Jharkhand High Court
The Tata Steel Limited vs The State Of Jharkhand on 17 March, 2020
Author: Deepak Roshan
Bench: H. C. Mishra, Deepak Roshan
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(T) No. 2965 of 2013
The Tata Steel Limited
office at Bombay House, 24 Homi Mody
Street, Mumbai and its Collieries in the name
and style of West Bokaro Collieries, Coal Area,
Ghato, Hazaribagh through its Chief Legal
(Corporate Services), Mrs. Meena Lall. ..... Petitioner
-Versus-
1. The State of Jharkhand.
2. The Secretary-cum-Commissioner,
Finance Department, Government of Jharkhand,
Project Building, Dhurwa, Ranchi.
3. The Joint Commissioner of Commercial Taxes
(Administration), Hazaribagh Division, Hazaribagh.
4. The Deputy Commissioner of Commercial Taxes,
Ramgarh Circle, Ramgarh.
5. The Assistant Commissioner of Commercial Taxes,
Ramgarh Circle, Ramgarh.
6. The Commercial Taxes Officer, Ramgarh Circle,
Ramgarh. ..... Respondents
--------
CORAM : HON'BLE MR. JUSTICE H. C. MISHRA
: HON'BLE MR. JUSTICE DEEPAK ROSHAN
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For the Petitioner : Mr. Sumeet Gadodia, Advocate
For the Respondents : Mr. Atanu Banerjee, Sr. S.C-III
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JUDGEMENT
CAV on: 19.02.2020 Pronounced on:17.03.2020 Per Deepak Roshan, J:- The instant writ application has been preferred by the
petitioner-Company for quashing the Notification No. 125 dated 28.06.2011 (Annexure-5) issued by the Government of Jharkhand through its Commercial Taxes Department, to the extent the said notification has given retrospective effect to the definition of 'Industrial Unit' and 'Mines' inserted vide Section-3(i) and Section-3(k) of the Jharkhand Electricity Duty (Amendment) Act, 2011 [hereinafter referred to as "Amendment Act, 2011"].
2. The Petitioner-Company is engaged in the business of manufacture and sale of Iron and Steel and is having its manufacturing unit in the State of Jharkhand at Jamshedpur and is also having its Captive Mines in the State of Jharkhand. The present dispute pertains to its colliery 2 known as "West Bokaro Colliery" situated in the district of Ramgarh in the State of Jharkhand. Under the provisions of the Bihar Electricity Duty Act, 1948 [hereinafter referred to as Duty Act]; the petitioner is required to pay electricity duty to the State Government on consumption of electricity in its mines and washery. As per the schedule prescribing the rate of duty under the aforesaid Act, Electricity Duty is leviable @ 2 paise per unit of energy for 'Industrial purposes' and @ 15 paise per unit on energy for 'Mining purposes'.
3. It is the case of the petitioner that in respect of its colliery situated in the district of Ramgarh, coal is extracted from the mines and the same is loaded in dumper and trucks and carried to crushing plant for crushing into small pieces. Thereafter the said coal which is called "Run of Mines" (ROM) is sent to washery, which according to the petitioner is situated far away from the site of mining, for cleaning and washing the coal. Resultant product is transported through ropeway to the railway siding i.e. Chainpur Loading Complex from where washed coal is transported to the petitioner's steel Plant at Jamshedpur for consumption.
4. The further case of the petitioner is that it used electricity in its washery, crushing plant and in Chainpur Loading Complex and paid duty @ 2 paise per unit on the energy treating it to be an 'industrial activity'.
