The State of Madhya Pradesh Vs. M/s. Birla Jute Manufacturing Co. Ltd.
EmailAppeal: Civil Appeal No. 5507 of 1995
(Arising out of S.L.P.(C) No.8870 of 1982)
(Arising out of S.L.P.(C) No.8870 of 1982)
Petitioner: The State of Madhya Pradesh
Respondent: M/s. Birla Jute Manufacturing Co. Ltd.
Apeal: Civil Appeal No. 5507 of 1995
(Arising out of S.L.P.(C) No.8870 of 1982)
(Arising out of S.L.P.(C) No.8870 of 1982)
Judges: KULDIP SINGH & N. VENKATACHALA, JJ.
Date of Judgment: May 10, 1995
Head Note:
ELECTRICITY SUPPLY
Madhya Pradesh Electricity Duty Act, 1949 :
Section 3 – Levy of duty on sale or consumption of electric energy – Ambit and applicability of – Whether the rate of duty payable on consumption of the electrical energy under the 1949 Act in premises to which the Mines Act, 1952 applied, was required to be calculated under Item (2) of the Table to section 3? – Held no – Mines Act made applicable to premises being at the mine site gets covered by Item (1) of the Table.
Held:
As seen from section 3 above, duty leviable thereunder and payable to the State Government every month on electrical energy sold or supplied or consumed during the preceding month is required to be calculated at the rate per unit specified in the Table given below that section. As per the Table, duty payable for the electrical energy sold or supplied for consumption varies from item to item, depending upon the purpose for which it is consumed. When Item (1) of the Table is seen, the rate of duty payable for electrical energy sold or supplied for consumption in a premises covers premises used for business, trade or commercial purposes or for purposes of professional persuits other than for flour mills. Because of the explanation (b) to the section which says that for the purpose of the section ‘premises used for business, trade, commercial purposes or for purpose of professional persuits’ shall include the premises used for the purpose of mines to which the Mines Act, 1952 applies, any premises in or adjacent to a mine which is used for processing the mineral extracted from the mine, becomes the premises covered under Item (1) of the Table. When Item (2) of the Table is seen, the rate of duty payable for electrical energy sold or supplied for consumption in a premises covers a factory, because of explanation (c) which says that for the purpose of the section factory not only means a factory registered under the Factories Act, 1948, but also includes a premises used for the purpose of industries which require raw materials for carrying on the manufacturing process and prepare finished goods for sale. When Item (3) of the Table is seen, it refers to the rate of duty payable on electrical energy sold or supplied for purposes of illumination on the occasion of marriages or other social functions. When Item (4) of the Table is seen, it refers to the rate of duty payable for electrical energy sold or supplied for consumption in a township or colony attached to a factory, mine, or institution or a premises getting supply at high voltage or extra high voltage but not covered under Items (1) and (2) of the Table. The rates fixed in respect of electrical energy sold or supplied for consumption in a premises covered by Item (4) cannot be regarded as a premises covered by Item (1) or Item (2) of the Table because of the specific exclusion of those items, as mentioned in Item (4) itself. As seen from Item (5) of the Table, the rate of duty payable for electrical energy sold or supplied for premises or purposes covered thereunder cannot apply to premises or purposes covered in Items (1) to (4) of the Table because of their specific exclusion as mentioned thereunder. When the rates of duty leviable under various items in the Table are seen, each of them applies, according to the purpose for which electrical energy is sold or consumed. Then, comes the proviso to the Table which declares that the electrical energy sold or supplied for consumption for any one purpose is used either wholly or partly, without the consent of the distributor of energy or producer of electricity, as the case may be, for consumption for any other purpose for which a higher rate of duty is chargeable, the entire energy sold or supplied shall be charged at the highest rate applicable. This, proviso, therefore, expressly states that the rates of duty leviable for electrical energy consumed by premises or purpose covered by more than one item, it is the highest rate fixed under them which is leviable where the consumer of electrical energy does not obtain the consent from the distributor of electrical energy or producer of electricity for change in such user. Hence, according to the proviso if consent is obtained by the consumer of electrical energy from the distributor of energy or producer of electricity for using electrical energy in a premises of a factory covered by Item (2) it cannot be used for premises covered under Item (1) and if such thing is done without obtaining such consent, instead of lower duty payable for a premises covered under Item (2), higher duty for a premises covered under Item (1) becomes payable. In other words, proviso to the Table requires that a consumer of electrical energy must declare before such consumption as to the purpose for which it would be consumed in the sense whether it would be consumed for the purpose covered under Item (1) or Item (2) or Item (3) or Item (4) or Item (5) of the Table. The requirement of the proviso when is understood in the context of the provisions under different items, the purpose for which electrical energy is consumed, if falls under more than one item, the rate at which duty becomes leviable would be of the item for which highest rate of duty is fixed.
