in Sub Section 1 of section 3 it has been mentioned that the electricity duty shall be leviable on the units of energy consumed or sold. But, it is emphatically submitted that the consumption is the relevant and important factor in the light of the charging provision Section 3 read with Schedule. The Section 4 is not the charging section and therefore, no assent of the President of India is required for the Section 4 to become operational as per the decision of the Hon'ble Supreme Court given in the case of Damodar Valley Corporation Vs. State of Bihar, reported in (1976) 3 SCC 710. In the said Damodar Valley Corporation case, the Hon'ble Supreme Court clearly held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemently submitted that the Tata Steel Company and particularly West Bokaro Colliery itself admitted in its earlier petition that it is providing electricity to its employees and it is selling electricity so it comes in the purview of the Section 4 and liable for the payment of the electricity duty to the State. It is also submitted that the D.V.C.'s consumers -writ petitioners are also the bulk supply energy consumers and therefore, also they are liable to pay the electricity to the State. 26. Learned counsel for the State also submitted that in view of the clear language of Sub Section 1 of Section 3 of the Act of 1948, the electricity duty is payable on sale as well as upon consumption of the electricity. Learned counsel for the State also submitted that even if, the petitioners as such are the consumers of the D.V.C. but are liable to pay the duty under the provisions of the Electricity Act because the consumers are also liable to pay the electricity duty. The learned counsel for the State has also relied upon the judgment of the Hon'ble Supreme Court in the case of Damodar Valley Corporation and empathetically submitted that in view of the said judgment this issue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as obtained sanction under section 28 of the Act to engage in the business of supplying energy and includes the Bihar Electricity Board constituted under Section 5 of the Electricity (supply) Act, 1948 (54 of 1948). It is unambiguously clear from the above definition, that the 'Licensee' under the definition as provided in Sub Clause (d) of Section 2, is any person including a company or a legal authority who is required to take license under Part III of the India Electricity Act 1910 and who supply energy to any person including the company or a legal authority which has obtained sanction under Section 28 of the Act to engage in the business of supplying energy and includes the Bihar Electricity Board constituted under Section 5 of the Electricity Supply Act, 1948. To examine this issue, who is the licensee, before amendment of the Act of 2011, we need to look into the unamended definition of the Licensee. Admittedly the D.V.C. is not a company who was required to take License under the Electricity Act, 1910 nor it obtained sanction under Section 28 of the Act. It has been constituted and created under its own Act i. e., the Damodar Valley Corporation Act, 1948. In D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments advanced by the learned counsel for the D.V.C. who empathetically submitted that by giving any interpretation of Section 4 affecting the effect of Section 3 would be rendering the one statutory provision contrary to the another statutory provision. However, we are in agreement with the submissions of the learned counsel for the D.V.C., so far that Section 3 is the charging Section and Schedule also is a part and parcel of the Sub Section 1 of Section 3 and, it is also validly enacted law but what has been done by Sub Section 1 of Section 3 is only that it has provided that the units of energy consumed or sold shall be having the liability of the electricity duty. It specifically nowhere provided that inspite of the fact that two persons i.e., seller and consumer, have been included in Sub Section 1 of Section 3 for the purpose of charging electricity duty and it has not been provided who shall be liable to pay the electricity duty to State as primarily responsible. The charging Section cannot be read to destroy the meaning of another Section in the Statute itself when that section in the Statute is legal and valid and which appears to be supplementary to first section. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e do not find any force in such argument. The fact situation in that all the petitions, in written statutory contract with D.V.C., agreed to pay the Electricity duty to the D.V.C. In one of the case of M/s Tata Steel, there is an agreement which is old more than 30 years, but that length of period, even if is ignored even then once consumers of D.V.C. agreed to pay the electricity duty to the D.V.C. then, that agreement cannot be said to be illegal or void in any manner because the Act nowhere prohibited the shifting of burden upon the consumer by the supplier of electricity energy. Therefore, the contract to pay electricity duty to D.V.C. is not hit by any law. Furthermore the condition of payment of electricity duty by the D.V.C.'s consumers has not been challenged by anybody at any time and is also not under challenge in these petitions. Learned counsel for the petitioners very rightly submitted that they are not challenging the agreement or its any part, their contention is only that they are not covered under and governed by the Act of 1948 and the Rules of 1949 and therefore, they are not liable to pay the electricity duty. If this argument is considered ignoring the agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectricity purchased from the D.V.C for it's own use as well as for sale also, which is not the fact situation in present case and counsel for the petitioner's contentions is that these matters are only of those units on which the petitioners are consuming the electricity purchased from the D.V.C for their own use. Therefore, the judgment given in the W.P.(T) No. 5325 of 2005 has no application. 33. This controversy is because, a few orders have been issued by the Commercial Taxes Department directing writ petitioners to pay the electricity duty to the State under the impression that in view of order dated 8.3.2011 passed in the Central Coalfields Limited Vs. State of Jharkhand, delivered in W.P.