5. For the period 2001-02 to 2004-05, regular assessment orders under the Duty Act was passed by the Assessing Officer wherein the claim of the petitioner towards levy of electricity duty @ 2 paise per unit on the units of energy consumed in its washery, crushing plant, Chainpur Loading Complex etc., was accepted. However, subsequently review proceedings were initiated against the petitioner-company for the period 2001-02 to 2004-05, and the Assessing Officer passed Review Orders assessing liability of Electricity Duty @ 15 paise per unit, by treating the activity of washery, crushing plant, etc., as an activity under taken for 'Mining Purposes', and, thus liable to duty @ 15 paise per unit as per the schedule of the Duty Act. The said orders of review was challenged by the petitioner by filing writ applications before this Court being W.P.(T) No. 2593 of 2010, W.P.(T) No. 2606 of 2010, W.P.(T) No. 2600 of 2010 and W.P.(T) No. 2601 of 2010 and vide order dated 24.06.2010 the said writ 3 applications were dismissed by the Writ Court holding that the activity of crushing of coal after its extraction from Coal Mines falls under the category 'mining purposes' and not for 'industrial purposes'. Relevant paragraph of said judgment is as under:-
"7. In view of the above quoted observation of the Supreme Court, it cannot be said, as argued from the side of the petitioner, that 'mining' comes to an end merely upon extraction of the coal or iron ore or other such minerals from the mines. The process of washing of coal, subsequent to its extraction from the mine, is an integral part of mining. Further, the mere washing of coal does not bring into existence the commercially difference and distinct commodity from that which was originally extracted from the mine. Thus, the test prescribed in the aforesaid decision of the Supreme Court also makes it clear that the washing of the coal is merely a part of mining.
8. Therefore, the basic contention of the petitioner that electricity consumed for washing of the coal after its extraction from the coal mine is not a 'mining purpose' but is an 'industrial purpose' is not sustainable."
6. The petitioner being aggrieved by the aforesaid order preferred Special Leave Petition before the Hon'ble Supreme Court of India and the Hon'ble Apex Court vide its order dated 07.07.2011 passed in Special Leave to Appeal (Civil) Nos.30252-30255 of 2010, has been pleased to grant leave in the said appeal.
7. Thus, from the recital of facts stated hereinabove, it would transpire that there has been ongoing dispute between the petitioner and respondent-State of Jharkhand regarding the liability of Electricity Duty on the units consumed by the petitioner in its whashery, crushing plant and Chainpur loading site and the matter is pending adjudication before the Hon'ble Apex Court in the S.L.P. filed by the petitioner.
8. During the pendency of the aforesaid Civil Appeal, the State of Jharkhand vide "The Jharkhand Electricity Duty (Amendment) Act, 2011" amended the provisions of the Bihar Electricity Duty Act, 1948, and for the first time introduced therein the Definition of 'Industrial Unit' and 4 'Mines' as contained under Sections- 3(i) and 3(k) respectively of the said Amendment Act, 2011.
Section-1(iii) of the said Amendment Act provided, inter-alia that the provisions of the Act shall come into force on such date, as the State Government may, by notification, appoint. In purported exercise of powers under Section-1 (iii) of the Amendment Act, 2011, the State of Jharkhand issued notification dated 28.06.2011 giving retrospective effect to the definition inserted under Section- 3 of the Amendment Act, 2011, to be effective from 10.06.2003.
This notification is under challenge in the present writ application to the extent the provisions contained under Section-3, particularly the definitions of 'Industrial Unit' and 'Mines' have been given retrospective effect.
9. Mr. Sumeet Gadodia, learned Counsel appearing for the petitioner submitted that Section- 1 (iii) of the Amendment Act of 2011 is in the nature of conditional legislation and the State Government in exercise of said power, cannot bring into operation the amending Act retrospectively; from a date anterior to the passing of the Act by the State legislature. In other words, it has been submitted that it is open for the State Government to notify a date prescribing the operation of the Act which can only be subsequent to the passing of the Act by the State legislature and not prior to it. Learned counsel further contended that the petitioner would be adversely affected by virtue of retrospective operation given to the amendments carried out by the Amendment Act of 2011, wherein for the first time 'Industrial Unit' and 'Mines' have been defined which have been made effective from 10.06.2003. It has been submitted that Civil Appeal pending before the Hon'ble Supreme Court of India relates to the period 2001-02 to 2004-05 and hence, substantially, the period of litigation before the Hon'ble Apex Court would be affected by virtue of the said amendment which has compelled the petitioner to file the present writ application.
