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2010 Supreme(Ori) 855
IN THE HIGH COURT OF ORISSA
R.N. Biswal, B.P. Das, JJ.
INDIAN METALS AND FERRO ALLOYS LTD. AND ANOTHER - APPELLANT
Versus
STATE OF ORISSA AND ANOTHER - RESPONDENT
Writ Petition (C) Nos. 4202 and 13287 of 2004 and 5413 of 2005 in O.J.C. Nos. 966 of 2001 and 2682 of 2002
Decided On : 06-05-2010
The main legal point established in the judgment is the legislative competence of the State Legislature to impose electricity duty on consumption of electrical energy, the reasonableness of the notifications prescribing electricity duty, and the validity of the classification of consumers.
Headnote:
Electricity Duty - Challenge to Orissa Electricity Duty Act, 1961 - Sections 2, 3, and 5 - Summary of Acts and Sections
Fact of the Case:
Petitioners challenge the vires of the Orissa Electricity Duty Act, 1961, specifically Sections 2, 3, and 5, as well as the notifications prescribing payment of electricity duty. They argue that the duty is beyond the legislative competence of the State Legislature, discriminatory, and invalid due to excessive delegation of power.
Finding of the Court:
The Court found that the duty on consumption of electrical energy falls within the legislative competence of the State Legislature under Entry 53 of Schedule VII of the Constitution of India. It also held that the impugned notifications were valid and reasonable, and the classification of consumers was not in violation of any constitutional provision.
Issues: The issues involved the legislative competence of the State Legislature, the validity of the notifications prescribing electricity duty, and the classification of consumers.
Ratio Decidendi: The Court's decision was influenced by the interpretation of constitutional provisions, the reasonableness of the notifications, and the absence of violation of constitutional provisions in the classification of consumers.
Final Decision: The writ petitions were disposed of, and the interim orders of stay of realization of the amount were vacated. The Petitioners were directed to deposit the differential amount in the State Exchequer within four weeks.
JUDGMENT :
R.N. Biswali, J. - The facts and law involved in all the writ petitions being the same, albeit IMFA and NALCO raised some extra points of facts and laws, they are heard analogously and the following common judgment is passed thereon.
2. In all the writ petitions, the Petitioners, all of whom generate energy for their own consumption, challenge the vires of the Orissa Electricity Duty Act, 1961 (hereinafter referred to as 'the Act') in so far as Sections 2, 3 and 5 thereof are concerned. They also challenge the notification No. 7721-P-II-Ed.15/92 E wherein Electricity Duty was fixed ' 12 paise for a person not being licencee or board who generate such energy for his own use or consumption. They further challenged the Notification No. GRIDCO-ED-3/2001-18237, dated 10.10.2001 issued by State Government in their Department of Energy, wherein electricity duty was increased from 0.12 paise to 0.20 paise per unit. According to the Petitioners, the impugned impost is expressly on generation/production of electricity, which is beyond the scope and ambit of Entry 53, List-II of Schedule VII of the Constitution of India. In fact, it falls within the legislative field under Entry 84, List-I, Schedule-VII of the Constitution of India. The impost being beyond the legislative competence of the State Legislature, it is ab-initio void and non-est. The Petitioners, who do not consume electricity pursuant to any supply, are not liable to pay the duty imposed. Furthermore, the Petitioners being not consumers, as defined in Section 2(c) of the Act, they are not liable to pay the same. If Section 3(1) of the Act is zallowed to sustain, it would amount to be an uncanalized, unguided and uncontrolled delegation of power on the Executive. The Petitioners further question the validity of categorization of the consumers. The impugned enhancement is discriminatory, as it singles out the Petitioners, who generate electrical energy from their captive power plants for their own consumption. In terms of Section 3(ii) of the Act 1961, the impugned notification having not been laid before the State Legislature, it is wholly invalid in the eye of law. So, the Petitioners pray to declare Sections 2, 3 and 5 of the Act ultra vires; to quash the notifications dated 25.4.1992 and 10.10.2001 prescribing payment of electricity duty to be paid by them and the demand notice for deposit of Electricity Duty ' 0.20 paise and to direct the opp. parties to refund the excess amount of Electricity Duty paid and for consequential relief. It is the further prayer of ICCL to set aside the order dated 14.5.2004 rejecting their claim as licensee. Similarly NALCO has further prayed to strike out the words "so however, that such notifications shall be without prejudice to the validity of any electricity duty levied or collected under the notifications," from Section 3(ii) of the Act.
3. Opp. parties 1 and 2 in their joint counter affidavit contended that the impugned impost being on consumption of electrical energy, it is covered under Entry 53, List-II of Schedule VII of the Constitution as such the State Legislature is competent to legislate thereon. The Notification dated 25.4.1992 and 10.10.2001 prescribing payment of Electricity Duty by the Petitioners is most rational and reasonable. Similarly, situated units have been paying the enhanced electricity duty without any grumble. The Petitioners were paying Electricity Duty ' 6.12 paise per unit with effect from 25.4.1992. After long 10 years, it was enhanced to 0.20 paise. In the meantime, tax rate in the other Government Sectors has been increased manifold. In a welfare State, the revision in the rate of tax is inevitable to meet the increasing burden on the State Exchequer. In Central Government Undertakings like RSP, NTPC and State Government undertakings like OHPC and OPGC are paying Electricity Duty ' 0.20 paise per unit. It is the further case of the opp. parties that as per Section 3(1)(d) of 1961 Act, Electricity