(T) No. 5325 of 2005, the State authorities are required to demand the electricity duty from the writ petitioners. 34. Learned counsel for the State in fact could not show us any provision of law under which the petitioners could have been treated to be the assessee under the Act of 1948 and the Rules of 1949. We considered the definition of the assessee which has not been given in the Act of 1948 and which has been given in the Rules of 1949. As per the Sub Clause (b) of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Therefore, the cases in hand are not covered under Sub-Section (4) of Section 4. Sub Section 4(a) creates liability to pay the electricity duty upon every (such) person other than licensee who (1) obtains bulk supply of energy, whether from licensee or other person (1) for sale or (2) partly for his own use and partly for sale. The petitioner, though are if presumed to purchasing electricity in bulk (bulk energy is not defined) even then they are not selling energy or its any part, therefore, the petitioners are not liable to pay electricity duty under sub section 4(a) of section 4 of the Electricity Duty Act, 1948. As per definition of Assessee given in Clause (a) of Rule 2 of Rules of 1949, assessee means the licensee or any other person who is liable to pay electricity duty under the Act. Therefore, the D.V.C who is liable to pay the electricity due under the Act is Assessee as defined in the Rules of 1949 but the petitioners, though liable to pay the electricity duty but not to the State nor under the Act of 1948 or Rules of 1949, are not the assessee for the purpose of above Act and Rule. 36. It is also submitted that the number of consumers of D.V.C. are very few, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consumer and the seller of the electricity unit, if so, will be held then that will result into holding that the every consumer of the electricity even of the State Electricity Board is directly liable to pay the electricity duty to the State Government applying same principle, that the energy cannot be stored and first it is consumed then the transaction of sale stands complete. Otherwise also, if it is held that all consumers are liable to pay electricity duty to the State Government directly then the consequence will be grave as all consumers who are lakhs in number will have to obtain registration and will be subjected to agreement under the Rules which will make the procedure unworkable for no reason. 39. Now, the Act of 2003 is very relevant and require to be considered because of the reason that the Supreme Court has directed this Court to examine the effect of the Act of 2003. 40. We have already held that under the Bihar Electricity Act, 1948 and the Rules of 1949, in the definition of the licensee the D.V.C. was not included. However, in the Electricity Act of 2003, the D.V.C. has been made licensee by deeming provisions as provided in the fourth proviso to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss a different intention appears, be construed as references to the provision so re-enacted. (2) Where before the Fifteenth day of August, 1947, any Act of Parliament of the United Kingdom repealed and re-enacted, with or without modification, any provision of a former enactment, then reference in any Central Act or in any Regulation or instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted. In view of the Section 8 of the Act 1897, where one reference of the Act 1910 is given in the Act of 1948, it shall be deemed to the reference to the provisions re-enacted. Therefore, in the definition Clause 4(b) in place of Indian Electricity Act 1910 , Electricity Act 2003 is required to be read. Therefore, by 4th proviso to Section 14, the D.V.C is licensee now, under the Act of 2003, consequently, the D.V.C who was recovering the Electricity Duty from it's consumer, after coming into force of 4th proviso to Section 14 of the Act of 2003 can recover the Electricity Duty from it's consumers as licensee. Once in Indian Electricity Act, 2003, the D.V.C. has been made deemed licensee, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctively. Learned counsel for the petitioners relied upon the judgment of the Supreme Court delivered in 2004(8) SCC 1, 1987(64) SCC 42, and 1995 SCC 338. Further contention of learned counsel for the writ petitioners was that the notification has been issued in delegated legislative power and it is not the notification issued by the legislature itself. The provision of any Act cannot be made retrospectively operative by delegation of power. Learned counsel for the petitioners also submitted that if these provisions are made operative from the back date, it will result into penal consequences and in fact will make the entire settled position changed as well as will result into such a chaotic situation which will be even beyond the control of the State Government. 46. We have examined the Act of 2011 as well Act of 1948 and the Rules of 1949. Radical changes have been made in the Act of 1948 by the Amendment Act of 2011. A comparative chart submitted by the counsel for the petitioners is very useful :- Challenge to Jharkhand Electricity Duty(Amendment) Act, 2011 47. During pendency of these writ petitions, after the order of remand passed by the Hon'ble Supreme Court dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is submitted that Section 3 is charging Section and its validity has been upheld by the Hon'ble Supreme Court and, therefore, liability of the seller and consumer of electricity is simultaneous upon both. By amendment, the State has only provided that the State may recover the electricity duty directly from the consumers instead of recovering the electricity duty from the licensee or person who generates energy for his own use or for the use of his employees or partly for such use or partly for sale and realise from those persons who obtains electricity for sale, partly for his own use or partly for sale, bulk supply of energy generated by a licensee or other person. It is submitted that so far as the power of the State Government in enacting the law for the electricity duty is concerned, that is not under challenge. It is submitted that sub-clause(iii) of Section 1 of the Amendment Act of 2011, empowers the State Government to notify the effective dates of the coming into operation of the Sections of the Act of 2011. Therefore, the state government has made these provisions operative retrospectively. 