Chattisgarh High Court
Bharat Aluminium Company vs State Of Madhya Pradesh And Anr on 29 June, 2022
Author: Arup Kumar Goswami
Bench: Arup Kumar Goswami
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AFR
HIGH COURT OF CHHATTISGARH, BILASPUR
WA No. 452 of 2013
1. State of Madhya Pradesh, Through Secretary, Energy, Vallabh
Bhawan, Bhopal (MP)
(Now State of Chhattisgarh, through the Secretary, Department of
Energy, Mahanadi Bhawan, P.S. Mandir Hasaud, Raipur, District
Raipur, (C.G.)
2. The Tahsildar, Korba, District Korba (C.G.)
---- Appellant
Versus
Bharat Aluminum Company Through Director S/o Through Director, Korba,
P.O. And P.S. Balco Nagar, District Korba (C.G.)
---- Respondent
For Appellants : Mr. Vikram Sharma, Deputy Government
Advocate.
For Respondent : Mr. Brian Da'Silva, Mr. Abhishek Sinha,
senior counsel with Mr. Sarabjeet Singh.
WA No. 1157 of 2012
Bharat Aluminium Company, through Director, Korba, P.O. And P.S. Balco
Nagar, Distt. Korba (C.G.)
---- Appellant
Versus
1. State of Madhya Pradesh, Through Secretary, Energy, Vallabh
Bhavan, Bhopal M.P.
Now through its successor, State of Chhattisgarh, through Secretary,
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Energy, DKS Bhawan, Mantralaya, Raipur, P.S. Civil Lines (C.G.)
2. Tehsildar, Korba, P.S. Civil Line Korba Distt. Korba (C.G.)
---- Respondents
(Cause Title taken from Case Information System)
For Appellant : Mr. Brian Da'Silva, Mr. Abhishek Sinha,
senior counsel with Mr. Sarabjeet Singh, Advocate.
For Respondents : Mr. Vikram Sharma, Deputy Government Advocate
Date of Hearing : 12.04.2022
Date of Judgment : 29.06.2022
Hon'ble Mr. Arup Kumar Goswami, Chief Justice
Hon'ble Mr. Gautam Chourdiya Judge
C A V Judgment
Per Arup Kumar Goswami, Chief Justice
The judgment/order dated 18.10.2012 passed by the learned Single
Judge in Writ Petition No.1232 of 1992 has given rise to two appeals : one
at the instance of the writ petitioner, namely, Bharat Aluminum Company
Limited (BALCO), registered as Writ Appeal No.1157 of 2012 and the other
at the instance of the State of Madhya Pradesh and Tehsildar, Korba,
registered as Writ Appeal No.452 of 2013.
2. Before adverting to the facts as may be considered necessary for
the purpose of disposal of the appeals, we think it appropriate to briefly
indicate the grievance expressed in the two appeals.
3. The learned Single Judge accepted the challenge mounted by the
petitioner that it is not liable to pay electricity duty @ 4 paise per unit from
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01.06.1988 to 30.11.1988 and agreed with the petitioner that it shall be
liable to pay @ 3 paise per unit for the said period. It is against that finding
and conclusion of the learned Single Judge that Writ Appeal No.452 of
2013 is filed.
4. The learned Single Judge negated the challenge made by the
petitioner that it is not liable to pay electricity duty @ 6 paise per unit from
01.12.1988 to 31.08.1990 and it was held that the petitioner would be liable
to pay electricity duty @ 6 paise per unit for the aforesaid period. Against
this finding and conclusion of the learned Single Judge, the petitioner
preferred Writ Appeal No.1157 of 2012.
5. For the sake of convenience, the appellant in Writ Appeal No.1157
of 2012 will be referred to as the petitioner and the appellants in Writ
Appeal No.452 of 2013 will be referred to as the respondents.
6. The writ petition came to be amended. Prior to amendment, prayers
of the petitioner were as follows :
"a) Issue an appropriate writ, direction or order striking down
section 5 of the M.P. Electricity Duty Act, 1949 (Act No. X of
1949). [This prayer was deleted in terms of order dated
30.06.2005]
b) issue an appropriate writ, direction or order quashing the
notice Annexure -D issued by the Tehsildar, Korba under
section 146 of the MPLR Code.
c) Issue a writ of prohibition or any other writ direction, or order
prohibiting the State Government or its any other authority from
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recovering any amount on account of electricity duty as arrear
of land revenue in any manner and
d) Issue any other appropriate writ, direction or order in the
facts and circumstances of the case."
7. Subsequently, on amendment being allowed on 27.08.1992, the
following prayers were added :
"C(i) to Issue an appropriate writ/ direction/ order
prohibiting the respondent State from charging electricity
duty at the rate of 4 paise from 01.06.1988 and 6 paise per
unit from 01.12.1988 to September, 1990 from the petitioner.
C(ii) to issue a writ of mandamus to the respondent
State to charge electricity duty from the petitioner only in
accordance with the conditions laid down in the State
Government's letter 14.06.1970 (Annexure-I) read with their
assurance of 13.09.1969 (Annexure-B) and refund all the
excess amount of duty charged from the petitioner.
C(iii) to issue a writ of mandamus to the respondent
State that in any case to make available concessional rate of
electricity duty to the electrical energy generated at its
captive power plant from 01.04.1988 onwards, and
consumed by its aluminium complex at Korba, as provided in
the notification dated 13.03.1981 (Annexure-R).
C(iv) to strike down the notification dated 22.07.1975
(Annexure-Y) permitting to charge interest on a higher rates."
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8. A perusal of the order of the learned Single Judge would go to show
that although a number of prayers had been made in the writ petition, at
the time of hearing as also in the written note submitted, contentions were
advanced only with regard to the validity of the demand notice for recovery
of the electricity duty @ 4 paise per unit from 01.06.1988 to 30.11.1988
and @ 6 paise per unit from 01.12.1988 to 31.08.1990. It further goes to
show that in order to sustain its contention, the petitioner had placed
reliance on a letter dated 28.03.1987, Annexure-C to the writ petition,
which is a letter issued by the Secretary to Government of Madhya
Pradesh, Energy Department to the Secretary, Madhya Pradesh Electricity
Board on the subject of levy of electricity duty and energy development
cess on the electricity supplied to the petitioner for their plant at Korba, and
a letter dated 20.09.1990 (Annexure - N to the writ petition), issued by one
S. Krishnan, Director, Ministry of Steel and Mines to Mr. V.K. Shunglu, the
Principal Secretary to Government of Madhya Pradesh, Finance
Department and to Mr. N.B. Lohani, Secretary to Government of Madhya
Pradesh, Department of Power, on the subject of discussions held in the
chamber of the Principal Secretary, Finance Department, Government of
Madhya Pradesh on matters pertaining to supply of power to the petitioner
(BALCO), by which a note prepared by the petitioner for reduction of State
electricity duty was also forwarded.
9. The petitioner is a Government of India undertaking. The case of
the petitioner as set out in the writ petition, as was originally filed, briefly, is
that on the suggestion of the State of Madhya Pradesh to start an
Aluminium Industry in the backward Tehsil of Korba, Government of India
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decided to establish the same at Korba and accordingly, the Government of
Madhya Pradesh issued an order dated 14.06.1970 in exercise of powers
conferred by Section 78A (1) of the Electricity (Supply) Act, 1948 (for short
"the Supply Act"), directing the Madhya Pradesh Electricity Board that an
agreement should be entered into with the petitioner for supply of 265 MW
of power to the integrated Alumina/Aluminium Plant at Korba on the terms
and conditions as indicated therein in respect of supply of electricity,
exemption of levy of electricity duty or any other kind of charge for the
period of agreement, which will be for a period of 30 years. The petitioner
had applied for establishing a captive power plant in the year 1982 and
generation of power had commenced from 01.04.1988. Though the
petitioner was not bound to pay any electricity duty, after several rounds of
discussions, the Government of Madhya Pradesh issued a letter dated
28.03.1987 providing that electricity duty shall be paid by the petitioner @ 3
paise per unit with effect from 01.07.1985 onwards, until further revision.
Subsequently, the petitioner agreed to pay electricity duty @ 6 paise per
unit from September, 1990 and according to the petitioner, no arrears of
electricity duty is payable by the petitioner. However, respondent No.2 i.e.
Tehsildar, Korba issued a notice dated nil (Annexure - D to the writ
petition) under Section 146 of the Madhya Pradesh Land Revenue Code,
1959 (for short "Revenue Code"), which was received on 20.02.1992,
whereby an amount of Rs.10,30,84,658.48 was directed to paid on or
before 24.02.1992, failing which it was indicated that the said amount
would be realized through coercive process. As no other details were given
in the said notice, a provisional reply was filed by the petitioner on
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14.03.1992. On 28.03.1992, on the strength of an attachment warrant,
seven vehicles of the petitioner were attached and taken into custody by
the Police Station House Officer, Korba.
10. Subsequently, the petitioner filed an application for amendment
being I.A. No.4512 of 1992 and the same was allowed by an order dated
27.08.1992. It is pleaded, amongst others, that neither the Madhya
Pradesh Electricity Board nor the State of Madhya Pradesh raised any bills
for electricity duty on the petitioner till 1986 and for the first time, in the
month of February, 1986, a bill for Rs.17.31 Crores was raised, which,
however, was not paid at that stage. The matter was taken up in a meeting
with the Chief Secretary, Government of Madhya Pradesh, Secretary,
Government of India, Department of Mines and other officers on
08.03.1986 and it was decided by way of a settlement that (a) no duty
should be charged from the petitioner from October, 1975 up to June 1980;
(b) the balance of Rs.12.24 crores will be paid by the petitioner in four
equal annual installments commencing from 1986-87 and that on the
aforesaid amount there will be no surcharge; (c) in the next revision of duty,
the Government of Madhya Pradesh would sympathetically consider
reducing the duty chargeable on the power intensive units of the petitioner.
The petitioner implemented the aforesaid decisions at (a) and (b) as the
Central Government agreed to give a non-plan loan to enable the petitioner
to pay the amount of arrears referred to in (b).
11. It is the further case of the petitioner that the State Government
increased the rate of electricity duty to 4 paise per unit from 01.06.1988
and 6 paise per unit from 01.12.1988. A meeting was held on 30.06.1990
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in the chamber of Principal Secretary, Finance Department, Government of
Madhya Pradesh with the Secretary, Government of India, Department of
Mines and others to consider the question of reduction of electricity duty as
applicable to power intensive unit of the petitioner. Pursuant to the said
meeting, a note was presented by the petitioner, which was discussed in
the chamber of Secretary (Mines), Government of India with Principal
Secretary, Finance Department, Government of Madhya Pradesh on
10.09.1990 and in the said meeting, a consensus was arrived at that the
petitioner would pay electricity duty at the existing rates in future. The word
'consensus' was added by the Department of Mines, Government of India
at the end of the petitioner's note and the note was forwarded to the
Principal Secretary, Finance Department, Government of Madhya Pradesh.
Modification was suggested by the Government of Madhya Pradesh in the
note submitted by the petitioner indicating that the Government of Madhya
Pradesh is likely to increase tariff rather than the duty. The State
Government had issued a notification dated 13.03.1981 in exercise of
powers conferred by Section 3-B of the Madhya Pradesh Electricity Duty
Act, 1949 (for short "Act of 1949"), exempting with effect from 10.12.1980
all producers who ran industries from payment of duty, during the period as
specified in column (1) of the Schedule appended thereto and to the extent
as specified in the corresponding entries in column (2) thereof, in respect
of the electrical energy consumed by such producers for the purpose of the
industries run by them. It is stated that in exercise of powers conferred
under Rule 5 (2) of the Madhya Pradesh Electricity Duty Rules, 1949, for
short, the Rules of 1949, the State Government had determined the rates
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payable by way of interest under Rule 5(i) to be effective from 01.08.1975.
