Jharkhand High Court
M/S.Nicco Jubilee Park Ltd. vs State Of Jharkhand & Ors on 18 August, 2009
Equivalent citations: 2010 (1) AIR JHAR R 308, AIR 2010 (NOC) (SUPP) 681 (JHAR.) AIR 2010 (NOC) (SUPP) 681 (JHA), AIR 2010 (NOC) (SUPP) 681 (JHA)
Author: Amareshwar Sahay
Bench: Amareshwar Sahay
Writ Petition (Civil) No. 1055 of 2002
In the matter of an application under Article 226 of the Constitution of
India.
M/s Nicco Jubliee Park Ltd. ..................... Petitioner
Versus
1. The State of Jharkhand
2. The Commissioner of Commercial Taxes, Jharkhand
3. The Joint Commissioner of Commercial Taxes (Administration)
Jamshedpur
4. The Deputy Commissioner of Commercial Taxes, Urban Circle,
Jamshedpur
5. The Assistant Commissioner of Commercial Taxes, Urban Circle,
Jamshedpur
6. The Commercial Taxes Orricer, Urban Circle,
Jamshedpur.................................. Respondents
......
For the petitioner : Mr. M.S.Mittal, Advocate
For the Respondents : Mr. A. Allam, Sr. S.C.-II
......
PRESENT
The Hon'ble Mr. Justice Amareshwar Sahay
JUDGMENT
C.A.V. on 13/08/2009 Delivered on 18/08/2009
Amareshwar Sahay, J. The petitioner M/s Nicco Jubilee Park and Resorts
Limited (herein after called as NICCO in short) is said to be a joint
venture company of Tata Iron and Steel Company Limited (herein
after called TISCO in short for the sake of convenience). The petitioner
company has constructed an Amusement Park on a portion of Jubilee
Park allotted by TISCO Limited at Jamshedpur. According to the
petitioner, there was an agreement in between two companies, i.e.
NICCO and TISCO that the lands for setting up of amusement park by
way of lease to the petitioner company and the rides etc. will be
established by NICCO. Accordingly, the petitioner set up various rides
in the amusement park mainly for the children. For the purpose of
running different rides, the electricity required for the said purpose is
being taken by the petitioner from TISCO by entering into an
W.P.C. No. 1055 of 2002
[2]
agreement for supply of electricity from the TISCO, who is a licensee
under Bihar State Electricity Duty Act, 1948.
Further case of the petitioner is that after the said
agreement for purchasing electricity from TISCO it became a
consumer within the meaning of Section 2 (b) of the State Electricity
Duty Act. It is said that the petitioner installed a Diesel Generator Set
(DG Set) of 160 K.V.A. exclusively for its emergency use only in case of
sudden load shedding or power failure. It is further stated that from
the DG Set the petitioner is generating meager quantity of electricity
and the DG Set is being used very sparingly, since there is hardly
power cuts in the town of Jamshedpur. The petitioner is paying
electricity bill for the unit supplied by TISCO from time to time. It is
also stated that the petitioner filed a petition on 05/09/2001 before
the Deputy Commissioner, Commercial Taxes, Jamshedpur,
requesting to exempt the petitioner from levy of any entertainment tax
on the entry fees/ admission fees of the visitors visiting the
amusement park. Pursuant there to an inspection of the premises of
the petitioner was made by the authority of the Commercial Taxes
Department and, thereafter, the petitioner received a letter dated
07/12/2001, contained in Annexure-6 to the writ petitioner, directing the petitioner to take steps for getting itself registered under Bihar State Electricity Duty Act as well as under the Entertainment Tax Act, on the ground that in course of inspection, it was found that a DG set of 160 KVA has been installed upon which the electricity duty is payable under the Electricity Duty Act.
2. The petitioner filed reply as contained in Annexure-8 to the writ petition stating therein that the DG set was installed in the premises only for rescue purpose and not for generating energy for its own use and the same was being operated only in case of emergency W.P.C. No. 1055 of 2002 [3] when the supply of electricity suddenly fails and the visitors are stuck up in their rides. It was also stated that since the petitioner was not a licensee within the meaning of the Act and, hence, not liable to pay electricity duty under the Electricity Duty Act.
3. The grievance of the petitioner is that the respondents are insisting the petitioner to get it registered under the provisions of Bihar State Electricity Duty Act, 1948, failing which coercive steps would be taken against the petitioner.
