The expression "in the generation or distribution of electric energy" in Section 5(2)(a)(iv) of the Punjab General Sales Tax Act, 1948, means that the goods supplied should be used in the very generation or distribution of electric energy itself and not merely in connection with the construction of a building or any part thereof which is used by the undertaking.

R.S.Narula, J.

1. In pursuance of the orders of Dulat and Pandit. JJ. dated September 12, 1963, in General Sales Tax cases Nos. 8 to 10 of 1960, the Financial Commissioner Punjab, has referred the following question to this Court under Sub-section (3) of Section 22 of the Punjab General Sales Tax Act (46 of 1948), hereinafter called the Act, --

"Whether on the facts and circumstances of this case, the sale of timber was for use in the generation or distribution of electrical energy within the meaning of Section 5(2)(a)(iv) of the Act?"

The facts giving rise to the above-quoted question and the steps leading to this reference are not only brief but are also beyond dispute. Messrs. Spedding Dinga Singh and Company of Pathankot, hereinafter referred to as the assessee, supplied timber to the Punjab Public Works Department -- Electricity Branch -- for construction of Kotla Power House during the period 1953 to 1956. Before the assessing authority under the Act, the assessee claimed that for arriving at the "taxable turnover" in respect of the assessment of the general sales-tax for the years 1953-54. 1954-55 and 1955-56, it was entitled to deduct therefrom the amount of the said sales of timber in exercise of the assessees right conferred on it by the following provision contained in Section 5(2) (a) (iv) of the Act --

"5(2). In this Act the expression taxable turnover means that part of a dealers gross turnover during any period which remains after deducting therefrom -- (a) his turnover during that period on -- * * * * *

(iv) sales to any undertaking supplying electrical energy to the public under a licence or sanction granted or deemed to have been granted under the Indian Electricity Act, 1910, of goods for use by it in the generation or distribution of such energy;

* * * * *"

It is the common case of both sides that if the supply of timber for the construction of the power-house or power-houses in dispute fell within Sub-clause (iv) of Clause (a) of Sub-section (2) of Section 5 of the Act, the assessee would be entitled to get the deduction in question. The decision of the assessing authority against the assessee in this respect was upheld in appeal by the Deputy Excise and Taxation Commissioner in respect of each of the three years. The three revision petitions filed by the assessee against the respective appellate orders were dismissed by one common judgment of the Excise and Taxation Commissioner dated January, 10. 1958. He held that the timber in question was supplied for preparation of shutters to be used for the constructions of Kotla Power House and, as such, the timber was supplied before the Kotla Power House started supplying the electric energy to the public. Not satisfied with the orders of the Commissioner, the assessee went up in further revision under Sub-section (3) of Section 21 of the Act to the Financial Commissioner in connection with all the three assessments in dispute. The Financial Commissioner (Revenue), Punjab, in his common order, dated January 15, 1960, recorded the following findings of fact --

(i) That the Punjab Public Works Department, Electricity Branch, to which timber in question had been supplied by the assessee, was an undertaking supplying electric energy to he public within the meaning of Section 2(5)(a)(iv);

(ii) that in respect of each of the sup-plies in question, the Public Works Department authorities had given separate declaration to the assessee certifying that the timber was used for the construction or in the allied works of the Kotla and Ganguwal Power Houses, which works were made to generate electricity; and

(iii) that the timber in question had been used for the construction of the power houses.

After recording the above findings, the learned Financial Commissioner proceeded to reject the revision petitions of the assessee with the following observations.

"A plain reading of Section 5(2)(a)(iv) of the East Punjab General Sales Tax Act, as quoted above, howeve