No doubt, as we have already pointed out a factory under clause (c) to the explanation to section 3 since includes premises used for purposes of industries which require raw materials for carrying on the manufacturing process and prepare finished goods for sale, the premises of M/s. Birla Ltd. at the mines head of their lime-stone mines of the State of Madhya Pradesh where lime-stone boulders – ‘dhokas’ extracted from the mines are broken into small pieces, i.e., ‘gittis’ for being used in their cement factory or factory requiring raw-material for carrying on the manufacturing process and prepare finished goods of cement for sale, falls within the description of premises covered by Item (2) of the Table to section 3 of the 1949 Act. But the question is when such premises also falls within the description of premises covered by Item (1) because of clause (b)(1) to the Explanation whether the duty payable for electrical energy used therein could only be what is payable for premises under Item (2) of Table to section 3. Since a premises for which Mines Act is made applicable becomes a premises covered by Item (1) of Table to section 3 of the 1949 Act which provides for highest rate of duty leviable for electrical energy consumed in such premises question of leviability of lower duty for such consumption merely because of that premises answering the description of premises in other item of the Table respecting which lower duty is leviable can never arise, for as we have pointed out already, when once highest rate under an item is leviable, lower rate leviable under other items is excluded. It is, therefore, our considered view that premises covered by Item (1) to the Table to which Mines Act is made applicable being the premises of M/s. Birla Ltd. at their mines-site gets covered by Item (1) of Table and hence the duty payable for consumption of electrical energy in that premises shall be at the rate payable for the premises covered under Item (1) of the Table to section 3 of the 1949 Act.
Hence, the view taken by the High Court in the judgment and order under appeal that the premises of M/s. Birla Ltd. at the mines site being a factory premises covered by Item (2) of the Table to section 3 of the 1949 Act the payment of duty leviable in respect of electrical energy consumed in that premises is covered by Item (2) of the Table, becomes unsustainable and calls to be interfered with. (Para 8, 10 and 11)
Cases Reffered:
1. Govt. of A.P. v. HMT, 1975 (Supp.) SCR 394. (Para 13)
JUDGEMENT:
VENKATACHALA, J. :
1. Special leave sought for in S.L.P. No. 8870 of 1982 is granted.
2. The State of Madhya Pradesh, its Electrical Adviser and Regional Accounts Officer of the Madhya Pradesh Electricity Board, have filed the above Civil Appeal under Article 136 of the Constitution of India, impugning a Division Bench judgment and order dated May 1, 1982 of the High Court of Madhya Pradesh in Misc. Writ Petition No. 520/80 wherein it has been held that the rate of duty payable on consumption of the electrical energy under the Madhya Pradesh Electricity Duty Act, 1949 – “the 1949 Act” in premises of M/s. Birla Jute Manufacturing Company Limited – “M/s. Birla Ltd.” to which the Mines Act, 1952 – “the Mines Act” applied, was required to be calculated under Item (2) and not Item (1) of Table to section 3 of the 1949 Act.
3. M/s. Birla Ltd. and its Director, Shri M.M. Gadodia, have filed the above Writ Petition under Article 32 of the Constitution of India, impugning the constitutionality of the Madhya Pradesh Electricity Duty (Amendment and Validation) Act, 1984 – “the Validation Act” which amended certain provisions of the 1949 Act, validating duty levied on consumption of electrical energy imposed under the 1949 Act in respect of premises to which the Mines Act applied. Since questions arising for our consideration and decision in the Civil Appeal and the Writ Petition relate to sustainability of levy imposed under the 1949 Act on electrical energy consumed in a premises to which the Mines Act applied, they could be disposed of together.