10. Reliance has been placed by the learned Counsel for the petitioner on the following judgments to support its contention that retrospective operation of the provision of the Amending Act, 2011 cannot be accorded by the State Government anterior to the date of passing of the enactment in 5 exercise of power under Section -1(iii) of the Amendment Act of 2011, namely;
(i) A.Thangal Kunju Musaliar Vs. M. Venkatachalam Potti, and Anr, reported in (1955) 2 SCR 1196:AIR 1956 SC 246 (Relevant paragraphs 3, 5 and 39)
(ii) I.T.C.Bhadrachalam Paperboards Vs. Mandal Revenue Officer, A.P. & Ors, reported in (1996) 6 SCC 634 (Relevant paragraphs - 26, 27 and 28)
11. Per Contra, Mr. Antanu Banerjee, learned Senior Standing Counsel-I appearing on behalf of State of Jharkhand, supported the notification dated 28.6.2011 and contended inter-alia, that Section 1(iii) of the Amendment Act of 2011 authorises the State Government to fix such dates as it may think fit for giving effect to the provisions of the amendment Act of 2011 and in exercise of such power, the State Government is competent to give retrospective operation to the definition of 'Industrial Unit' and 'Mines' as contained under Section 3(i) and 3(k) of the Amendment Act of 2011.
12. It has been further submitted that the definitions of 'Industrial Unit' and 'Mines' have been incorporated to rectify the anomaly which enables the Mines Owner like the petitioner to pay lessor electricity duty on consumption of electricity in mining related activities by clubbing such activities to be an activity akin to 'Industrial purpose'. It has been further contended that by virtue of definition inserted under the Amendment Act of 2011, no new liability has been created, rather in the case of the petitioner itself, this Court has held that activity of washing of coal is falling under mining activity and is, thus liable to electricity duty @ 15 paise per unit. In substance, it has been contended that amendment in question is clarificatory in nature and would, thus, have retrospective operation. He further contended that in the case of Mysore State Road Transport Corporation Vrs. Babajan Conductor & Anr. reported in (1977) 2 SCC 355, the Hon'ble Apex Court has held that High Court cannot issue direction to meet the requirements of an individual case if the Act do not provide for it. He further relied upon the judgment passed in the case of Zile Singh Vrs. State of Haryana & Ors. reported in (2004) 8 SCC 1, contending that the presumption against retrospective operation is not applicable to declaratory statute. Retrospectivity is not to be presumed and 6 rather there is presumption against the retrospectivity. The counsel for the respondents-State further relied upon Full Bench decision of this Court in the case of the petitioner itself namely Tata Steel Ltd Vrs Union of India and Ors, reported in (2018) 2 JLJR 490, to content inter-alia that the activity of washing of coal has been held by this Court to be falling within the definition of 'Mines' under the Mining Act, and, subject to realization of royalty under the Mines and Minerals (Development and Regulation) Act, 1957.
13. It has been further contended that the writ application filed by the petitioner is not maintainable as the petitioner has no cause of action for challenging the impugned notification dated 28.06.2011.
14. We have carefully considered the arguments advanced by the parties and perused the provisions contained under the Amending Act, 2011.
15. The only question involved for proper adjudication of the instant writ application is "Whether Section- 1(iii) of the Amendment Act of 2011 authorises State Government to bring into force the provision of the said Act from a date anterior to the date of its enactment by the State Legislature"
16. For the purpose of answering the said question, it would be appropriate to quote the provision of Section- 1 (iii) of the Jharkhand Electricity Duty (Amendment) Act, 2011, which reads as under:-
" 1. Short title, extent and commencement- ...........
........
(iii) It shall come into force on such date as the State Government may, by notification, appoint and different dates may be appointed for different provisions of this Act and any reference is any such provision to the commencement of this Act shall be construed to the commencement of that provision".