4. In view of the facts stated above, the petitioner has filed this writ petition for declaration that the petitioner is not liable to pay electricity duty under the provisions of Bihar State Electricity Duty Act in view of the fact that the petitioner company purchases electricity from TISCO for its own use and the DG set, which has been installed in its premises is being used only as a stand by for rescue purpose in emergency situation when the supply of electricity suddenly fails and the visitors are stuck in any of the rides.
5. It is submitted on behalf of the petitioner that the Electricity Duty Act has been enacted for levy of electricity duty on the sale and consumption of electrical energy. The consumer have been defined to mean any person, who is supplied energy by a licensee or sanction holder and the licensee has been defined to mean a person who has been granted license under Part-II of the Indian Electricity Act, 1910. Section 3 of the Act lays down that the duty would be levied and paid to the State Government on the units of the energy consumed and sold at the rate or rates specified in schedule appended to the Act.
6. Section 4 of the Electricity Act fixes liability upon different persons to make payment of duty to the State Government. Whereas Section 4 (1) of the Act lays down that every month the licensee is W.P.C. No. 1055 of 2002 [4] required to be paid duty payable under Section 3 of the Act and Section 4 (2) lays down that every licensee may recover from the consumer, the amount which falls to be paid by the licensee as duty in respect to the energy sold to the consumer.
8. It is also submitted that Sub-Section 4 of Section 4 of the Act prescribes that every person other than the licensee, who generates energy for his use or for the use of his employees or partly for such use is liable to pay the duty under Section 3 on the units of energy consumed or sold.
Section 4 (a) stipulates that every persons other than licensee who obtains for sale or partly for his own use or partly for sale, bulk supply of energy, generated by a licensee or other persons shall pay duty payable under Section 3 of the Act every month to the State Government.
9. It is submitted that the supply of energy to the petitioner by TISCO being a licensee and sanction holder and it is TISCO, who is liable to pay electricity duty to the State Government, which is already being paid by TISCO. It is also submitted that from May 2001 till the date of filing of the writ petition, only 46 units of electricity was generated, which clearly goes to show that the DG set was being used only sparingly and in case of emergency when the power supply suddenly fails.
10. Mr. Mittal, learned counsel appearing for the petitioner has relied on a decision of the Division Bench of Ranchi Bench of Patna High Court in the case of "M/s Bihar Alloy Steels Ltd. & Another- versus- State of Bihar & Others, reported in 1996 (1) P.L.J.R.
824."
11. On the other hand, the stand of the State as it appears from the averments made in the counter affidavit, filed by them are W.P.C. No. 1055 of 2002 [5] that the petitioner has installed the DG set for the purpose of generating electrical energy and to supply the said energy to its amusement park and, as such, under Section 4 of the Electricity Duty Act the petitioner is liable to pay the duty to the State Government. It is further submitted that Section 4 (4) of the Act clearly provides that every person including any department of the State Government other than licensee, who generates energy for his own use or for the use of his employees or partly for such use or partly for sale shall pay duty every month on the units of energy consumed by him or his employees or sold by him unless not specifically exempted by the competent authority.
It is further submitted that the petitioner is liable to pay electricity duty under the Bihar State Electricity Duty Act, 1948, which has been duly adopted by the Government of Jharkhand as the energy being consumed for commercial purposes and, therefore, notice under Rule 3 of the Bihar Electricity Duty Rules, 1949 was issued to the petitioner. Lastly, it is submitted that under Section 4 (4) of the Act, every person including any department of the State Government other than licensee, who generates energy for his own use or for the use of his employees or partly for such use or partly for sale has to pay the electricity duty unless the same is exempted by the competent authority.
12. In order to appreciate the claim and counter claim of the parties, it is necessary to notice the relevant provisions of the Bihar/ Jharkhand State Electricity Duty Act, 1948. Section 2 (b) defines consumer, which reads as under;
"2(b) 'Consumer' means any person who is supplied with energy by a licensee, but does not include either a licensee or the 'distributing licensee' as described in clause 1 (a) of clause IX of the Schedule to the Indian W.P.C. No. 1055 of 2002 [6] Electricity Act, 1910 (9 of 1910), or a person who obtained sanction under section 28 of the said Act."