It is pleaded that imposition of interest at various rates including the
interest @ 24% per annum on payment after 12 months is unreasonable,
unjust and unfair.
12. In the return filed by the respondents, it is stated that the dispute
relates to payment of electricity duty consumed in smelters for the
purposes of smelting aluminium ore and it has nothing to do with payment
of duty for electricity consumed for other purposes. The petitioner had paid
the electricity duty at the rate fixed on electricity consumed for other
purposes except for smelters and at the request of the petitioner the
electricity duty for consumption of electricity in smelters was charged at a
concessional rate. It is stated that the letter dated 14.06.1970 was not
acted upon by the Madhya Pradesh Electricity Board and no agreement
was ever entered into between the parties and the aforesaid position was
made clear in a meeting held on 18.02.1985. It is stated that the petitioner
had paid the electricity duty to the State Government on consumption of
electricity in smelters for the period July, 1975 to September, 1975 at the
rate of 1.5 paise per unit amounting to Rs.20,56,216.86. However, the
petitioner did not pay the electricity duty on consumption of electricity in
smelters for the period October, 1975 onwards and for recovering the
electricity duty on such consumption, a bill for Rs.17.31 crores was raised.
The petitioner disputed the said amount and accordingly a meeting was
held on 08.03.1986 and on the basis of the said meeting, the petitioner
paid an amount of Rs.12.24 crores in four installments. The rate of
electricity duty was raised from 3 paise to 4 paise per unit with effect from
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01.07.1985 in terms of the Madhya Pradesh Electricity Duty (Amendment)
Act, 1985, which came into force on 01.08.1985, by which amendment was
effected to Section 3 of Act of 1949. However, the petitioner continued to
pay at the rate of 3 paise per unit. A further meeting was held on
16.10.1986 at Bhopal and a decision was taken that the petitioner would
continue to pay the duty on electricity consumed in smelters at the rate of 3
paise even after 01.07.1985 and the decision was communicated by a
letter dated 28.03.1987. The duty was raised from 4 paise per unit to 5
paise with effect from 01.06.1986 to December, 1987 and again from 5
paise per unit to 8 paise with effect from January, 1988 to May, 1988. The
electricity duty was further raised to 9 paise per unit with effect from
01.06.1988 to 30.11.1988. Before the duty was raised to 9 paise, the
petitioner was permitted to pay duty @ 3 paise per unit, but when the duty
was raised to 9 paise, the petitioner was asked to pay @ 4 paise per unit
with effect from 01.06.1988. A letter dated 24.10.1988 was addressed to
Madhya Pradesh Electricity Board to recover the duty from the petitioner at
the rate of 4 paise per unit with effect from 01.06.1988. When the electricity
duty was further raised with effect from December, 1988 from 9 paise per
unit to 12 paise per unit, the petitioner was asked to pay @ 6 paise per unit
vide letter dated 27.12.1988 with effect from 01.12.1988. A meeting was
also held on 30.06.1990 in connection with payment of electricity duty. It is
stated that the meeting dated 10.09.1990 was not an arranged meeting
and the State of Madhya Pradesh was not represented in such meeting
and Mr. V.K. Shunglu, the then Finance Secretary had no authority to
represent the Government and the Government was not aware of any such
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meeting. It is pleaded that the reliance placed on notification dated
13.03.1981 is misplaced as exemption granted by the said notification was
for a period of only five years. The notification dated 13.03.1981 was
amended by notification 25.06.1987, by which exemption was made
available to those who would establish generating station with installed
capacity not exceeding 1750 KVA and the exemption granted to the
producers exceeding 1750 KVA stood withdrawn. The generators installed
by the petitioner were of capacity exceeding 1750 KVA and therefore, the
petitioner ceased to get any advantage from notification dated 13.03.1981
with effect from 25.06.1987. The difference in duty between 3 paise to 4
paise per unit with effect from 01.06.1988 to 30.11.1988 and 3 paise to 6
paise with effect from 01.12.1988 to August, 1990 amounts to
Rs.7,37,44,097.73. Interest payable under Rule 5 of the Rules of 1949 was
added and the total amount payable comes to Rs.10,30,84,658.48. It is
stated that the petitioner started paying the duty @ 6 paise per unit on the
electricity consumed in smelters with effect from September, 1990
continuously.
13. In the rejoinder affidavit filed by the petitioner, it is highlighted that
the order dated 14.06.1970 is a statutory order and the Government of
Madhya Pradesh had given categorical assurance not to charge any levies
or duties on the electricity supply during the life of the contract. The
exemption was granted to the petitioner in order to persuade the petitioner
to set up smelter plant at Korba, a remote part of the State and that the
petitioner had never requested for a concessional rate of electricity duty,
but was entitled for full exemption of payment of electricity duty. The plea
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taken by the respondents that they were unaware of the meeting dated
10.09.1990 is a distortion of fact. It is stated that the fact that the petitioner
had made payment of electricity duty will not permit the respondents to
claim electricity duty as of right.