4. Facts which are material for a proper consideration of the questions arising for our decision in the said appeal and writ petition, could be stated thus :
M/s. Birla Ltd. has set up several industries all over the country for the manufacture and sale of consumable goods. One of such industries set up by M/s. Birla Ltd. is M/s. Satna Cement Works with lime-stone mines at one place and a cement factory at another place, in the State of Madhya Pradesh. Huge lime-stone boulders extracted from the mines known as ‘dhokas’ are broken into small sized lime-stones known as ‘gittis’for being used as raw-material for manufacture of cement in the cement factory by a lime-stone crusher erected in a premises located at the mines-head of lime-stone mines to which the Mines Act applies. For the electrical energy consumed by the lime-stone crusher in that premises at mines-head during the year 1979 – 1980, the Government of Madhya Pradesh levied duty under section 3 of the 1949 Act at a rate calculated under Item (1) of Table below that section and raised demands thereon, against M/s. Birla Ltd. Such levies and demands were refuted by M/s. Birla Ltd. by contending that it was liable for levy of duty on electrical energy consumed for breaking ‘dhokas’ into ‘gittis’ by the lime-stone crusher in the premises at mines-head only at a rate calculated in Item (2) of Table to section 3 of the 1949 Act, notwithstanding the applicability of the Mines Act to the said premises, in that that premises had to be regarded as a factory for fixing the rate of duty payable on electrical energy consumed therein because of inclusive meaning of factory given in Explanation (c) to section 3 of the 1949 Act itself. Since the Government of Madhya Pradesh persisted in its demands made against M/s. Birla Ltd., the latter filed a Writ Petition, Misc. W.P. No. 520 of 1980 in the Madhya Pradesh High Court challenging the said levies and demands. A Division Bench of the High Court taking the aid of Explanation (c) to section 3 of the 1949 Act, quashed the levies and demands challenged by M/s. Birla Ltd., by upholding the contention that its liability to pay duty was only at the rate calculated under clause (2) of Table to section 3 of the 1949 Act, by its judgment and order dated May 1, 1982 rendered in that writ petition. It is the correctness of that judgment and order which has been under challenge in the present appeal filed by the State of Madhya Pradesh, its Electrical Adviser and Regional Accounts Officer of the Madhya Pradesh Electricity Board.
5. While, the correctness of the said judgment and order of the High Court in the present appeal was pending consideration and decision by this Court, the State of Madhya Pradesh enacted and brought into force the aforesaid Validation Act. What has been impugned in the present writ petition by M/s. Birla Ltd. is the constitutional validity of that Validation Act.
6. We have heard learned counsel for the contesting parties in the appeal as well as the writ petition. We have been taken through the judgment of the High Court under appeal and the relevant provisions of the 1949 Act and the Validation Act. Whether the duty leviable on consumption of electrical energy by M/s. Birla Ltd. under section 3 of the 1949 Act in their premises to which the Mines Act applies is at the rate specified in Item (1) or Item (2) of the Table given below that section being the main question which needs to be answered by us in deciding the present appeal and the writ petition, we shall proceed to find the answer therefor, at the first instance.
7. Since the answer to the said question has necessarily to depend on a proper construction to be placed by us on section 3 of the 1949 Act, as a whole, as to its ambit and application, it could be reproduced for the sake of easy reference and proper examination, thus:
“3. Levy of duty on sale of consumption of electric 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 :-
TABLE
Rate of Duty
(1) Electrical energy
sold or supplied
for consumption
in premises used –
(a) for business, 8 paise per unit of
trade or commercial energy upto 50 units
purposes or for of energy sold or
purposes of professional supplied in a month.
persuits 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 not in excess
of 100 units of energy.
12 paise per unit for
each additional unit
sold or supplied in a
month in excess of 100 units of energy.
(b) for flour mills 2 paise per unit of
energy.
(2) Electrical energy 2 paise per unit of
sold or supplied for energy.
consumption in premises
of a factory excluding
energy supplied
for consumption for
domestic or non-
factory purposes where
the connected load
(a) does not exceed 1.5 paise per unit
100 H.P. energy.
(b) exceeds 100 H.P. 3 paise per unit of
energy
(3).Electrical energy 65 paise per unit of
sold or supplied for energy upto 50 units of
purposes of illumination energy sold or supplied
on the occasion on any one occasion.
sion of marriages
or other social
functions.
