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The Madhya Pradesh Electricity Duty Act , 1949 provides for the levy of a duty on the consumption or sale of electrical energy and under Section 3 of this Act , subject to certain statutory exceptions, every distributor and every producer of electrical energy is required to pay a monthly duty "on the electrical energy sold or supplied to a consumer or consumed by himself, for his own purpose or for purposes of his township or colony". Under the Upkar Adhiniyam, 1981, an energy development cess is levied under Section 3 on every distributor of electrical energy at a rate of one paisa per unit "on the total energy sold or supplied to a consumer or consumed by himself or his employees during any month". The similarity in the phraseology used in both these statutes in describing the incidence of tax  namely sale or supply of electricity  is significant.

By the impugned amendment in 2001, Section 3 of the 1981 Adhiniyam was substituted to provide for payment of an Energy development cess by producers of electricity as well. While setting out the substituted section, we have highlighted those portions of the section which were introduced by way of amendment.

"3. Levy of energy development cess  (1) Every distributor of electricity energy shall pay to the State Government at the prescribed time and in the prescribed manner an energy development cess at the rate of one paise per unit on the total units of electrical energy sold or supplied to a consumer or consumed by himself or his employees during any month:

Explanation: For the purpose of this sub-

section 'month' means such period as may be prescribed.

2. Every producer producing electrical energy by his captive power unit or diesel generator set of capacity exceeding 10 Kilowatt in total shall pay to the State Government an energy development cess at the rate of 20 paise per unit on the total units of electrical energy produced whether for sale or supply to a consumer or for consumption by himself or his employees during any month:

Provided that no cess shall be payable in respect of electrical energy produced by 
Provided further that the amount of energy development cess shall be collected by the Madhya Pradesh State Electricity Board and the amount so collected shall be made available to the State Government.
(3) The proceeds of the cess under sub-section (1) and (2) shall first be credited to the Consolidated fund of the State and the State Government may at the commencement of each financial year, after due appropriations has been made by law, withdraw from the Consolidated Fund of the State an amount equivalent to the proceeds of cess realized by the State Government in the preceding financial year and shall place it to the credit of a separate fund to be called the Energy Development Fund and such credit to the said fund shall be an expenditure charged on the Consolidated Fund of the State Government of Madhya Pradesh.