17. The issue involved in the present writ application is no longer res-integra and has already been considered and answered by the Hon'ble Apex Court in the case of A. Thangal Kunju Musaliar 7 (Supra). In the said judgment, statute provided that it was to come into force on a date notified in the Government Gazette. The Statute was passed by the Legislature on 7.03.1949 and notification was issued on 26.07.1949 bringing the Statute into force w.e.f. 22.07.1949. The operation of the Statute was not from the date prior to its passing and in that back ground it was held that the said Act cannot be said to have retrospective operation. In paragraph-39 of the said judgment, the Hon'ble Apex Court held as under:-
"39. It is urged that the notification issued on 26.7.1949 was bad in that it purported to bring the Act into operation as from 22.7.1949. The reason relied upon is that the Government could not, in the absence of express provision, authorising it in that behalf, fix the commencement of the Act retrospectively. The reason for which the Court disfavours retrospective operation of laws is that it may prejudicially affect vested rights. No such reason is involved in this case. Section 1(3) authorises the Government to bring the Act into force on such date as it may, by notification, appoint. In exercise of the power conferred by this section the Government surely had the power to issue the notification bringing the Act into force on any date subsequent to the passing of the Act. There can, therefore, be no objection to the notification fixing the commencement of the Act on 22.07.1949 which was a date subsequent to the passing of the Act. So the Act has not been given retrospective operation, that is to say, it has not been made to commence from a date prior to the date of its passing. It is true that the date of commencement as fixed by the notification is anterior to the date of the notification but that circumstance does not attract the principle disfavouring the retroactive operation of a statute. Here there is no question of affected vested rights. The operation of the notification itself is not retrospective. It only brings the Act into operation on and from an earlier date. In any case, it was in terms authorized to issue the notification bringing the Act into force on any date 8 subsequent to the passing of the Act and that is all that the Government did. In this view of the matter, the further argument advanced by the learned Attorney-General and which found favour with the Court below, namely, that the notification was at any rate good to bring the Act into operation as on and from the date of its issue need not be considered. There is no substance in this contention."
(emphasis supplied)
18. The aforesaid judgment in the case of "A. Thangal Kunju Musaliar (Supra)" was subsequently followed by the Hon'ble Apex Court in the case of "I.T.C. Bhadrachalam Paperboards Vs. Mandal Revenue Officer, A.P. & Ors (Supra)" and while interpreting similar provisions under the concerned Act, it was held that the period specified in the exemption notification has to be subsequent to the commencement of the Act.
19. Recently, the Hon'ble Supreme Court in the case of "Federation of Indian Mineral Industries and Ors Vs. Union of India and Ors, reported in (2017) 16 SCC 186" was considering the question as to from which date "District Mineral Foundation" can be operated in view of Section-9-B of the Mines and Minerals (Development and Regulation) Act, 1957. The Hon'ble Apex Court while relying upon the judgment of A. Thangal Kunju Musaliar (Supra), has held in para-21 and 22 as under:-
"21. To answer this issue, it is necessary to first of all decide whether the DMF has in fact been established retrospectively. The learned Additional Solicitor General submitted that the DMFs were not established with retrospective effect. His contention was that under Section 9-B of the MMDR Act the DMF could be established with effect from 12-1-2015 or any date thereafter. Some States chose to issue a notification establishing the DMF from an anterior date (12-1-2015) while some others did not, notwithstanding the direction of the Central Government. According to the learned Additional Solicitor General establishing the DMF from a date anterior to the date of the notification did not mean that the DMF was established with retrospective effect. He relied on a decision of the Constitution Bench of this Court in A. Thangal Kunju Musaliar v. M. Venkatachalam Potti in support of his contention.