14. Mr. Brian D'Silva, learned Senior Counsel appearing for the
petitioner submits that by the letter dated 14.06.1970, levy of electricity
duty or any other kind of charge by way of tax or duty by the State
Government for the Korba Aluminum project was exempted, and therefore,
the respondents cannot resile from the said position. It is submitted by him
that materials on record amply demonstrate that the petitioner had acted
upon the assurances and promises given by the State with regard to
exemption from payment of electricity duty and it had altered its position to
its detriment and therefore, the learned Single Judge was not correct in
holding that doctrine of promissory estoppel does not apply in the facts and
circumstances of the case. He places reliance on Section 3-B (b) of the
Act of 1949 to contend that no notification had been issued by the State
Government cancelling the letter dated 14.06.1970 as envisaged under
Section 3-B (b) of the Act of 1949 and that no order had also been issued
by the Government of Madhya Pradesh modifying or cancelling the order
dated 28.03.1987 in the same manner as it was issued and as such, the
learned Single Judge committed error of law in directing the petitioner to
pay electricity duty @ 6 paise per unit from 01.12.1988 to 31.08.1990. In
absence of any statutory order demanding electricity duty @ 6 paise per
unit from 01.12.1988 to 31.08.1990, direction of the learned Single Judge
to the petitioner to pay electricity duty @ 6 paise per unit for the aforesaid
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period is wholly unjustified. Adverting to Writ Appeal No.452 of 2013, Mr.
D'Silva submits that letter dated 24.10.1988, on which reliance has been
placed by the respondent to question the correctness of the order of the
learned Single Judge so far as the finding recorded that the petitioner is not
liable to pay electricity duty @ 4 paise per unit for the period 01.06.1988 to
30.11.1988, was not even brought to the notice of the learned Single Judge
and therefore, the appeal is mis-conceived. It is submitted by him that the
learned Single Judge was not correct in not placing reliance on the
consensus arrived at in the meeting held on 10.09.1990. He has placed
reliance on the judgments of Hon'ble Supreme Court in I.T.C.
Bhadrachalam Paperboards & Another v. Mandal Revenue Officer,
Andhra Pradesh & Others, reported in (1996) 6 SCC 634, as well as in
Competent Authority v. Barangore Jute Factory & Others , reported in
(2005) 13 SCC 477.
15. Mr. Vikram Sharma, learned Deputy Government Advocate submits
that though the letter dated 24.10.1988 was not brought on record before
the learned Single Judge, averments were made at paragraphs 38 and 39
of the reply filed that the petitioner was asked to pay electricity @ 4 paise
per unit from 01.06.1988 and @ 6 paise per unit with effect from
01.12.1988. It is submitted that though the electricity duty was revised from
time to time, the petitioner was allowed to pay @ 3 paise per unit on
consumption of electricity in smelters. However, when subsequently the
electricity duty was enhanced to 9 paise per unit with effect from
01.06.1988 to 30.11.1988, the electricity duty payable by the petitioner was
revised to 4 paise per unit with effect from 01.06.1988. The electricity duty
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was further revised to 12 paise per unit from December, 1988 and
correspondingly, the petitioner was asked to pay @ 6 paise per unit at a
concessional rate. Placing reliance on the letter dated 24/26.04.1989,
which was brought on record on the basis of the order of this Court dated
16.12.2019, he contends that it is manifest that electricity duty chargeable
in respect of the petitioner was revised from 3 paise to 4 paise per unit
from 01.06.1988 to 30.11.1988 and @ 6 paise per unit with effect from
01.12.1988. He submits that from the rejoinder filed by the petitioner, it is
evident that the petitioner was aware of revision of rate @ 4 paise and @
6 paise per unit and the plea set up that such demand was contrary to the
decision taken during the meeting dated 08.03.1986, enclosed with
Annexure-J letter dated 28.03.1986 is unfounded. It is further submitted
that the petitioner did not deny the assertion with regard to issuance of
letter dated 24.10.1988. It is submitted by him that the letter dated
14.06.1970 was never acted upon as the petitioner did not enter into any
agreement and therefore, no reliance can be placed on the letter dated
14.06.1970. That apart, the petitioner had accepted the letter dated
28.03.1987 based on which the petitioner had started paying electricity
duty @ 3 paise per unit from 01.07.1985. Accordingly, he submits that the
learned Single Judge failed to take note of these aspects of the matter and
therefore, the finding of the learned Single Judge that the petitioner is not
liable to pay electricity duty @ 4 paise per unit from 01.06.1988 to
30.11.1988 is not correct and as such, the same needs interference.
16. We have considered the submissions of learned counsel for the
parties and have perused the materials on record.
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17. At the outset, it will be appropriate to take note of the letter dated
14.06.1970, which was issued in exercise of the powers conferred under
Section 78A (1) of the Supply Act.
18. Section 78A (1) of the Supply Act, provides that in the discharge of
its functions, the Board shall be guided by such directions on questions of
policy as may be given to it by the State Government. Sub-section (2)
provides that if any dispute arises between the Board and the State
Government as to whether a question raised or is not a question of policy, it
shall be referred to the Central Electricity Authority whose decision thereon
shall be final.
19. The aforesaid letter dated 14.06.1970 was issued in connection
with power supply to Korba Aluminium project and direction was issued to
the Board for supply of 265 MW to the integrated Alumina/Aluminium Plant
at Korba. It is further directed that an agreement should be entered into
with the petitioner on the terms and conditions as indicated therein.
Amongst others, it is indicated in clause (d) that the power supply to the
petitioner for the project under the special tariff shall be exempt from the
levy of electricity duty or any other kind of charge by way of tax or duty by
the State Government for the period of the agreement. Clause (e) thereof
provides that there shall be a long-term agreement of 30 years between
the petitioner and the Madhya Pradesh Electricity Board providing for firm
rates as indicated in the letter. The letter visualized that if the commercial
production is commenced before 31.03.1973, the rate of power supply
shall continue to prevail as indicated in Clauses (a) and (b) of the said
letter till 31.03.1976. What would be the rate for the remaining period is
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indicated in Clause (c).
20. There is no averment in the writ petition that the petitioner had
entered into any agreement with the Madhya Pradesh Electricity Board on
the basis of the letter dated 14.06.1970.
21. The minutes of the meeting held on 18.02.1985 between the
Chairman-cum-Managing Director of the petitioner, State Government
officials and the officials of the Madhya Pradesh Electricity Board go to
show that the State Government had taken a stand that at that distance of
time the letter dated 14.06.1970 had become a dead letter and there was
no point in invoking the said letter and that as the letter dated 14.06.1970
had remained inoperative, electricity duty was payable by the petitioner. It
was also mentioned therein that no statutory notification was issued by the
State Government exempting the petitioner from payment of electricity
duty.
