Electricity duty and related cesses are leviable only on the actual units of energy consumed by the end-user. Transmission and transformer losses occurring prior to the point of use cannot be included in the tax base, as taxing such losses would impermissibly shift the levy from consumption to supply.

JUDGMENT :

Sunil Beniwal, J.

1. These writ petitions have been filed by the petitioners with the following prayer :-

“(a)- That the impugned levy imposed under Section 3, 3-B & 3-C of the Act 1962 qua the Energy supplied by M/s. Tata Power Trading Co. Ltd. may be quashed;

(b)- That it may please be held that by conjoint reading & appreciation of the provisions of Rajasthan Electricity (Duty) Act 1962, and also of Electricity Act 2003, on the Energy supplied from outside the State of Rajasthan (from Tata Power Trading Co. Ltd. herein), the imposed impugned levy is not sustainable on the Electricity supplied, and the same can be leviable only on the Electricity consumed, and resultantly the impugned levy by the respondent no.3 is illegal, de-hors the legal provisions, and unconstitutional;

(c)- That the levy imposed on the basis of ABT Meters installed at Grid Sub-Station Dungarpur or at the Bay may be declared ultra-vires the provisions of the Act 2003, and the levy can only be sustained on the basis of ABT Meter installed in the premises of the industrial unit of petitioners herein as ABT Meter alone indicate the electricity consumed by the petitioner company’s industrial unit.

(d)- Any other order or direction which this Hon’ble Court deems just and proper may also be passed.”

2. For brevity, facts of DB CWP No.1665/2016 are considered. The petitioner is a company having its registered office at Udaipur and industrial operations at Dungarpur in the State of Rajasthan. The petitioner procures electricity from two sources, namely, Ajmer Vidyut Vitran Nigam Limited (hereinafter referred to as ‘AVVNL’) and Tata Power Trading Company Limited (hereinafter referred to as ‘TATA’) through open access under the provisions of the Electricity Act, 2003 (hereinafter referred to as ‘Act of 2003’).

2.1 The petitioner is being charged electricity duty, water conservation cess and urban cess under Sections 3, 3-B and 3-C of the Rajasthan Electricity (Duty) Act, 1962 (hereinafter referred to as ‘Act of 1962’), respectively. The said duty/cess is being levied qua the electricity purchased from AVVNL as well as TATA.

2.2 The units for the purpose of calculating the duty are being considered on th e basis of the readings of the meter installed at the Grid Sub-Station (hereinafter referred to as ‘GSS’).

2.3 The present writ petition has been filed, being aggrieved by the levy of duty/cess on the electricity purchased from TATA, on the ground that the same is supplied from outside the State of Rajasthan and, therefore, would not fall within the purview of the Act of 1962. Further, even if it is assumed that the Act of 1962 is applicable, the calculation of the said duty ought to be based on the units “consumed” by the petitioner rather than the units “supplied”. Thus, the reading of the meter installed at the petitioner’s industrial premises ought to be considered instead of the meter installed at the GSS.

3. Learned counsel for the petitioners made the following submissions:-

(i) The electricity procured from TATA through the Indian Energy Exchange does not fall within the ambit of supply by a “supplier” as defined under Section 2(h) of the Act of 1962. TATA is merely a trader licensed under Section 14 of the Act of 2003 by the Central Electricity Regulatory Commission and is not a licensee within the meaning of the statutory framework contemplated u