22. Musaliar advances the case of the learned Additional Solicitor General. The Constitution Bench acknowledged that the general law is that a statute comes into force on the day it received the assent of the 9 competent authority. However that date could be postponed if so provided in the statute. In Musaliar the statute provided that it was to come into force on a date notified in the Government Gazette. Since the statute was passed by the legislature on 7-3-1949 it would have ordinarily come into force on that date but by virtue of Section 1(3) of the statute, a Notification was issued on 26-7-1949 bringing the statute into force on 22-7-1949 a date obviously later than 7-3-1949. The Constitution Bench held that the notification did not prejudicially affect any vested rights and (by implication) its retrospective operation could not be looked upon with disfavour. Moreover, the operation of the statute was not from a date prior to its passing and so it could not be said to have retrospective operation. Fixing a date anterior to the date of the notification bringing the statute into force did not attract the principle of disfavouring retrospective operation. The Constitution Bench however did not consider the further submission of the learned Attorney General that the notification was good to bring the statute into operation from the date of issue of the notification. The law laid down by the Constitution Bench is quite explicit when it was held: (A. Thangal Kunju case, AIR pp. 258-59, para
39) "39. ... The reason for which the Court disfavours retroactive operation of laws is that it may prejudicially affect vested rights. No such reason is involved in this case. Section 1(3) authorises the Government to bring the Act into force on such date as it may, by notification, appoint. In exercise of the power conferred by this section the Government surely had the power to issue the notification bringing the Act into force on any date subsequent to the passing of the Act. There can, therefore, be no objection to the notification fixing the commencement of the Act on 22-7-1949 which was a date subsequent to the passing of the Act. So the Act has not been given retrospective operation, that is to say, it has not been made to commence from a date prior to the date of its passing. It is true that the date of commencement as fixed by the notification is anterior to the date of the notification but that circumstance does not attract the principle disfavouring the retroactive operation of a statute. Here there is no question of affecting vested rights. The operation of the notification itself is not retrospective. It only brings the Act into operation on and from an earlier date. In any case it was in terms authorised to issue the notification bringing the Act into force on any date subsequent to the passing of the Act and that is all that the Government did. In this view of the matter, the further argument advanced by the learned Attorney General and which found favour with the court below, namely, that the 10 notification was at any rate good to bring the Act into operation as on and from the date of its issue need not be considered."
20. In view of aforesaid judgment of Hon'ble Apex Court, we have no hesitation to hold that notification dated 28.06.2011 to the extent it gives retrospective operation to the definitions of 'Industrial Unit' and 'Mines' contained in Section 3(i) and 3(k) is beyond the powers conferred upon the State Government and to that extent, notification is bad in law.
21. One of the arguments which have been advanced by the learned counsel for the State Government that the petitioner has no cause of action for preferring the present writ application and in that view of the matter, the writ application is fit to be dismissed as not maintainable. We are not impressed with the said arguments advanced by the respondent-State Government, as admittedly, the petitioner is a dealer liable to pay electricity duty under the Act and said Rule has been framed 'in rem' and not 'in personem' and, thus, can be challenged by the writ petitioner, as it may adversely affect it on the issue of determination of rate of duty to be levied under the Act. Apart from above, we further find force in the submission of the learned counsel for the petitioner that retrospective effect to the definitions, may, even have an impact on the pending Civil appeal of the petitioner before the Hon'ble Supreme Court. Thus, in our opinion, the petitioner has valid cause of action to maintain the present writ application.
22. Another argument which has been advanced on behalf of respondent-State Government regarding clarificatory nature of the amendment and its retrospective effect owing to the said fact, also does not merit consideration in the present writ application. The question involved in the present writ application is only whether in exercise of power under section- 1(iii) of the Amending Act, 2011, the definition of the 'Industrial Unit' and 'Mines' can be given retrospective operation with effect from 10.06.2003. Whether or not the said definition would be merely clarificatory in nature and would have otherwise retrospective operation is not the subject matter of the adjudication in the present writ application and we refrain ourselves to comment upon the same. However, it is interesting to note that on one hand the State Government is contending that definition 11 inserted vide Amendment Act of 2011 by itself is retrospective in nature, and on the other hand, the State Government has issued notification giving retrospective effect to the said amendment, that too only with effect from 10.06.2003. The said stand of the State Government is contradictory to each other. However, as already stated above, we refrain ourselves from commenting upon the retrospective operation of the definitions of 'Industrial Unit' and 'Mines' on the ground that it is clarificatory in nature and keep it open to be decided in an appropriate proceeding in accordance with law.
23. Accordingly, the present writ application is allowed and the notification dated 28.06.2011 to the extent it gives retrospective operation to the definition of 'Industrial Unit' and 'Mines' as contained in section 3(i) and 3(k) of the Jharkhand Electricity Duty (Amendment) Act, 2011 is hereby quashed and set aside. The writ application is allowed to the aforesaid extent. However, no order as to cost.
(Deepak Roshan, J.)
H. C. Mishra, J.:- I agree
(H. C. Mishra, J.)
The High Court of Jharkhand,
Ranchi
Dated: 17 /03/2020
AFR/Pramanik