22. Section 3-B of the Act of 1949 empowers the State Government to
exempt from payment of duty in whole or in part, amongst others, any
distributor of electrical energy or producer in respect of the electrical
energy sold or supplied to particular industries if the Government is of the
opinion that it is necessary or expedient so to do in public interest by way
of a notification. The direction issued under Section 78A(1) of the Supply
Act cannot be equated with a notification under Section 3-B of the Act of
1949.
23. At this juncture, it will be appropriate to extract relevant portion of
the letter dated 28.03.1987, Annexure-C to the writ petition, which reads as
under :
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"D.O. No.
Government of Madhya Pradesh
Energy Department
Bhopal, dated the 28 March, 1987.
To,
The Secretary,
M.P. Electricity Board.
JABALPUR.
Subject :- Levy of Electricity Duty and Energy Development
Cess on Electricity Supplied to Bharat Aluminium Co, Ltd, for their
plant at KORBA.
The question of fixation of the rate of electricity duty and
levy of energy development cess on the electricity supplied to M/s
Bharat Aluminium Company Ltd. for their plant at Korba has been
under consideration of the State Government for quite some time.
After consideration of the various relevant aspects of the matter
and several rounds of discussions with the representatives of
Government of India and also the Bharat Aluminium Company
(BALCO), the State Government are pleased to decide as
follows:-
(i) No electricity duty shall be payable by BALCO for the
Electricity Supplied to them for their plant at Korba between
October 1975 and June 1980.
(ii) The electricity duty on the consumption of electricity in the
non-power intensive operations / portion of the plant (i.e.
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consumption other than that on the aluminium smelter) shall be
chargeable at the normal rate applicable to such plants from time to
time w.e.f 1.7.1980. Until such time as satisfactory metering
arrangement is made to record this consumption, the electricity
consumption for this purpose shall be taken to be at the rate of 12.1
per cent of the total consumption of electricity in the plant.
(iii) Electricity duty in the power intensive operations / portion of
the plant, shall be charged at the following rates :-
(a) From 1.7.1980 to 30.6.1985 At the rate of
1.5 Paisa per
Unit
(b) with effect from 1.7.1985 At the rate of 3
onwards (until further revision). Paisa per Unit
The increase in the rate of duty to 4 paisa per unit, from 1.7.1986
applicable to other power intensive industries will not apply to
BALCO until further orders in this behalf.
Note:- Consumption of Electricity for this purpose shall be taken to
be at the rate of 87.9 percent of the total consumption of electricity
in this plant, until such time as separate metering arrangements are
made for this purpose.
(iv) The arrears of Energy Development Cess till March 1986 shall
be recoverable in four quarterly instalments during the year 1986-
87. If this amount has not been paid so far, all the four instalments
shall be recovered from BALCO before 31 st March 1987 and the
amount deposited in the Government Treasury by MP Electricity
Board before the end of the Financial Year (1986-87)
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(v) The arrears of Electricity Duty upto March 1986 shall be
recoverable in four equal / Installments, the first instalment being
paid alongwith the bill for January, 1987 in case this amount has not
been paid with this bill so far, it shall be recovered interest by 31 st of
March, 1987 and credited to the Government treasury by M.P.
Electricity Board before the end of the Financial year (1986-87).
(vi) The concessions given to BALCO under the Items (I) and (II)
above are subject to payment of the Arrears of energy development
cess and Electricity duty by BALCO in time, as stipulated above.
By order and in the name of the
Governor of Madhya Pradesh
----
(N. B. Lohani) Secretary to Government, MP Energy Development."
24. A perusal of the above letter would go to show that a decision was taken that no electricity duty shall be payable by the petitioner for the electricity supplied to the plant of the petitioner between October, 1975 and June, 1980 and electricity duty payable in the power intensive operations/ portion of the plant was to be charged @ 1.5 paisa per unit from 01.07.1980 to 30.06.1985 and @ 3 paise per unit from 01.07.1985 onwards (until further revision). It was also indicated that increase in the rate of duty to 4 paise per unit from 01.07.1986, applicable to other power intensive industries, would not apply to the petitioner until further orders in that behalf. It is also provided that arrears of electricity duty up to March, 1986 shall be recoverable in four equal installments, first installment being 20 paid along with the bill for January, 1987.
25. Though the letter dated 14.06.1970 was issued in exercise of powers under Section 78A(1) of the Supply Act, materials on record demonstrate that there were subsequent discussions between the Government, the petitioner and Madhya Pradesh State Electricity Board from time to time and based on such discussions, ultimately, the Government had issued the letter dated 28.03.1987 with regard to, amongst others, payment of electricity duty by the petitioner. Therefore, we are of the considered opinion that the plea of promissory estoppel raised on the basis of the letter dated 14.06.1970 cannot be sustained. In the decision rendered in I.T.C. Bhadrachalam Paperboards (supra), the Hon'ble Supreme Court laid down that rules of promissory estoppel is not available against a statutory provision and that where an act is done in violation of mandatory provision of the statute, such act can not be made a foundation for invoking the doctrine of promissory estoppel. The decision has no application in the facts of the case.
26. A perusal of the minutes of the meeting held on 30.06.1990 in the chamber of the Principal Secretary to the Government of Madhya Pradesh, Finance Department, in which, amongst others, Secretary, Department of Mines, Chairman-cum-Managing Director of the petitioner and the Chairman of the Madhya Pradesh Electricity Board were present, go to show that though a request was made by the Secretary to Government of India for reduction of electricity duty to 3 paise with effect from 01.06.1988, the same was not acceded to by the Principal Secretary to the Government of Madhya Pradesh, Finance Department and he had emphasized that by 21 order dated 28.03.1987, all pending issues of the petitioner with regard to electricity duty had been settled and in that circumstance, it was resolved that the petitioner would forward through Department of Mines, Government of India, a note presenting its case for concessional electricity duty to Madhya Pradesh Government.
