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2025 Supreme(Mad) 4719
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
K.R. SHRIRAM, CJ., V. LAKSHMINARAYANAN, J.
Super Sales India Ltd., Rep. By its Company Secretary - Petitioner
Versus
The President, Thappukundu Panchayat, Theni Panchayat Union, Theni and Ors. – Respondents
W.P.(MD) No.3789 of 2013 and M.P.(MD)No.1 of 2013
Decided On : 12-02-2025
For the Petitioner: Mr. Anirudh Krishnan, for M/s. Sarvabhauman Associates
For the Respondents: Mr. P. Thilak Kumar, Government Pleader.
Wind mills generating energy do not require construction permits under Section 160 of the Tamil Nadu Panchayat Act as they do not employ conventional power sources.
Headnote:(A) Tamil Nadu Panchayat Act, 1994 - Sections 160 and 172 - Permit requirements for wind mill construction - Court found that wind mills do not fall under the definition requiring permission under Section 160, as they do not employ steam, water, or mechanical power - Section 172 allows for house tax levied by the village Panchayat but did not validate the invalid notice served - Validity of notice quashed due to improper authority issuing it. (Paras 6, 10, 18, 28)
(B) Power Generation - Classification of wind mill installations - Court discussed that wind mills do not constitute a factory requiring licensing under local government regulations, affirming prior conflicting judgments on the authority required to permit such constructions. (Paras 7, 12, 23)
Facts of the case:
The petitioner, engaged in wind energy generation, contested a notice from local authorities demanding permits and taxes related to a wind mill construction, claiming inapplicability of the law regarding factories to their operation.
Findings of Court:
The court ruled that permission in accordance with Section 160 of the Act is unnecessary for wind mills, confirming only the requirement to pay house tax based on the existing structure.
Issues: The primary issues included the applicability of Section 160 of the Act to wind mill construction and the validity of the notice demanding permits and taxes.
Ratio Decidendi: The court established that wind mills, converting wind energy to electricity, do not utilize steam or other prescribed powers necessary for the application of Section 160.
Result: The impugned notice was quashed, allowing for recalculation of taxes.
| Table of Content |
|---|
| 1. petitioner's business and installation of wind mills. (Para 1 , 2) |
| 2. notice requirements and petitioner's response. (Para 3 , 4) |
| 3. validity of notice and authority issues. (Para 5 , 10 , 28) |
| 4. conflicting judgments on permission requirements. (Para 6 , 7 , 8 , 9 , 14) |
| 5. applicability of section 160 to wind mills. (Para 11 , 12 , 13 , 15 , 16 , 17 , 20 , 24) |
| 6. interpretation of manufacturing and machinery definitions. (Para 18 , 23) |
| 7. determination of what constitutes a 'house' for tax purposes. (Para 19 , 21 , 22 , 27) |
| 8. legal definition of house in tax context. (Para 25 , 26) |
| 9. final order and directions from the court. (Para 29 , 30 , 31) |
ORDER :
K.R. SHRIRAM, C.J.
1. The petitioner is engaged in the business of manufacture of yarn of various counts and gears for various industries and in the generation of energy from renewal and non-conventional sources such as wind energy. Petitioner decided to, in view of power shortage in State of Tamil Nadu at the relevant point of time, set up wind mills. The State Government also had supported permitting various measures for generation of power through non-conventional sources like wind mills. Petitioner had erected 69 wind mills in various villages in Tamil Nadu. One such mill is within the jurisdiction of 1st respondent village panchayat, namely, Thappukundu Panchayat, Theni District.
2. Petitioner purchased a piece of land admeasuring 2 acres and 22 cents pursuant to a registered sale deed. Petitioner submitted a proposal to Tamil Nadu Electricity Board (hereinafter referred to as 'TNEB') for installation of one number of 1500 KW wind electric generator. TNEB classified wind electric generation as Group II project. TNEB also permitted wind electric generator to be tied with board's 22 KV Grid. Based on the sanction from TNEB, petitioner installed and commissioned a 1500 KW capacity wind electric generator over the said land. Electricity generated has been wheeled through TNEB grid and being sold to TANGEDCO under power purchase agreement.
3. Out of the blue, on 18th July 2012, petitioner was served with a notice, stating that
(a) petitioner has to obtain necessary permission for construction of 'factory', as contemplated under Section 160 of the TAMIL NADU PANCHAYAT ACT , 1994 (hereinafter referred to as 'the Act');
(b) building plan sanction has to be obtained as per Tamil Nadu Panchayat Buildings Rules 1997 for installment of wind mill;
(c) building tax has to be paid for wind mills in terms of Section 2(1-A) of the Act; and
(d) payment of professional tax for operating wind mill.
4. On receipt of the notice, petitioner filed a reply on 4th August 2012, showing cause as to how it is not required to get any permission or consent as contended in the notice. Various grounds have been taken by petitioner and in particular, as to how Section 160 of the Act shall not apply at all.
5. Despite this reply, the 1st respondent issued a memorandum on 18th February 2013 by rejecting all contentions raised in the reply and threatening to take appropriate action, if petitioner failed to apply and obtain building sanction plan and pay building tax and professional tax etc. It is this memorandum, that is impugned in this petition.
6. We informed no formal order on admission had been ordered. As counter has been filed and the matter being old, with the consent of Counsel, we decided to hear petition finally. Therefore, issue rule and rule made returnable forthwith.
7. By way of history, we need to note that there was a judgment of Single Judge of this Court in S. Muppidathi Vs. Chief Engineer, Non- Conventional Energy Sources (NCES), Tamil Nadu Electricity Board, Chennai and others, 2012 (3) MLJ 6 , in which the Single Judge held that Section 160 of the Act is applicable to a wind mill, which generates electricity and therefore, a factory involved in a manufacturing process. This judgment was delivered on 17th November 2011.
8. On 19th June 2012, another Single Judge of this Court in Presiden