Re.1 per unit for each
additional unit sold or
supplied on any one
occasion in excess of
50 units but not in
excess of 100 units of
energy.
Rs.2.50 paise per unit
for each additional unit
sold or supplied on any
one occasion in excess of
100 units of energy.
(4).Electrical energy 10 paise per unit of
sold or supplied for energy.
consumption in –
(a) a township or colony
attached to a factory,
mine, or institution;
or
(b) a premises getting
supply at high voltage
or extra high voltage
but not covered under
items (1) and (2) in
above.
(5).Electrical energy 6.5 paise per unit of
sold or supplied for energy upto 50 units
consumption in premses of energy sold or
and for purposes supplied in a month.
not covered under
items (1) to (4) above.
7 paise per unit for
each additional unit
sold or supplied in a
month in excess of 50
units but not in excess
of 150 units of energy.
12 paise per unit for
each additional unit
sold or supplied in a
month in excess of 150
units of energy.
Provided that if the electrical energy sold or supplied for consumption for any one purpose is used either wholly or partly, without the consent of the distributor of energy or producer or electricity, as the case may be, for consumption for any other purpose for which a higher rate of duty is chargeable, the entire energy sold or supplied shall be charged at the highest rate applicable.
Explanation – For the purpose of this section –
(a) ‘Month’ means such period as may be prescribed and till such period is prescribed, the filing month;
(b) Premises used for business, trade, commercial purposes or for purpose of professional persuits shall include the premises used –
(1) for the purposes of mines to which Mines Act, 1952 (No.35 of 1952) applies;
(2) for the purposes of industries which do not require raw materials for carrying on the industries but which are carried on for rendering services such as flour mill, repairs workshop and the like and are not registered as factories under the Factories Act, 1948 (No.63 of 1948);
(c) ‘Factory’ means a factory registered under the Factories Act, 1948 (No.67 of 1948); and includes premises used for the purposes of Industries which require raw materials for carrying on the manufacturing process and prepare finished goods for sale.”
8. As seen from section 3 above, duty leviable thereunder and payable to the State Government every month on electrical energy sold or supplied or consumed during the preceding month is required to be calculated at the rate per unit specified in the Table given below that section. As per the Table, duty payable for the electrical energy sold or supplied for consumption varies from item to item, depending upon the purpose for which it is consumed. When Item (1) of the Table is seen, the rate of duty payable for electrical energy sold or supplied for consumption in a premises covers premises used for business, trade or commercial purposes or for purposes of professional persuits other than for flour mills. Because of the explanation (b) to the section which says that for the purpose of the section ‘premises used for business, trade, commercial purposes or for purpose of professional persuits’ shall include the premises used for the purpose of mines to which the Mines Act, 1952 applies, any premises in or adjacent to a mine which is used for processing the mineral extracted from the mine, becomes the premises covered under Item (1) of the Table. When Item (2) of the Table is seen, the rate of duty payable for electrical energy sold or supplied for consumption in a premises covers a factory, because of explanation (c) which says that for the purpose of the section factory not only means a factory registered under the Factories Act, 1948, but also includes a premises used for the purpose of industries which require raw materials for carrying on the manufacturing process and prepare finished goods for sale. When Item (3) of the Table is seen, it refers to the rate of duty payable on electrical energy sold or supplied for purposes of illumination on the occasion of marriages or other social functions. When Item (4) of the Table is seen, it refers to the rate of duty payable for electrical energy sold or supplied for consumption in a township or colony attached to a factory, mine, or institution or a premises getting supply at high voltage or extra high voltage but not covered under Items (1) and (2) of the Table. The rates fixed in respect of electrical energy sold or supplied for consumption in a premises covered by Item (4) cannot be regarded as a premises covered by Item (1) or Item (2) of the Table because of the specific exclusion of those items, as mentioned in Item (4) itself. As seen from Item (5) of the Table, the rate of duty payable for electrical energy sold or supplied for premises or purposes covered thereunder cannot apply to premises or purposes covered in Items (1) to (4) of the Table because of their specific exclusion as mentioned thereunder. When the rates of duty leviable under various items in the Table are seen, each of them applies, according to the purpose for which electrical energy is sold or consumed. Then, comes the