Section 2 (c) defines energy, which reads as under;
"2(c) 'Energy' means electrical energy when generated, transmitted, supplied or used for any purpose except the transmission of a message."
Section 2 (d) defines licensee, which reads as under;
"2(d) 'Licensee' means any person, including a company or a local authority licensed under Part II of the Indian Electricity Act, 1910 (IX of 1910) to supply energy, or any persons including a company or a local authority who 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 (54 of 1948)."
13. Section 3 of the aforesaid Act lays down the incidence of duty and Section 4 speaks about payment of duty, which are quoted herein below;-
"3. Incidence of duty-(1) Subject to the provisions of sub- section (2), there shall be levied and paid to the State Government, either on the units or on the value of energy consumed or sold, excluding losses of energy in transmission and transformation, a duty at the rate or rates to be specified by the State Government in a notification.
Provided that, the State Government may, by notification, specify different rates of duty in respect of different categories of consumption or sale of energy.
Provided further that the rate of duty shall not exceed twenty paise per unit in case the duty is levied on the basis of units consumed or sold any ten percentum of the value of the energy consumed or sold in case the duty is levied on the basis of the value of energy.
(2) No duty shall be leviable on units of energy;
(a) consumed by the Government of India, or sold to the Government of India, for consumption by that Government;W.P.C. No. 1055 of 2002 [7]
(b) consumed in the construction, maintenance, or operation of any railway company operating that railway, or sold to that Government or any such railway company for consumption in the construction, maintenance or operation of any railway;
(c) consumed by the licensee in the construction, maintenance and operation of his electrical undertakings;
(d) consumed by or sold by any class of persons exempted from payment of duty under Section 9;
(e) consumed by the Damodar Valley Corporation for the generation, transmission or distribution of electricity by that Corporation;
(f) consumed for any purpose which the State Government may, by notification, in this behalf declare to be a public purpose and such exemptions may be subject to such conditions and exemptions if any, as may be mentioned in the said notification. (3) When a licensee holds more than one license, duty shall be payable separately in respect of each license.
4. Payment of duty- (1) Every licensee shall pay every month to the State Government at the time and in the manner prescribed the proper duty payable under Section 3 on the units of energy consumed by him or sold by him to the consumer. (2) Every licensee may recover from the consumer the amount which falls to be paid by the licensee as duty in respect of the energy sold to the consumer.
(3) the licensee may, for the purpose of sub-section 2, exercise the power conferred on a licensee by sub-section (1) of Section 24 of the Indian Electricity Act 1910 (9 of 1910) for the recovery of any charge or sum due in respect of energy supplied by him. (4) Every person including any department of the State Government other than licensee, who generates energy for his own use or for the use of his employees or partly for such use or partly for sale, shall pay every month at the time and in the manner prescribed the proper duty payable under section 3, on the units of energy consumed by him or his employees or sold by him.
(4a) Every persons other than licensee who obtains, for sale or partly for his own use or partly for sale, bulk supply of energy, W.P.C. No. 1055 of 2002 [8] generated by a licensee or other persons shall pay every month to the State Government at the time and in the manner prescribed, the duty payable under Section 3 on the units of energy so obtained and sold or partly sold and partly consumed by him.
(5) The licensee or other person who is liable to pay duty under this Act shall, subject to the prescribed conditions, be entitled to a rebate of such percentage as may be prescribed on the amount of duty paid by him within the prescribed time."
14. In the present case, we are posed with a question as to whether the petitioner, who is said to have installed DG set in its amusement park, which, according to it, has been installed for rescue purpose in case of emergency when the supply of electricity suddenly fails and not generating energy for its own use, is liable to pay electricity duty as envisaged under Section 4 of the State Electricity Duty Act, 1948.
15. Under Section 4 (1) every licensee is required to pay duty payable under Section 3 to the State Government. Sub-section (2) lays down that every licensee may recover from the consumer, the amount which falls to be paid by the licensee as duty. Sub- section (3) prescribes the mode of recovery of duty by the licensee from the consumer whereas under Section 4 (4) of the Act every person other than licensee, who generates energy for his own use or for the use of his employees or partly for such use or partly for sale, is liable to pay duty under section 3 of the Act, on the units of energy consumed by him or his employees or sold by him.