50. It will be worthwhile to mention here that when the matter was pendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... electricity duty by sub-section(1) of Section 3 of the Act of 1948 upon the seller and consumer, Section 4 has been enacted. As per unamended Section 4(1), the licensee was liable to pay the electricity duty to the Government every month, on the units of energy consumed by him or sold by him to the consumer. Therefore, the consumer automatically became liable to pay the electricity duty to the licensee and the licensee who are collecting the electricity duty was required to pay the State Government. Since as per Rule 11, where there is a series of transfers of the same energy, the duty payable shall be levied only at the last point in such series of transfers and, therefore, by Sectional 4(1), power was given to the licensee to recover the electricity duty from the consumer. As per unamended sub-section(4) of Section-4, every person including the department of the State Government, other than a licensee, who generates energy for his own use or for the use of his employees, or partly for such use and partly for sale, were to pay the electricity duty every month to the State Government and as per sub-section (4a) of Section 4, every person other than a licensee who obtains, for sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account and is bound to submit return, as required by Section 5 and in default thereof, there is a penal provision of fine. 55. As we have already noticed that a few of the persons or companies were the assessees under the Act of 1948 and Rules framed therein i.e. Rules of 1949. The above procedure which was in operation since more than half century has been changed. Consequence thereof, is that the position which was made clear and workable by Section 4 of the unamended Act of 1948 had been changed and because of this change every consumer (numbers, in lacs) who were paying the electricity duty for the unit consumed by them through the licensee or any other person, who was liable under the Act of 1948 to pay electricity duty to the Government will now have independent liability to pay the electricity duty to the State Government under the Act of 1948. Because of this amendment, in fact, absolutely arbitrary power has been given to the State Government to raise demand of the electricity duty against either consumer or seller of the electricity. The State failed to justify this change made by the Amendment in sub-section(1) and sub-section(2) of Section 4 of the Act of 1948. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... metered premises, unmetered premises, then every consumer is required to claim deduction in respect of meter premises under sub-section(2) of Section 3 by giving statutory details and disclosing the net units in respect of metered premised chargeable to duty and gross amount of duty payable on net units in respect of metered premises, chargeable to duty etc. etc. 58. The learned counsel for the petitioners vehemently submitted that the State cannot give effect to this amendment as it is wholly unworkable and will create chaotic situation as well as it will be unnecessary burdening to the public for no reason. By this amendment, the State is not achieving anything because without any amendment the State was getting the full electricity duty. There is force in the submission of the learned counsel for the petitioners and State could not answer why chaotic situation will not be, if the amendment referred above are given effect to and every person, having been given a single bulb connection, is required to obtain certificate of registration and obtain the assessment in every two months. How these Officers will handle millions of returns and pass the assessment orders is also une ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given from back date is not known to the State Government and amendment entails penal consequence under Section 8 of the Act of 1948. 61. In totality, the Amendment Act of 2011, so far making it operative retrospectively, is without any aim and object and without any nexus with the object which can be achieved. However, what object is to be achieved from this Amendment Act of 2011 is not explained by the State Government, which has been changed by the respondents and which appears will create only chaotic situation, unworkable and will give absolutely arbitrary power to the State Government and the licensee to demand electricity duty from the petty consumers. Therefore, the amendment made in Section 4 by the Act of 2011 is declared ultravires to the Article 14 of the Constitution of India as by this amendment, the State has vested itself with the arbitrary power to demand electricity duty either from the seller or the consumer and because of the reason that the said amendment are wholly unworkable and further it will create chaotic situation, which cannot be handed even by the State Government of obtaining millions of applications for registration under Rules of 1949 and passin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m DVC for their own use; (V) The petitioners cannot be subjected to assessment and reassessment for the electricity duty. Therefore, any proceeding of assessment order, reassessment or opening of assessment, which is pending, is quashed. The bills or demand raised by the State Government against these petitioners for electricity duty is also quashed. (VI) After coming into force of Electricity Act, 2003, the DVC is deemed licensee and because of the Act of 2003, the petitioners' status has not changed to assessee from non-assessee. (VII) Section-5 of the Jharkhand Electricity Duty(Amendment)Act, 2011 amending Section 4 of the Act of 1948 is declared to be arbitrary as it gives power to the State Government to choose and pick up either of seller or consumer of the electricity for payment of electricity duty and Section 5 of the Act of 2011 amending Section 4 of the Act of 1948 is wholly unworkable and may create chaotic situation, made against the public interest, therefore, declared to be ultravires and illegal. 64. The petitioners are not liable to pay surcharge to the Damodar Valley corporation. Challenge to the rest of the provisions of the Act of 2011 is left ..... X X X X Extracts X X X X X X X X Extracts X X X X
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