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It is crucial point that the SEZ Act conceptually envisages “Developer” of an SEZ distinct from the “Zone” itself as also distinct from “Unit”. Developer is defined under Section 2(g) of the SEZ Act whereas Special Economic Zone is defined under Section (za) of the SEZ Act and Unit is defined under Section 2(zc) of the SEZ Act. Thus the Appellant in its capacity as the Developer of the SEZ has the duty to develop, operate and maintain the Zone. Failing the reconciliation between the provisions of the Electricity Act, 2003 and the SEZ Act, the provisions, objects and purpose of the SEZ Act will prevail (Section 51 of the SEZ Act). The object and purpose of the SEZ Act, inter alia, is to provide an internationally for export production, expeditious and single window approval mechanism and a package of incentives to attract foreign and domestic investments for promoting export-led growth.

17. Mr. Mehta called for harmonious construction of the provisions of SEZ and the Electricity Act to support his submission that the legal fiction of deemed Distribution Licensee cannot be taken to the level of absurdity and made applicable even when it does not involve distribution/supply of power at all. He further pointed out the object and scheme of SEZ Act envisages several units being set up in a SEZ. This is evident from a collective reading of the various provisions of the SEZ Act viz. Section 2(g)(j)(za)(zc), Section 3, 4, 11, 12, 13 and 15. There can be a Sector Specific SEZ with Several Units i.e. for IT, Mineral Based Industries etc. but instances of single unit SEZ like in the present case of the appellant may be rare. The Notification dated 3rd March, 2010 providing for the “Developer” of an SEZ being deemed as a “Distribution Licensee” was issued keeping in view the concept of Multi Unit SEZs and will apply only to such cases in which the Developer is supplying the power to multiple Units in the SEZ. The said Notification will not apply to a Developer like the Appellant who has established the SEZ only for itself.

(i) There has to be a harmonious construction of SEZ Act and Electricity Act to give effect to the provisions of both the acts so long as they are not consistent with each other in the opinion of the Tribunal. The provisions of Section 51 of SEZ Act, 2005 are to be considered along with the provisions of Section 49 of the said Act.

Accordingly, in view of the provision of the SEZ Act, 2005 and consequent notification by the Ministry of Commerce and Industry, the deemed distribution licensee status as claimed by the Appellant should also be tested through other provisions of the Electricity Act, 2003 and Electricity Rules, 2005, for certifying its validity and converting it into a formal distribution licensee. In fact, the Appellant has submitted to the jurisdiction of the State Commission, by filing a petition before the State Commission seeking for approval of the PPA and also for grant of distribution licence. The Appellate Tribunal, thus queried as to how could the Appellant now question the jurisdiction?

43. We are in agreement with the aforesaid rationale in the impugned order of the Appellate Tribunal as that is the only manner in which the two Acts can be harmoniously construed. To recapitulate briefly, in the present case no doubt by virtue of the status of a developer in the SEZ area, the Appellant is also treated as deemed Distribution Licensee. However with this, it only gets exemption from specifically applying for licence under Section 14 of the Act. In order to avail further benefits under the Act, the Appellant is also required to show that it is in fact having distribution system and has number of consumers to whom it is supplying the electricity. That is not the case here. For its own plant only, it is getting the electricity from Sterlite Ltd. for which it has entered into PPA. We have to keep in mind the object and scheme of SEZ Act which envisages several units being set up in a SEZ area. This is evident from a collective reading of the various provisions of the SEZ Act viz. Section 2(g)(j)(za)(zc), Section 3, 4, 11, 12, 13 and 15. There can be a Sector Specific SEZ with Several Units i.e. for IT, Mineral Based Industries etc. but instances of single unit SEZ like in the present case of the Appellant may be rare. The Notification dated 03.03.2010 providing for the “Developer” of SEZ being deemed as a “Distribution Licensee” was issued keeping in view the concept of Multi Unit SEZs and will apply only to such cases in which the Developer is supplying the power to multiple Units in the SEZ. The said Notification will not apply to a Developer like the Appellant who has established the SEZ only for itself.