27. The petitioner also relied on consensus stated to have been arrived at in a meeting held on 10.09.1990 with regard to payment of electricity duty. The same finds place in a note prepared by the petitioner pursuant to the decision taken in the meeting held on 30.06.1990. It will be appropriate to extract the portion where there is reference to the meeting held on 10.09.1990. The same reads as follows:
"In a meeting held on 10 th September, 1990 in the chamber of Secreatary (Mines) with the Principal Secretary, Finance Department, Government of Madhya Pradesh, CMD, BALCO agreed that in future M/s Bharat Aluminium Company Limited shall pay Electricity duty on the existing rates. (However, these rates would not be revised upwards for some-time to come).
(small bracket portion is to be deleted) To be added :
Principal Secretary, Finance mentioned that during the 8 th plan period, with a view to improving the finances of the Boards, the strategy of the Government of M.P. is likely to be to increase tariff rather than duty.22
(Deletions and additions suggested by M.P. State Government D.O. Letter No.7(48)/88-Met.I dated 09.11.1990 addressed by Deptt. Of Mines, Govt. of India to BALCO refers)."
28. Though the learned Single Judge has reproduced paragraphs 3 to 14 of the affidavit (Annexure R-13) of Mr. V.K. Shunglu in connection with the meeting dated 10.09.1990, it will be helpful to extract paragraphs 6 to 12 of the said affidavit as follows :
"6. That the meeting on 10.09.1990 at Delhi was not a pre- arranged meeting, no notice or agenda had been issued for it and nor had Principal Secretary, Energy Department of the State Government or any other officer been invited to it. It was a meeting informal in nature and character.
7. That the Chairman-cum-Managing Director, BALCO volunteered and agreed on his own in this meeting to pay the electricity duty at the revised rate (6 paise per unit) w.e.f September, 1990 onwards.
8. That there was no discussion wahtsoever on how the arrears of electricity duty for the period prior to September 1990, were to be cleared by BALCO. There was, therefore, no question of my giving any indication, assurance or a commitment regarding Waiver of these arrears.
9. That in view of the deliberations held earlier in the formal meeting at Bhopal on 30th June, 1990 I had no authority from the 23 State Government either to negotiate or settle the payment of arrears.
10. That the note handed over to me by the Chairman-cum-MD of BALCO titled 'Sub-Reduction in rate of Madhya Pradesh State Electricity Duty as applicable to power intensive units of BALCO's Aluminium Complex, in the room of Secretary, Department of Mines, Government of India had 9 paragraphs, with the last one (i.e. paragraph 9) ending with the words '........ for various groups / categories of consumers'. What has been added to this note beyond these words, in the form of 2 sub-paragraphs, is the outcome of this meeting. One of these paragraphs states that Chairman-cum-MD of BALCO agreed to pay in future duty at the enhanced rates and the other sub-paragraph refers to my observation that the strategy of the State Government during the Eighth Plan period was likely to be to increase tariff rather than electricity duty.
11. That I say on Oath that the following portion of Para 9 of the note was not what was discussed or agreed to in the meeting of 10th September, 1990 and that it does not reflect any consensus :-
"9. In view of the initial commitments made by the State Government not to levy any electricity duty on power supply to BALCO, and later to sympathetically consider reducing the duty chargeable on BALCO's power intensive units, from 3 paise/kwh downwards, it is requested that suitable instructions may kindly be issued by the State Government to MPEB that the electricity duty 24 rate chargeable on consumption of power in BALCO's Aluminium Smelter will remain pegged at 3 paise/unit. Issuance of such an order by the State government may not have any repercussions, legal or otherwise, as in actual practice M.P. State Government even on date levies electricity duty at different rates for various groups / categories of consumers.
12. That during the course of the meeting no Minutes were recorded. The letter dated 20th September, 1990 of the Department of Mines, Government of India, with which the note prepared by BALCO has been circulated containing at its end, two sub-paragraphs by way of 'minutes' of the meeting. Neither of these sub-paragraphs throws any light on the matter respecting arrears of electricity duty payable for the period from 01.06.1988 to 31.08.1990."
29. Relying on the affidavit filed by Mr. V.K. Shunglu, who was the then Principal Secretary to Government of Madhya Pradesh, Department of Finance, the learned Single Judge at paragraphs 12 and 13 observed as follows :
"12. Thus the stand of the State Government is to the effect that no formal meeting had ever taken place on 10.09.1990 and Mr. Shunglu was not authorized by the State Government to take any decision which can be termed as decision of the State Government. It appears that the Secretary, Department of Energy under whose department the electricity duty falls and recovered was not at all 25 informed nor any agenda note was ever circulated because an informal discussion is not a meeting.
13. Inspite of the affidavit of Mr. Shunglu, the petitioner did not amend the writ petition to implead the Union of India or to file affidavit of Mr. P.K. Lahri, Secretary, Department of Mines, Government of India to contradict the contents of the affidavit of Mr. Shunglu. It appears that since the meeting in its legally acceptable term was never convened; no agenda note was prepared nor any minutes of meeting were recorded the State Government could not have produced the record of the meeting dated 10.09.1990. Since no meeting had taken place, there was no necessity of maintaining a record or preparing minutes because according to Mr. Shunglu he was not authorized by the State Government to hold any formal meeting with Mr. Lahri and C.M.D. of BALCO at Delhi on 10.09.1990. Any matter concerning huge finances/revenue of the State cannot be dealt with in such causal manner the petitioner is trying to cull out from the so called informal meeting dated 10.09.1990."