proviso to the Table which declares that the electrical energy sold or supplied for consumption for any one purpose is used either wholly or partly, without the consent of the distributor of energy or producer of electricity, as the case may be, for consumption for any other purpose for which a higher rate of duty is chargeable, the entire energy sold or supplied shall be charged at the highest rate applicable. This, proviso, therefore, expressly states that the rates of duty leviable for electrical energy consumed by premises or purpose covered by more than one item, it is the highest rate fixed under them which is leviable where the consumer of electrical energy does not obtain the consent from the distributor of electrical energy or producer of electricity for change in such user. Hence, according to the proviso if consent is obtained by the consumer of electrical energy from the distributor of energy or producer of electricity for using electrical energy in a premises of a factory covered by Item (2) it cannot be used for premises covered under Item (1) and if such thing is done without obtaining such consent, instead of lower duty payable for a premises covered under Item (2), higher duty for a premises covered under Item (1) becomes payable. In other words, proviso to the Table requires that a consumer of electrical energy must declare before such consumption as to the purpose for which it would be consumed in the sense whether it would be consumed for the purpose covered under Item (1) or Item (2) or Item (3) or Item (4) or Item (5) of the Table. The requirement of the proviso when is understood in the context of the provisions under different items, the purpose for which electrical energy is consumed, if falls under more than one item, the rate at which duty becomes leviable would be of the item for which highest rate of duty is fixed.
9. If regard is had to the aforesaid analysis of section 3, its Table and explanation, as to their ambit and applicability, can it be held that the rate of duty payable for electrical energy consumed in premises covered by Item (2) of Table to section 3 of the 1949 Act is the rate provided for thereunder, even where for such premises (factory), the Mines Act is made applicable, is the question.
10. No doubt, as we have already pointed out a factory under clause (c) to the explanation to section 3 since includes premises used for purposes of industries which require raw materials for carrying on the manufacturing process and prepare finished goods for sale, the premises of M/s. Birla Ltd. at the mines head of their lime-stone mines of the State of Madhya Pradesh where lime-stone boulders – ‘dhokas’ extracted from the mines are broken into small pieces, i.e., ‘gittis’ for being used in their cement factory or factory requiring raw-material for carrying on the manufacturing process and prepare finished goods of cement for sale, falls within the description of premises covered by Item (2) of the Table to section 3 of the 1949 Act. But the question is when such premises also falls within the description of premises covered by Item (1) because of clause (b)(1) to the Explanation whether the duty payable for electrical energy used therein could only be what is payable for premises under Item (2) of Table to section 3. Since a premises for which Mines Act is made applicable becomes a premises covered by Item (1) of Table to section 3 of the 1949 Act which provides for highest rate of duty leviable for electrical energy consumed in such premises question of leviability of lower duty for such consumption merely because of that premises answering the description of premises in other item of the Table respecting which lower duty is leviable can never arise, for as we have pointed out already, when once highest rate under an item is leviable, lower rate leviable under other items is excluded. It is, therefore, our considered view that premises covered by Item (1) to the Table to which Mines Act is made applicable being the premises of M/s. Birla Ltd. at their mines-site gets covered by Item (1) of Table and hence the duty payable for consumption of electrical energy in that premises shall be at the rate payable for the premises covered under Item (1) of the Table to section 3 of the 1949 Act.
11. Hence, the view taken by the High Court in the judgment and order under appeal that the premises of M/s. Birla Ltd. at the mines site being a factory premises covered by Item (2) of the Table to section 3 of the 1949 Act the payment of duty leviable in respect of electrical energy consumed in that premises is covered by Item (2) of the Table, becomes unsustainable and calls to be interfered with.
12. The next question which arises for our consideration is as to sustainability of the provisions in the Validation Act which validate the levy of duty imposed under Item (1) to the Table to section 3 of the 1949 Act in respect of electrical energy consumed in the premises of M/s. Birla Ltd. at their mines site to which Mines Act is applicable under the 1949 Act and in respect of similar premises of other persons or companies to which Mines Act is applicable.
