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2014 Supreme(Guj) 541
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R.M. Chhaya, J.
Zeal Energy Industries-Through Partner – Appellant
Vs.
State of Gujarat-Through Secretary & 2 Ors. – Respondent
Application No. 3578 of 2011
Decided On: 17.04.2014
Advocate Appeared
For Appellant/Petitioner/Plaintiff:Mr. Mankad, Advocate for the Petitioner(s) No. 1
For Respondents/Defendant:Mr. Vishal Patel, AGP for the Respondent(s) No. 1-2 and Mr. Premal R. Joshi, Advocate for the Respondent(s) No. 3
The main legal point established in the judgment is that a new industrial undertaking is entitled to exemption from electricity duty under Section 3(2)(vii) of the Bombay Electricity Duty Act, 1958 from the date it commenced manufacturing operations, and the installation date of separate meters should not be the sole basis for denying such exemption.
Headnote:
Electricity Duty Exemption - Industrial Undertaking - Bombay Electricity Duty Act, 1958, Section 3(2)(vii)
Fact of the Case:
The petitioner, a new industry, sought exemption from electricity duty under Section 3(2)(vii) of the Bombay Electricity Duty Act, 1958 from the date it commenced manufacturing operations. The petitioner's claim was denied based on the installation date of separate meters for industrial and non-industrial lighting.
Finding of the Court:
The court found that the petitioner started manufacturing from 23.10.2007 and that separate meters for industrial and non-industrial lighting were installed on 11.10.2008 and 25.10.2008, respectively. The court held that the denial of exemption based on the installation date of separate meters was unjust and arbitrary, and the impugned order was quashed and set aside.
Issues: The main issue was the entitlement of the petitioner to exemption from electricity duty under Section 3(2)(vii) of the Act based on the date of commencement of manufacturing and the installation date of separate meters for industrial and non-industrial lighting.
Ratio Decidendi: The court held that the petitioner is entitled to exemption from the date it commenced manufacturing operations, and the denial of exemption based on the installation date of separate meters was improper. The court also emphasized that the authority must consider the submissions of the petitioner and issue a fresh certificate in accordance with the law.
Final Decision: The impugned order was quashed and set aside, and the authority was directed to give the petitioner an opportunity of hearing and issue a fresh certificate considering the provisions of Section 3(2)(vii) of the Act and the relevant Rules by a specified date.
R.M. Chhaya, J.
1. By way of this petition under Article 226 of the Constitution of India, the petitioner has challenged the order dated 05.01.2010 passed by respondent No. 2-authority and has also prayed for directing respondent No. 2 -authority to grant exemption certificate for five years from 24.09.2007 as per Section 3(2)(vii) of the "Bombay Electricity Duty Act, 1958" ('the Act' for short), and has also prayed for directing respondent No. 3-"Paschim Gujarat Vij Company Limited" ('Electricity Company' for short) to include the units consumed for factory lighting for the purpose of calculating the electricity duty and for the purpose of exemption from the same and has also further prayed for directing respondent No. 3-Company to issue fresh statement showing the separate electric consumption from November 2008 to June 2009 and calculation of exempted amount of electricity duty.
2. The facts, which can be culled out from the record of the petition are as under:-
2.1 The petitioner is a consumer of respondent No. 3-Electricity Company and is having high tension electricity connection bearing No. 31097. The petitioner is a new industry and it commenced its manufacturing operation on and with effect from 24.09.2007.
2.2 It is the case of the petitioner that the petitioner ought to have been granted exemption certificate from 24.09.2007 and not from 11.10.2008 as far as motive power is concerned. It is the case of the petitioner that as per the provisions of Section 3(2)(vii) of the Act, the petitioner is entitled to exemption from payment of electricity duty as it is a new industrial undertaking, for a period of five years from the date on which, it begun to manufacture or produce the goods for the first time.
2.3 It further reveals that two separate meters for factory lighting (industrial use) as well as for office lighting (non-industrial use) were installed on 11.10.2008 and 25.10.2008 respectively.
2.4 That on application being made by the petitioner, the petitioner has been granted provisional certificate dated 22.05.2009 (at Annexure: A), whereby the authority has granted exemption under Section 3(2)(vii) of the Act from 11.10.2008 to 24.10.2008 for motive powers and from 25.10.2008 to 27.10.2012 on their H.T. Connection No. 31097 for motive power and industrial lighting only.
2.5 It further appears that after such certificate was granted, the petitioner approached respondent No. 2-authority by way of application dated 03.08.2009 and in reply to the same after considering letter dated 27.10.2009 written by respondent No. 3-Company, respondent No. 2-authority has passed the impugned order dated 05.01.2010, whereby respondent No. 2-authority has observed that the benefit of exemption which is granted, is as per letter dated 24.12.2008. It further observed that the petitioner is not entitled for the benefits of exemption as provided under Rule 10(2) of the Act. The said order is impugned in the present petition.
2.6 In response to the notice issued by this Court, respondent No. 2-authority has filed an affidavit-in-reply, wherein it is stated as under:-
7. I say that the answering respondent received application dated 4th April 2008 from the petitioner for grant of exemption certificate as per section 3(2)(vii) of the Act. In pursuance to the application given by the petitioner, the answering respondent vide letter dated 10th April 2008 called upon the petitioner to furnish the detailed stated therein like exact date of commencement of production of goods, month wise electricity consumption statement for motive power and industrial lighting and other lights etc. It was further requested to install separate meter for non industrial lighting and other non industrial purpose immediately. A copy of the letter dated 10th April 2008 is annexed hereto and marked Annexure-R1. I submit that as per Rule 10 of the Bombay Electri
