Judgment

SABYASACHI MUKHARJI, J.:- This appeal by special leave is directed against the judgment and order of the High Court of Allahabad dated 26th September, 1984 : (reported in 1985 All LJ 250). The first appellant is the State of Uttar Pradesh impleaded through the Chief Secretary to the Government of Uttar Pradesh, Lucknow. The second appellant is the Secretary to the Government of Uttar Pradesh, Department of Energy, Lucknow. The third appellant is one Shri Yogendra Narain, presently acting as Secretary to the Chief Minister, State of Uttar Pradesh, Lucknow. At a particular point of time Shri Yogendra Narain was the Secretary to the Department of Energy. The fourth appellant is the Assistant Electrical Inspector, a functionary under the U.P. Electricity (Duty) Act, 1952, Mirzapur Zone, Rani Patti, Mirzapur. The fifth appellant is the Collector of Mirzapur.

2. There are four respondents in this appeal. The first respondent is Renusagar Power Company Ltd. The second respondent is M/s. Hindustan Aluminium Corporation Ltd. Respondent No. 3 is Shri D. M. Mimatramka who resides at Hindalco Administrative Colony, Renukut, Mirzapur. The fourth respondent is Shri Rajendra Kumar Kasliwal who resides at Hindustan Aluminium Corporation Ltd., Renukut, District Mirzapur. Respondents 3 and 4 mentioned above are the shareholders of the first respondent and the second respondent, that is, Renusagar Power Company and M/s. Hindustan Aluminium Corporation Ltd. respectively. It is stated that M/s. Hindustan Aluminium Corporation Ltd., established an aluminium factory at Renukut in Mirzapur District, U.P. in 1959. It is the case of the respondents that it was induced to do so on the assurance that cheap electricity and power would be made available at the relevant time. In 1962, a plant of Hindustan Aluminium Corporation Ltd. for manufacture of aluminium was commissioned. M/s. Renusagar Power Co. Ltd. a wholly owned subsidiary of M/s. Hindustan Aluminium Corporation Ltd. was incorporated in 1964. M/s. Renusagar Power Company Ltd. was incorporated separately and had its own separate Memorandum and Articles of Association. On 9th September, 1967, the first generating unit of 67.5 MW in Renusagar was commissioned by M/s. Renusagar Power Company Ltd. The second generating unit of the Company was commissioned on the 5th October, 1968. The U.P. Electricity (Duty) Act, 1952 (hereinafter called the Act) came into force from 15th January, 1953 and it sought to levy a duty on the consumption of electrical energy in the State of Uttar Pradesh.

3. In the Statement of Objects and Reasons, which was published in U.P. Gazette, it was stated that the programmes of development of the State involved enormous expenditure and thus additional resources had to be raised, the bulk of which could only be raised by means of fresh taxation. It was stated that the object of the Bill, inter alia, provided as follows :

"A tax on the consumption of electrical energy will impose a negligible burden on the consumer and is a fruitful source of additional revenue. The Bill has been so prepared as to ensure that the tax payable by a person will be related to the quantity of electricity consumed by him. The Bill is being introduced with the above object."

4. By virtue of the provisions of the U.P. Electricity (Duty) (Amendment) Ordinance, 1959 various amendments were carried out in the said Act. In section 2 of the principal Act, a new clause, clause (hh) describing a scheduled industry was inserted. By virtue of the aforesaid newly inserted clause, the expression scheduled industry meant any of the industries specified in the schedule. In the proviso to Section 3 of the principal Act, after clause (d), a new clause (e) was inserted which provided for non-levy or exemption from the payment of electricity duty on the energy consumed by a consumer in a scheduled industry. The expression which was added was "by a consumer in a scheduled industry". By virtue of Section 8 of the Amending