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12 In the meantime, National Thermal Power Corporation Limited 12 had filed a writ petition 13 before the High Court challenging the imposition of electricity duty on its supply of electricity to various electricity boards including BSEB. NTPC was supplying electricity exclusively to the Electricity Boards. On 2 December 2015, the High Court passed an order tagging the writ petitions filed by the appellant and NTPC on the ground that the issue raised in both the petitions was substantially similar. Thereafter, on 20 October 2016, the High Court de-tagged the writ petitions holding that the matters are not similar since NTPC is a power generation company, while the appellant is a company which runs a sugar mill and also generates electricity from molasses. The relevant portion of the order is extracted below:

For the aforesaid reasons, the present matter shall not be heard along with the other writ petitions.”

13 On 14 December 2016, the High Court rendered its decision in the writ proceedings instituted by NTPC, holding that electricity duty cannot be imposed NTPC CWJC No 17306 of 2014 under Section 3 (1) of the Bihar Electricity Act on a power generation company supplying electricity to a licensee like the Electricity Board. The High Court’s decision was premised on two reasons. First, it relied on the judgment of this Court in State of AP v. National Thermal Power Corporation Ltd 14 to arrive at the conclusion that it is beyond the legislative competence of the State to impose a tax on the sale of electricity which is not a sale for consumption. In this regard, the High Court observed that:

(vii) The facts of the decision in NTPC and the facts giving rise to the writ petition filed by the appellant before the High Court were substantially similar. The High Court erroneously de-tagged the writ petitions and then dismissed the appellant’s writ petition while entertaining the writ petition filed by NTPC.

16 On behalf of the respondent, the following submissions have been urged referring to the scheme of the statute:

21 In Union of India v State of Haryana 25 the assessing authorities imposed sales tax on the rentals charged for supply of telephones. Writ petitions were filed in the High Court challenging the levy. The writ petitions were dismissed on the ground that an alternative remedy of a statutory appeal was available. An appeal against these orders was filed before this Court. The appeal was allowed and the matter was remanded back to the High Court for determination since it involved a question of law on whether the supply of telephones amounted to sale. 22 It is not the case of the appellant that the respondents have miscalculated the duty and penalty imposed on it. The appellant contends that the State Government does not have the power to levy tax on its sale of electricity to BSEB. Thus, the plea strikes at the exercise of jurisdiction by the Government. In view of the law discussed above on the rule of alternate remedy, the High Court can exercise its writ jurisdiction if the order of the authority is challenged for want of authority and jurisdiction, which is a pure question of law 23 The appellant is admittedly a sugar mill producing electricity from bagasse (a by-product of sugar production). The electricity that is produced is used for running the mill and the excess is sold to BSEB. There is no dispute about the nature of the transaction between the appellant and BSEB. The petition before the High Court was initially tagged with the petition filed by NTPC since it involved similar issues. However, it was subsequently de-tagged and heard separately on the ground that the appellant in this case is a sugar mill that also produces electricity, while NTPC is a power generation company. The writ (2000) 10 SCC 482 petition filed by the appellant was dismissed by the impugned judgment. Both the petitions - filed by the appellant and NTPC before the High Court challenged the power of the State Government to levy tax on sale of electricity to Electricity Boards. A three judge Bench of this court in Sree Meenakshi Mills Ltd. v Commissioner of Income Tax 26 succinctly explained the tests for the identification of questions of fact, questions of law and mixed questions of law and facts. Justice T. L. Venkatarama Aiyar writing for the Bench observed that: