The main legal point established in the judgment is that the State was bound to fulfill its promise of reimbursement and indemnification as per the terms of the agreement, and the court issued a writ of mandamus to enforce this obligation.

( 1 ) THESE writ petitions were referred to division Bench by a learned single Judge of this Court. The petitions are filed by Indian aluminium Company Ltd. , (referred hereinafter as 'the petitioner') and one of its shareholders. The substance of the several reliefs sought, is, to restrain the enforcement of revised rates of electricity tax with effect from 18-8-1981 and/or, for a direction to the first respondent to reimburse the petitioner of the amounts paid which is in excess of the rate of 3% of the invoice amount as specified in clause 6 (c) of the Agreement between the parties. The other prayers are all incidental or ancillary to the basic relief sought, by the petitioner.

( 2 ) THE plea of the petitioner is as follows : in the year 1966 the Government of mysore had undertaken the Sharavathi Valley Hydro Electric Project in the State and had plans for the construction of a hydroelectric generating system to generate a large quantity of electric power. At this point of time the respondent State was anticipating a large surplus of power. In view of the fact that aluminium requires large amount of power for its manufacture, the 2nd respondent Board and the state invited and/or encouraged the petitioner to establish the said factory at Belgaum. At all material times Karnataka electricity (Taxation on Consumption) Act 1959 (hereinafter referred as 'the Taxation act') was and is in force. This law imposed a tax on the units of electricity consumed every month. The tax was calculated, as per Sec- tion-3, at a rate not exceeding six paise per unit of energy as may, by notification, be specified by the State Government and different rates may be specified in respect of different classes of consumers. Other provisions of this Taxation Act relating to certain formulas, to determine the units of consumption, payment of tax etc. , need not be referred here. In March 1966, a tripartite agreement was entered into between the petitioner, the State government and the Board, terms of which provide for the supply of electricity to the petitioner's factory at Belgaum, the rate to be applied for the price of electricity supplied and the other matters. Clause 6 (c) of this agreement provided for the levy and payment of electricity tax. It limited the tax or duty liability of the petitioner to 3% of the invoice amount during the first 25 years period and thereafter to 6% of such invoice amount during the next 25 years period. The clause, further stated that,". . . . . IF the consumer is required to bear or pay during the said first 25 years period and the second 25 years period on account of electricity tax or duty any amount in excess of the said three per cent or six per cent as the case may be, of such invoice amount by reason of the provisions of any existing statute or as a result of amendment of any subsisting electricity tax or duty or on account of any additional imposition, on the consumers of electricity in the State of Mysore, of any tax, duty, fee, surcharge, levy, toll, cess or any other imposition on their electricity power consumption then the Government shall reimburse the consumer in respect of all such excess payments and shall also keep the consumer indemnified against all claims and demands of any authority for such excess payment. "the supply of power to the petitioner commenced as per this agreement, on 23rd october 1969. Requirement of large units of electricity for the Smelter plant in the process of manufacturing aluminium and the unique features of aluminium production and its complete dependence on the continuous supply of electricity, the high rate of consumption of electricity in the smelter plant, etc. , are the circumstances which made the parties to agree in respect of the several clauses in the tripartite agreement referred above. The Government of India, having realised the importance of supply of electric power to the aluminium industry, announced its aluminium policy on 15th July 1975