1996 Supreme(Pat) 141

PATNA HIGH COURT
B.N.Agrawal and A.N.Trivedi JJ.
Bihar Alloy Steels Ltd.
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 283 of 1996 ;
Decided On : FEBRUARY 29, 1996

A consumer is not liable to pay surcharge under the provisions of the Bihar Electricity Duty Act, 1948.

Headnote:

ELECTRICITY DUTY - Liability to pay - Petitioner-company, a manufacturer of alloys, tool and special steel, purchased electricity from DVC, a licensee under the Bihar Electricity Duty Act, 1948 (the Act) - Petitioner-company applied for registration as an assessee under the Act and was registered - Later, the petitioner-company realized its mistake and filed an application for cancellation of the registration - The petitioner-company received a notice from the Deputy Commissioner, Commercial Taxes, in relation to assessment years 1990-91 to 1994-95 fixing the date of hearing for the purpose of imposing surcharge under the provisions of Sec. 3A of the Act - The petitioner-company appeared before the authority concerned on the said date and filed a time petition - Subsequently, an objection was filed on behalf of the petitioner-company before the authority denying its liability to pay the amount of surcharge - Thereafter, the petitioner-company was intimated by the Branch Managers of three banks that they have received orders of attachment, issued by the Deputy Commissioner, Commercial Taxes, Hazaribagh, stating therein that there is a liability on account of surcharge against the petitioner-company to the tune of Rs. 1,17,64,355.56 paise, therefore, the aforesaid banks were directed to deposit the said amount in the account of the Deputy Commissioner, Commercial Taxes, Hazaribagh - The petitioner-company filed a writ application for quashing the orders of attachment and for a declaration that the petitioners are not liable to pay amount of surcharge under Sec. 3A of the Act.

Fact of the Case:

The petitioner-company is a manufacturer of alloys, tool and special steel and it purchases electricity from Damodar Valley Corporation (DVC), which is a licensee within the meaning of Sec. 2(d) of the Act for the purpose of its industry under an agreement executed between DVC being licensee and the petitioner-company as consumer. According to Clauses 17 of the agreement, the petitioner-company, which was a consumer, was liable to pay electricity duty (hereinafter to be referred to as duty) to the Government of Bihar on the electricity purchased by it from the DVC. The petitioner-company under ill advice applied for its registration as an assessee under the provisions of the Bihar Electricity Duty Rules, 1949 (hereinafter to be referred to as the Rules) and it was registered as an assessee. Later on, the petitioner-company having realised its mistake filed an application before the respondent-Deputy Commissioner, Commercial Taxes, for cancellation of the registration.

Finding of the Court:

The petitioner-company is not liable to pay duty under the provisions of the Act to the State Government but the DVC is entitled to recover duty from the petitioner-company in respect of energy sold to it even by enforcing Clauses 17 of the agreement requiring the petitioner-company to deposit duty with the State Government on the amount of energy sold to it and in that event, the petitioner-company shall be depositing duty as a representative of DVC. The petitioner-company is not liable to pay surcharge under the provisions of the Act and consequently, the proceeding taking against it by the authorities of the Commercial Taxes Department; Government of Bihar, for realisation of surcharge and orders of attachment of its bank accounts, contained in Annexures 4, 5 and 6, are liable to be quashed and the amount of Rs. 20,04,361.81 paise recovered by them from the banker of the petitioner-company is liable to. be refunded to it.

Issues: Whether the petitioner-company is liable to pay duty under the provisions of the Act? Whether the petitioner-company is liable to pay surcharge under the provisions of the Act?

Ratio Decidendi: The petitioner-company is not a licensee and does not come within the expression "every other person" as enumerated in-Sec. 4 and consequently not liable to pay duty under Sec. 4 of the Act. Therefore, it does not come within the mischief of Sub-sec. (1) of Sec. 3A of the Act and is, accordingly, not liable to pay surcharge to the State Government. Sub-sec. (2) of Sec. 3A lays down that neither any licensee nor any other person, who is liable to pay surcharge, shall be entitled to collect the amount of surcharge from the consumer. The petitioner-company is a consumer within the meaning of Sec. 2(b) of the Act, therefore, DVC, which is a licensee, is not entitled to collect the amount of surcharge from it on the quantum of energy sold in its favour in view of the legislative command upon the licensee or other person, who have been injuncted to recover the amount of surcharge from the consumer.

Final Decision: The writ application is allowed, proceeding taken by the officers of the Commercial Taxes Department, Government of Bihar, of recovery of the amount of surcharge under the provisions of the Act from the petitioner-company and orders of attachment, contained in Annexures 4, 5 and 6, are hereby quashed. Respondents-State of Bihar and its officers are directed to refund aforesaid sum of Rs. 20,04,361.81 paise to the petitioner-company within a period of three months from today.