30. The circumstances in which the meeting dated 10.09.1990 was held is not controverted. In absence of any agenda note to discuss a matter, which has been under consideration for a long period of time, it cannot be countenanced that there was any formal meeting based on which a decision is said to have been taken. That it was not a formal 26 meeting is also evidenced by the fact that no minutes of the meeting had been recorded. Even otherwise, the so called consensus in the meeting held on 10.09.1990 does not in any manner indicate that the electricity duty payable for any prior point of time had been waived. Till then, the petitioner was paying the electricity duty @ 3 paise per unit, but it is striking to note that after the said meeting, the petitioner started paying electricity duty @ 6 paise per unit from the month of September, 1990.
31. In paragraphs 38 and 39 of the return, the respondents stated as follows :
"38. Reply to para 2-0:- Not admitted. In a meeting held on 8.3.1986, it was specifically agreed that the petitioner, would pay duty wef. 1.7.1985, at the rate of 3 paise per unit until further revision. The agreement became nonoperative when the rates were revised and raised to 4 paise wef. 1.7.1985 and to 5 paise wef. 1.6.1986 and 8 paise wef. January, 1988 and 9 paise wef. June 1988 and 12 paise wef. 1.12.1988. The petitioners, vide letter dt. 24.10.1988, were asked to pay duty at the rate of 4 paise per unit when the duty under the Act for consumption in non-power intensive plant was 9 paise per unit.
39. Reply to para 2-0:- Not admitted. Under the agreement dt. 8.3.1986, the petitioner, was obliged to pay duty at the rate of 3 paise per unit until 1.7.1985 when the first revision after 8.3.1986, took place. It is true that the petitioner continued to pay duty at the rate of 3 paise only till May, 1988, but vide letter dt. 24.10.1988, they were asked to pay at the rate of 4 paise per 27 unit and 6 paise per unit wef. 1.12.1988. The duty which was on generation plant, installed by the petitioner, was demanded with interest vide letter dated 21.11.1990, and it is this demand which is subject matter of challenge."
32. Though the petitioner had filed rejoinder, it did not contest issuance of letter dated 24.10.1988. It is also not the case presented that they were unaware of the letter dated 24.10.1988. The letter dated 24.10.1988 reads as follows :
"GOVERNMENT OF MADHYA PRADESH ENERGY DEPARTMENT No............../...../13/88 Bhopal, 24 th Oct, 1988 To, The Secretary, M.P. Electricity Board.
JABALPUR.
Sub: Levy of Electricity Duty and Energy Develpment Cess on electricity supplied to Bharat Aluminium Co. Ltd. for their plant at Korba.
Your kind attention is invited to the Energy Deptt.'s letter No. 1509/R.1/26/XIII/85 dated 28-3-1987 by which the following decision was communicated to you in respect of the electricity duty to be charged on the electricity supplied to the Bharat Aluminium Co. Ltd.
(i) Electricity duty on non-power intensive consumption (12.1 per cent of the total) shall be charged at the normal rate applicable.
(ii) The electricity duty on the power intesnsive consumption (87.9 per 28 cent of the total) shall be charged at the rate of 3 paise per unit until further revision.
2. As you are aware, the electricity duty rates for all classes of consumers who are liable to pay electricity duty under the law have been raised by one paisa per unit w.e.f. June 1988 by the M.P. Electricity Duty (Second Amendment) Ordinance, 1988, now replaced by Madhya Pradesh Electricity Duty (Second Amendment) Act, 1988, passed by the State Legislature. As such, the rate of electricity duty on the power intensive consumption (87.9 per cent of the total) of the Bharat Aluminium Co. Ltd. also stands revised to 4 paise per unit w.e.f. June 1988. The arrears if not already billed, should be billed immediately and paid to the Government within one month from the date hereof.
BY ORDER AND IN THE NAME OF THE GOVERNOR OF MADHYA PRADESH Sd/-
(R.V. Nagar) Deputy Secretary Government of Madhya Pradesh Energy Department."
33. In the letter 19.01.1990 (Annexure - P to the writ petition), addressed to Senior Manager (E) of the petitioner, there is a reference to a letter dated 26.04.1989 issued by the Government regarding electricity payable @ 4 paise per unit from 01.06.1988 and @ 6 paise per unit from 01.12.1988. This Court, by an order dated 16.12.2019, had directed the respondents to place on record the said letter dated 26.04.1989 and accordingly, the same is brought on record. The translated version of the 29 letter dated 19.01.1990 reads as follows:
No./E.D./P/9/ /C.E./ Bhopal, Date- 19.01.90 To, Senior Manager (E) Bharat Aluminium Company Limited, P.O.- BALCO Township, Korba, District- Bilaspur (M.P.) Subject:- Electric duty of Power Intensive Unit.
.................................
Kindly peruse Memorandum No./2133/F 1/26/13/85 dated 26.04.89 of the Government. In this memorandum it was made clear that on the consumption of power intensive unit, electricity duty would be payable at the rate of 4 paise per unit from 01.06.1988 and at the rate of 6 paise per unit from 01.12.1988 but the duty is being paid by you for the said consumption at the rate of 3 paise per unit only.
Therefore, by exercising the powers provided by the Rule 15(1) of M.P. Electricity Duty Rules, it is informed that an amount of Rs.4,23,00,6592.62 Paise (Rupees Four crores twenty three lakh six hundred fifty- nine and sixty-two paise) till October, stated in the enclosed details, is due on your part.
You are requested to pay the said due amount within one month from the date of receipt of the bill and to send the original copy of the Challan.
Enclosed:- As aforesaid.
Sd/-
Chief Engineer (E/S)
30
& Chief Electricity
Inspector, Govt. of
M.P.
Endt. No./E.D./P/ /C.E./ Bhopal, Date-
Copy to:-
(1) Principal Secretary, Govt. of M.P., Energy Department, Bhopal, with copy of enclosure; for information and necessary action.
Enclosed:- As aforesaid.
Sd/-
Chief Engineer (E/S) & Chief Electricity Inspector, Govt. of M.P."
