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1982 Supreme(MP) 294
High Court Of Madhya Pradesh
G. P. Singh, C. J. and Faizanuddin, J.
BIRLA JUTE MANUFACTURING CO.LTD. - Appellant
Versus
STATE OF MADHYA PRADESH - Respondents
Misc. Petn. 520 Of 1980
Decided On : 05/01/1982
I.C.GUPTA, K.K.VENUGOPAL, M.L.JAISWAL, M.V.TAMSKAR, Praveen Kumar
The rate of electricity duty for electrical energy consumed in a crushing unit located in a mining lease area is determined by the provisions of the Madhya Pradesh Electricity Duty Act, 1949, as amended by Act No. 21 of 1978, and the proper rate of duty in such cases is 3 paise per unit under Clause (2) of the Table in Section 3 of the Act.
Headnote:
ELECTRICITY DUTY - RATE OF DUTY - ELECTRICAL ENERGY CONSUMED IN CRUSHING UNIT LOCATED IN MINING LEASE AREA - PROPER RATE OF DUTY - MADHYA PRADESH ELECTRICITY DUTY ACT, 1949, SECTION 3, TABLE, CLAUSES (1) (A), (2) AND EXPLANATION (C).
Fact of the Case:
The petitioner, a cement manufacturing company, challenged the rate of electricity duty charged by the respondents for electrical energy consumed in a crushing unit located in its mining lease area. The petitioner contended that the proper rate of duty was 3 paise per unit under Clause (2) of the Table in Section 3 of the Madhya Pradesh Electricity Duty Act, 1949, as amended by Act No. 21 of 1978, while the respondents charged 12 paise per unit under Clause (1) (a) of the Table read with Explanation (b) (1).
Finding of the Court:
The court held that the proper rate of duty for electrical energy consumed in the crushing unit located in the mining lease area was 3 paise per unit under Clause (2) of the Table in Section 3 of the Madhya Pradesh Electricity Duty Act, 1949, as amended by Act No. 21 of 1978. The court found that the crushing of limestone Dhokas into gittis for being used for the manufacture of cement could not be described as a mining operation or a process ancillary to getting, dressing, or preparation for the sale of the mineral limestone within Section 2 (j) (x) of the Mines Act. Therefore, the court held that Clause (1) (a) of the Table read with Explanation (b) (1) could not be applied to the electrical energy consumed in the crushing unit in the mining lease area.
Issues: 1. Whether the proper rate of electricity duty for electrical energy consumed in the crushing unit located in the mining lease area was 3 paise per unit under Clause (2) of the Table in Section 3 of the Madhya Pradesh Electricity Duty Act, 1949, as amended by Act No. 21 of 1978, or 12 paise per unit under Clause (1) (a) of the Table read with Explanation (b) (1).
Ratio Decidendi: The court interpreted the provisions of the Madhya Pradesh Electricity Duty Act, 1949, as amended by Act No. 21 of 1978, and held that the purpose of Clause (2) of the Table in Section 3 was to provide a low rate of duty for electrical energy consumed in a factory or premises used for the purposes of industries that require raw materials for carrying on the manufacturing process and prepare finished goods for sale. The court found that the crushing unit in the mining lease area fell within the extended definition of a factory as contained in Explanation (c) of the Table and, therefore, the rate of duty applicable to the electrical energy consumed in the crushing unit was 3 paise per unit under Clause (2) of the Table.
Final Decision: The court allowed the petition and declared that the duty for electrical energy consumed from September 1978 in the crushing unit located in the mining lease area was payable at the rate of 3 paise per unit under Clause (2) of the Table in Section 3 of the Madhya Pradesh Electricity Duty Act, 1949, as amended by Act No. 21 of 1978. The court directed the State Government to refund the duty paid or recovered in excess of 3 paise per unit for the period from September 1978 up to date, with interest at 6% from the date of recovery till payment.
( 1 ) THE question raised in this petition under Article 226 of the Constitution relates to the proper rate of electricity duty chargeable in respect of electrical energy consumed by the petitioner in crushing limestone blocks into small fragments.
( 2 ) THE petitioner is a Public Limited Company. It owns inter alia a cement industry which is engaged in the activity of manufacturing and sale of cement in the name and style of M/s. Satna Cement Works. The petitioner's cement factory is situated at Satna in Madhva Pradesh. The petitioner uses limestone as raw material for manufacture of cement. The limestone so used is extracted from the limestone mines of the petitioner which are held under a lease granted to it by the State of Madhya Pradesh under the Mines and Minerals (Regulation and Develop ment) Act, 1957, as a major Mineral. The mining lease granted to the petitioner covers 10 square kilometers which can be used for the sole purpose of setting limestone as raw material for manufacture of cement in its cement factory. The petitioner has two crushing units for crushing limestone to manufacture cement. One crushing unit is in the factory premises and the other is instal led in the premises of the mining lease. The limestone blocks of uneven shapes known as Dhokas extracted from mines are crushed by the crushing units into small fragments called gittis. The gittis so obtained are used in the manufacture of cement in the factory of the petitioner.
( 3 ) THE petitioner consumes electricity for operating the crushing units. The petitioner has to pay electricity duty on the electrical energy consumed in the crushing units. The electrical energy consumed is partly produced by the petitioner and partly purchased in bulk from the Madhya Pradesh Electricity Board. The duty on electrical energy generated and consumed by the petitioner is paid directly to the State Government and the duty on electrical energy purchased from the Electricity Board is paid through the Board to the Government. The electricity duty is charged under the Madhya Pradesh Electricity Duty Act, 1949 as amended by the Madhya Pradesh Electricity Duty (Amendment) Act, 1978, (Act No. 21 of 1978 ). This amending Act which increased the rate of duty came into force on 1st October 1978. The petitioner has been, required to pay electricity duty in respect of electrical energy consumed in the crushing unit located in the mining lease area at the rate of 12 paise per unit from September 1978. The main contention of the petitioner in this petition is that the proper rate of duty under the Schedule in Section 3 of the Electricity Duty Act applicable for electrical energy consumed in the crushing unit located in the mining lease area is 3 paise per unit and not 12 paise per unit.
( 4 ) SECTION 3 of the Electricity Duty Act as substituted by the Amending Act of 1978, reads as follows: "3. Low of duty on sale or consumption of electrical energy : Subject to the exceptions specified in Section 3-A every distributor of electrical energy and every producer shall pay every month to the State Government at the prescribed time and in the prescribed manner a duty calculated at the rates specified in the Table below on the units of electrical energy sold or supplied to a consumer or consumed by himself for his own purposes or for purposes of his township or colony, during the preceding month. " The Table which is a part of Section 3 and which contains the rates of duty in so far as relevant reads as follows: TABLE rates of Duty
(1) Electrical energy sold or supplied for consumption in premises used. (a) for business, 8 paise per unit of energy trade or commercial up to 50 units of energy purposes or for sold or supplied in a purposes of month. professional pursuits other than for flour mills. 10 paise per unit for each additional unit sold or supplied in a month in excess of 50 units but hot in excess of 100 units of energy. 12 paise Per unit for each additional unit