Under Section (4a) Every person other than licensee who obtains, for sale or partly for his own use or partly for sale, bulk supply of energy, generated by a licensee or other persons shall pay every month to the State Government at the time and in the manner W.P.C. No. 1055 of 2002 [9] prescribed, the duty payable under Section 3 on the units of energy so obtained and sold or partly sold and partly consumed by him.
16. According to the petitioner, the energy generated from the DG set at the premises of the petitioner is neither being used for the purpose of own use nor for the use of its employee nor it is being sold and, therefore, no duty is leviable.
17. Admittedly, even according to the petitioner, the energy generated from the DG set by the petitioner is being used during the period when the supply of electricity suddenly fails. The use of electrical energy generated out of the DG set even during the period of failure of supply of electrical energy by the licensee would certainly mean that the energy so generated was/is being used for own use may be for a short duration or if required even for a longer period. It may be that the petitioner is not selling said energy, generated by the DG Set to any other person but certainly the energy so generated from the DG set is being used for its own purpose and, therefore, in my view, sub-section 4 of Section 4 at once comes into play and, therefore, the petitioner becomes liable to pay electricity duty to the Government.
18. The decision, i.e. "M/s Bihar Alloy Steels Ltd, cited by the counsel for the petitioner as contained in Annexure-10 to the writ petition is not applicable in the facts and circumstances of the present case since in that case the petitioner company was obtaining bulk supply of energy generated by DVC, which was a licensee and the energy obtained by the petitioner company from the DVC substantial part of its being utilized by the petitioner company for its own use and the rest was being used in making supply to its employees on payment of electrical charge at the rate of 25 paise per unit after giving certain amount of electricity free of charge and, W.P.C. No. 1055 of 2002 [10] therefore, the question in that case was as to whether the petitioner was liable to pay duty under sub-section 4 (a) of Section 4 of the Act, which was inserted by the Finance Act, 1985 dated 07/08/1985 requiring every person other than licensee who obtains, for sale or partly for his own use or partly for sale, bulk supply of energy, generated by a licensee or other persons shall pay every month to the State Government at the time and in the manner prescribed, the duty payable under Section 3 on the units of energy so obtained and sold or partly sold and partly consumed by him. Whereas in the present case, the question as to whether under Section 4 (4) of the Act, the petitioner is liable to pay electricity duty. Therefore, the case of "M/s Bihar Alloy Steels Ltd is of no help to the petitioner.
19. Section 9 of the Electricity Duty Act, 1948 gives power to the State Government to grant exemption, which reads as under;-
"9. Power of State Government to grant exemptions- The State Government shall have power to exempt any person or class of persons notified in this behalf from the duty payable under this Act and such exemptions, may be subject to such conditions and exemptions it any, as may be mentioned in the said notification."
20. As it appears that the State Government from time to time by issue of several orders and circulars have granted exemptions to different persons or class of persons in exercise of power under Section 9 of the Act. Several such notifications/circulars have been appended with the Bihar Electricity Duty Manual published by Malhotra Brothers.
21. Therefore, in view of the fact that when there is a specific provision under the Act empowering the State Government to grant exemption from paying electricity duty in an appropriate case and, as such, the petitioner can very well apply for such exemption to the W.P.C. No. 1055 of 2002 [11] State Government, which can be considered by the State Government on its own merit and an appropriate order may be passed by the State Government in that regard if any such exemption is claimed by the petitioner.
22. In view of the discussions and findings above, I hold that the petitioner company is liable to pay electricity duty as envisaged under Section 4 (4) of the State Electricity Duty Act, 1948, for the generation and consumption of the energy being generated from its DG set installed at the premises of the petitioner, irrespective of the fact as to whether the energy is being generated and consumed is of very small quantity or that it is being used only in case of emergency, i.e. when there is sudden power failure or load shedding. Whatever may be the quantity generated or consumed by the petitioner, the electricity duty is liable to be paid by the petitioner to the State Government, unless it is exempted by the State Government from payment of such electricity duty in exercise of power under Section 9 of the Act.
23. In this view of the matter, the relief as claimed by the petitioner in this writ application cannot be granted. Accordingly, having found no merit, this application is dismissed.
However, in the facts and circumstances of the case, there shall be no order as to cost.
(Amareshwar Sahay, J) Jharkhand High Court, Ranchi The 18th August, 2009 NAFR/ Mukund