34. The letter dated 24/26.04.1989 reads as follows :
"GOVERNMENT OF MADHYA PRADESH ENERGY DEPARTMENT No. ....../....../13/89 Bhopal, 24th April, 1989 To, The Chairman-cum-Managing Director Bharat Aluminium Co. Ltd.
'Punj House' 18-Nehru Place.
New Delhi.
Dear Sir, I am desired to draw your attention to the letters dated 24/27 th October, 1988 and dated 27th December 1988 of this Department (copies again enclosed for ready reference) relating to revision of electricity duty. Through these letters, M/s BALCO were informed that duty chargeable on 31 consumption of electricity by them on power intensive operations (which is to be taken as 87.9 per cent of the total power consumed) of their plant at Korba has been enhanced as follows:-
(i) Duty chargeable from 1.6.88 :: 4 paise per unit
(ii) Duty chargeable from 1.12.88 :: 6 paise per unit
2. The State Government deeply regret that M/s. BALCO have not been paying duty according to the above mentioned rates and that arrears as on 31st March 1989 have mounted to more than Rs.2.00 crore. It may be mentioned here that prior to the revision of duty on 1.6.88, the rate of duty being charged from BALCO on power intensive operation of the Korba Plant was 3 paise per unit. This rate of duty was to remain in force only until 'further revision'. Clearly, therefore, this rate has been superseded by the revision of 1.6.88 and the subsequent revision of 1.12.88.
3. I am, therefore, desired to request you to kindly direct the General Manager of the Korba Plant to clear off the arrears on this account immediately to avoid further complications.
Your sincerely, Sd/-
(N.B. Lohani) Secretary No. 2134/F1/26/13/89 Bhopal, 24/26th April 1989 Copy forwarded to :-
1. The Secretary to Govt. of India, Ministry of Steel & Mines, New Delhi.
2. The Chairman, M.P. Electricity Board, Jabalpur.
3. The Chief Engineer (Electrical Safety) & Chief Electrical Inspector, 32 Govt. of M.P., A-Wing, IIIrd Floor, Satpura Bhavanm Bhopal.
Sd/-
Secretary Energy Department"
35. With regard to the letter dated 24/26/04.1989, the petitioner merely states that the said letter in all probability never reached the petitioner and that the same is not available on record of the petitioner. In paragraph 7 of writ petition, the petitioner had stated that it had agreed to pay electricity duty @ 6 paise per unit from September, 1990 pursuant to various meetings held. However, it is apparent that the petitioner started paying electricity duty @ 6 paise per unit from September, 1990 after the meeting dated 10.09.1990. It is also the stand of the petitioner that according to its understanding no arrears of electricity duty is payable. No minutes of any meeting has been produced by the petitioner demonstrating that there was any decision that the petitioner would not be liable for payment of electricity duty over and above the rate of 3 paise per unit, which the petitioner was paying, till September, 1990. The fact that the petitioner had started making payment of electricity duty @ 6 paise per unit from September, 1990 itself demonstrates that the rate of electricity duty has been revised by the State Government.
36. The learned Single Judge on the basis of the letter dated 28.03.1987 held that the petitioner is not liable to pay electricity duty @ 4 paise per unit from 01.06.1988 to 30.11.1988. However, no reasoning had been assigned as to why the petitioner is liable to pay electricity duty @ 6 paise per unit from 01.12.1988. If the letter dated 28.03.1987 is the key to 33 decide the issue, then evidently, in view of the finding rendered by the learned Single Judge that the petitioner is not liable to pay electricity duty @ 4 paise per unit from 01.06.1988 to 30.11.1988, logically, it should have also followed that the petitioner is not liable to pay the electricity duty @ 6 paise per unit from 01.12.1988. The letter dated 28.03.1987 provided that the rate of 3 paise per unit will continue until further revision and that the then existing rate of electricity duty @ 4 paise per unit would not be applicable to the petitioner until further orders in that behalf. Materials on record demonstrate that on a number of occasions, statutory revision of electricity duty payable by the consumers, had been effected. While electricity duty payable was enhanced from 4 paise to 5 paise and from 5 paise to 8 paise, the petitioner was allowed to continue to pay electricity duty @ 3 paise per unit. Later on, when electricity duty was enhanced to 9 paise per unit, letter dated 24.10.1988 was issued revising duty payable by the petitioner @ 4 paise per unit w.e.f. June, 1988. From the letter dated 24/26.04.1989, it also appears that by letter dated 27.12.1988, the petitioner was asked to pay electricity duty @ 6 paise per unit w.e.f. 01.12.1988. We find no merit in the submission that no notification in terms of Section 3-B (b) of the Act of 1949 had been issued revising electricity duty payable by the petitioner as revision of rate of electricity duty payable by the petitioner was done in the same manner when the petitioner was made liable to pay electricity duty @ 3 paise per unit. That apart, no notification was issued under Section 3-B of the Act of 1949. Petitioner has failed to demonstrate how the principle reiterated in Competent Authority (supra) that where the statute requires an act to be done in a particular 34 manner, the same has to be done in that manner, had been infringed in the instant case.
37. The letter dated 28.03.1987 itself provided that payment of electricity duty @ 3 paise per unit was until further revision and until further orders are issued in that behalf. There had been revision of electricity duty payable for all customers and rate of duty is also varied by passing subsequent orders.
38. On due consideration, we are of the considered opinion that the petitioner would be liable to pay electricity duty @ 4 paise per unit from 01.06.1988 to 30.11.1988 and @ 6 paise per unit with effect from 01.12.1988 onwards.
39. In view of the above discussions, Writ Appeal No. 1157 of 2012 is dismissed and Writ Appeal No. 452 of 2013 is allowed. The impugned order of the learned Single Judge is modified accordingly.
Sd/- Sd/-
(Arup Kumar Goswami) (Gautam Chourdiya)
CHIEF JUSTICE JUDGE
Hem