The main legal point established in the judgment is that the Kerala State Electricity Supply Surcharge Order, 1984, was ultra vires of the powers conferred under the Kerala Essential Articles Control Act, 1986, and constituted an unauthorized tax on electricity, leading to its declaration as unconstitutional and void.

1. The challenge in these writ petitions is to the validity of the Kerala State Electricity Supply (Kerala State Electricity Board and Licencees Areas) Surcharge Order, 1984.

2. The petitioners are either extra high tension or high tension consumers of electricity in this State, bound to pay the price of energy supplied to them by the Kerala State Electricity Board at the rates fixed by the Board from time to time. But, under the surcharge order issued by the Government, there is a levy of a surcharge at the rate of 2.5 paise per unit of electrical energy supplied, collected by the Board and remitted to the Government after retaining one per cent collection charge.

3. It is this levy that is challenged by the petitioners mainly on the ground that the surcharge that is levied is in substance a compulsory exaction intended to enrich the coffers of the State and in effect partakes the character of a tax on electricity and that the Government, acting as a delegate under the Kerala Essential Articles Control Act, 1986 (Act 13 of 1986) is not competent to impose any tax. In fact, it is contended, that the parent Act itself is no taxing measure, does not impose any tax and does not authorise the imposition of any tax.

4. The State Government and the Electricity Board, met this plea by contending that the surcharge levied only increases the price of energy, and is only an addition to the price structure and thus well within the powers conferred under S.3 (2) (b) and (e) of the Act.

5. The impugned order was issued on 24th October, 1984 in exercise of the powers conferred by S.3 of the Kerala Essential Articles Control Ordinance, 1984 (58 of 1984) and in supersession of an earlier surcharge order of 1979. The ordinance has been replaced by an Act, the Kerala Essential Articles Control Act, 1986, Act 13 of 1986, which has been given retrospective effect from 11th day of March, 1982. We shall, therefore, refer to the relevant provisions of this Act.

"3. Power to control production, supply distribution, etc., of essential articles-(1) If the Government are of opinion that it is necessary or expedient so to do for maintaining or increasing the supplies of any essential article or for securing their equitable distribution and availability at fair prices, they may, by notified order provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.

(2) Without prejudice to the generality of the powers conferred by sub-s. (1), an order made thereunder may provide

(a) xxxx

(b) for controlling the price at which any essential article may be bought or sold;

(c) xxxxxx

(d) xxxxx

(e) for requiring any person holding in stock any essential article to sell the whole or a specified part of the stock to the Government or to an officer or agent of the Government or to such other person or class of persons and in such circumstances as may be specified in the order:

xxx xxx

6. The relevant clause of the Surcharge Order of 1984 are extracted below:

1. (i) This order may be called the Kerala State Electricity Supply (Kerala State Electricity Board and Licensees Areas) Surcharge Order, 1984.

(ii) It shall apply to Extra High Tension and High Tension supplies of Electrical Energy by the Kerala State Electricity Board either directly or through licensees and shall include sales of energy by the Kerala State Electricity Board to sanction holders within the State as well as to other agencies outside Kerala.

(iii) It shall come into force in respect of consumption of electrical energy by each consumer including those in the Licensees Areas with effect from the 1st October, 1984.

3. Notwithstanding anything to the contrary contained in any agreement entered into with any consumer or the conditions of service agreed upon by the Kerala State Electricity Board, the Kerala State Electricity Board shall levy a surcharge in accordance with Clause.4 on all supplies of electrical energy made by it either directly or throu