This appeal is directed against the judg­ment and order dated 23rd February, 2000 passed by the learned Single Judge in Civil Rule No. 1667/1989 (Guwahati), which was renumbered as Civil Rule No.143/1991 (Imphal), whereby and whereunder the writ petition filed by the appellant challenging the notice of demand dated 27th July, 1989 for Rs.71,21,27,675/- (Rupees Seventy One Crores Twenty One Lakhs Twenty Seven Thousands Six Hundred Seventy Five) issued by the Chief Engineer, Electricity Department of Government of Manipur, towards the sales tax payable under the provisions of the Manipur Tax on Sale of Electricity Act, 1984 (in short," 1984 Act") has been partly allowed while refusing to set aside the said demand notice.

2. The appellant filed the said writ petition contending inter alia that the Government of India issued the Office Memorandum requir­ing the appellant to supply the electricity gen­erated by it in Loktak Hydro Electric Power Project in the State of Manipur to all the States in the North Eastern Region, as per require­ment and thereafter, in view of the subsequent decision of the Ministry of Energy, Govern­ment of India taken on 13th November, 1990 allocating the quantum of power to be sup­plied to different North Eastern States, as the power purchase agreements were entered into with those States including the States of Assam and Nagaland, apart from the State of Manipur for supply of the allocated quan­tum of power, no tax can be levied by the State of Manipur under the provisions of 1984 Act, in respect of the sale of power to the States of Assam and Nagaland, such sale being the inter-States sale. According to the appellant, the electricity generated in Loktak Hydro Electric Power Project was transmit­ted to Dimapur in Nagaland and Mariani in Assam, apart from transmission to Imphal in Manipur and hence for sale of the electricity to the consumers outside the State, pursuant to the purchase agreements entered into for consumption outside the State of Manipur, no sales tax under the Act can be levied and re­alized, such sale being the inter-State Sale and outside the purview of the 1984 Act. The appellant, therefore, has prayed for, apart from others, declaration that Section 2(g) of the 1984 Act is ultra-vires the Constitution, as the definition of' sale' within the meaning of the said Act, also includes the transmission and supply of electricity outside the State. The appellant in the said writ petition also con­tended that in any case, the Government of Manipur, without framing the rules laying down the manner of levy and collection of tax on sale of electricity in Manipur, cannot levy any tax and realize the same, as sought to be done in the case in hand. The imposition of the pen­alty for non payment of the tax, as levied, has also been challenged on the same ground.

3. The respondent Nos. 1 and 2 contested the writ proceeding by filing affidavit-in-op-position contending inter alia that as the sale of electricity to different North Eastern States including the State of Manipur was completed within the territorial limit of the State of Manipur, the State Government is authorized to levy tax on sale of such electricity to the States other than the State of Manipur, as in the agreements entered into between the ap­pellant/writ petitioner and the respondent Nos.3 and 4, the delivery point for supply of energy to the bulk power customers is stipu­lated as 132 KV Bus Bar at Loktak Station in the State of Manipur. In the affidavit-in-opposition filed by the said respondents, it has also been contended that since the 1984 Act has been enacted for levy and collection of tax for sale of electricity in Manipur, if any portion of the definition of 'sale' under Sec­tion 2(g) of the Act is repugnant to the pre­amble of the Act, such portion is to be struck out and not the entire definition of' sale'. The said respondents, however, in the affidavit-in-opposition has admitted non framing of rules for lev