Back
IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
ARUP KUMAR GOSWAMI, DEEPAK KUMAR TIWARI, JJ.
M/s Indra Powergen Pvt. Limited – Appellant
Versus
State of Chhattisgarh – Respondent
WPC No. 448, 3685 of 2021, WPC No. 1677 of 2015, 1864, 1621, 1715, 1716, 1743, 1745, 1773, 1775, 1776, 1829, 2632 of 2016
Decided on : 03-11-2022
Chhattisgarh Electricity Duty Act, 1949 - Section 3-B, (b), 2(a), (d)(i) - Constitution of India, 1950 - Article 14 - Notifications - Exemption from Payment of Electricity Duty - State Government had formulated and notified its first industrial policy by notification exemption was granted to all new industries set up in State, from payment of electricity duty under provisions of Act industrial policy provides for total exemption from payment of electricity duty - Notifications with respect to exemption from payment of electricity duty under Industrial Policy cannot be sustained in law so far it relates to nullifying exemption granted in respect of sale of electricity. [Para 51]
Finding of the Court: Petitioners have been paying electricity duty - Period of 15 years from date of commencement of commercial production in respect of petitioners is also over, save and except in case of petitioner in WPC - At any rate, petitioner in WPC having not commenced commercial production, even otherwise, was not entitled to exemption from payment of electricity duty under Industrial Policy - Interim order to pay electricity duty, it has to be understood, was not in respect of self-consumption of electricity, as notification retained exemption in that respect, but same was in relation to sale of electricity by petitioners - Incidence of payment of electricity duty is finally borne by consumers - Therefore, it cannot be countenanced that petitioners have/had suffered any prejudice because of notification so far as its prospective operation is concerned - Doctrine of promissory estoppel is an equitable remedy and has to be moulded depending on fact situation - In attending facts and circumstances, it will be wholly inequitable to pin down authorities to pre-position - In that view of matter, Court is of opinion that no further orders are called for with regard to payment of electricity duty with effect notifications with respect to exemption from payment of electricity duty under Industrial Policy, cannot be sustained in law so far it relates to nullifying exemption granted in respect of sale of electricity.
Result: Petitions disposed of.
JUDGMENT :
Arup Kumar Goswami, J
In this batch of petitions, essentially, the notification dated 12.11.2014 issued under Section 3-B of the Chhattisgarh Electricity Duty Act, 1949 (for short, the Act) is challenged and therefore, as submitted by learned counsel for the parties, the writ petitions which have been listed together, have been heard analogously and are being disposed of by this common order.
2. Mr. Amit S. Agrawal, learned senior counsel, appearing for the petitioner in WPC No. 1621/2016 has made the lead argument. Mr. V.V.S.Moorthy, learned senior counsel, assisted by Mr. Shantanu Kumar, as well as Mr. Ankit Singhal, Mr. Akhil Kumar Samantray, Mr. Abhijeet Mishra, learned counsel, appearing for the petitioners have endorsed the submissions of Mr. Agrawal and they submit that for the purpose of disposal of the writ petition, reference may be made to the pleadings in WPC No. 1621/2016.
3. WPC No. 1621/2016 is filed by Chhattisgarh Biomass Energy Developers Association, through its Secretary, as petitioner No. 1, and Sudha Bio Power Pvt. Ltd. (formerly Sudha Agro Oil & Chemical Industries Ltd.), Neeraj Power Pvt. Ltd., Real Power Pvt. Ltd., Rukmani Power & Steel Ltd, Balaji Power Pvt. Ltd. (formerly known as Shivalik Power & Steel Pvt. Ltd) and Agrawal Vidyut, as petitioners No. 2, 3, 4, 5, 6 and 7. However, by an order dated 28.06.2016, the writ petition was treated to be filed only by Sudha Bio Power Pvt. Ltd. and the other five writ petitioners were directed to file separate and independent writ petitions.
4. Accordingly, Neeraj Power Pvt. Ltd., Real Power Pvt. Ltd., Rukmani Power & Steel Ltd., Balaji Power Pvt. Ltd. And Agrawal Vidyut had also filed independent writ petitions being WPC No. 1743/2016, 1745/2016, 1773/2016, 1775/2016 and 1776/2016, respectively.
5. Petitioner No. 1 is a registered association of which the petitioners No. 2 to 7 are its members. The petitioners No. 2 to 7 are engaged in business of generating power from bio-mass based power plants and have their plants at different places in the State of Chhattisgarh.
6. The case of the petitioners, as presented in the writ petition, is that the State Government of Chhattisgarh had formulated and notified its first industrial policy 2001-2006 by notification dated 03.12.2001, published in the State Gazette dated 25.01.2002. Under the said Industrial Policy, total exemption was granted to all new industries set up in the State, from payment of electricity duty under the provisions of the Act, for a period of 15 years from the date of commencement of commercial production. Subsequently, the State Government of Chhattisgarh framed industrial policy 2004-2009. Apart from others, the industrial policy provides for total exemption from payment of electricity duty.
7. It is stated that in view of the representation being made in Industrial Policy 2004-2009 of the State, the members of the petitioner association altered their position by acting on the said representation and promise and made huge investment to set up and establish industries in different places in the State of Chhattisgarh to generate power from non conventional sources and started their production from 2006-2008. It is also pleaded that notification dated 03.11.2005, 05.04.2006 and 09.07.2008 were issued to effectuate the commitment made in the Industrial Policy.
8. However, the Chief Electrical Inspector (respondent No. 3) started issuing demand notices to the members of the petitioner association for payment of electricity duty on the electrical units sold by the petitioners to the Chhattisgarh State Power Distribution Company Limited (for short, the CSPDCL) on the ground that the companies are entitled to exemption from payment of electricity duty only on the electricity duty which is used for self consumption and not on sale to the Electricity Board. Some members of the petitioner associati
Section 3(B)(b) of Act enables levy of electricity duty upon cancellation of exemption.
Electricity duty exemption notification linked to 'period of eligibility' in Eligibility Certificate under incentive scheme extends automatically with Certificate extension; saved by subsequent Act w....
The State can withdraw exemptions from electricity duty but must provide reasonable notice to affected captive power generators to allow adjustment.
The State is bound by its promises under the Industrial Policy, and failure to issue enabling notifications for incentives constitutes arbitrary action, invoking the doctrine of promissory estoppel.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