13. Although learned counsel for the petitioners for the writ petitions sought to question the provisions of the Validation Act which purport to retrospective validate levy of duty on electrical energy consumed in their premises under the 1949 Act because of the view taken of section 3 of the 1949 Act by the High Court in its judgment and order under the present appeal, the learned counsel for the State of Madhya Pradesh sought to support the sustainability of the Validation Act placing reliance on the decision of this Court in Govt. of A.P. v. H.M.T. (1975) Suppl. S.C.R. 394, where this Court had upheld the provisions of a Validation Act by which duty made payable in respect of a building premises retrospectively. Prima facie, the decision of this Court appears to support the stand of learned counsel for the State. But, when the judgment and order of the High Court under the present appeal, which is sought to be made ineffective by the Validation Act, is held to be unsustainable by us in the present appeal, we find it unnecessary, to examine the constitutionality of the Validation Act.
14. In the result, we not merely allow this civil appeal, set aside the judgment and order of the High Court in W.P. No. 520 of 1980 (reported in AIR 1982 MP 225) appealed against and dismiss that writ petition, but also dismiss the writ petition filed in this Court. No costs.
1. Special leave sought for in S.L.P. No. 8870 of 1982 is granted.
2. The State of Madhya Pradesh, its Electrical Adviser and Regional Accounts Officer of the Madhya Pradesh Electricity Board, have filed the above Civil Appeal under Article 136 of the Constitution of India, impugning a Division Bench judgment and order dated May 1, 1982 of the High Court of Madhya Pradesh in Misc. Writ Petition No. 520/80 wherein it has been held that the rate of duty payable on consumption of the electrical energy under the Madhya Pradesh Electricity Duty Act, 1949 – “the 1949 Act” in premises of M/s. Birla Jute Manufacturing Company Limited – “M/s. Birla Ltd.” to which the Mines Act, 1952 – “the Mines Act” applied, was required to be calculated under Item (2) and not Item (1) of Table to section 3 of the 1949 Act.
3. M/s. Birla Ltd. and its Director, Shri M.M. Gadodia, have filed the above Writ Petition under Article 32 of the Constitution of India, impugning the constitutionality of the Madhya Pradesh Electricity Duty (Amendment and Validation) Act, 1984 – “the Validation Act” which amended certain provisions of the 1949 Act, validating duty levied on consumption of electrical energy imposed under the 1949 Act in respect of premises to which the Mines Act applied. Since questions arising for our consideration and decision in the Civil Appeal and the Writ Petition relate to sustainability of levy imposed under the 1949 Act on electrical energy consumed in a premises to which the Mines Act applied, they could be disposed of together.
4. Facts which are material for a proper consideration of the questions arising for our decision in the said appeal and writ petition, could be stated thus :
M/s. Birla Ltd. has set up several industries all over the country for the manufacture and sale of consumable goods. One of such industries set up by M/s. Birla Ltd. is M/s. Satna Cement Works with lime-stone mines at one place and a cement factory at another place, in the State of Madhya Pradesh. Huge lime-stone boulders extracted from the mines known as ‘dhokas’ are broken into small sized lime-stones known as ‘gittis’for being used as raw-material for manufacture of cement in the cement factory by a lime-stone crusher erected in a premises located at the mines-head of lime-stone mines to which the Mines Act applies. For the electrical energy consumed by the lime-stone crusher in that premises at mines-head during the year 1979 – 1980, the Government of Madhya Pradesh levied duty under section 3 of the 1949 Act at a rate calculated under Item (1) of Table below that section and raised demands thereon, against M/s. Birla Ltd. Such levies and demands were refuted by M/s. Birla Ltd. by contending that it was liable for levy of duty on electrical energy consumed for breaking ‘dhokas’ into ‘gittis’ by the lime-stone crusher in the premises at mines-head only at a rate calculated in Item (2) of Table to section 3 of the 1949 Act, notwithstanding the applicability of the Mines Act to the said premises, in that that premises had to be regarded as a factory for fixing the rate of duty payable on electrical energy consumed therein because of inclusive meaning of factory given in Explanation (c) to section 3 of the 1949 Act itself. Since the Government of Madhya Pradesh persisted in its demands made against M/s. Birla Ltd., the latter filed a Writ Petition, Misc. W.P. No. 520 of 1980 in the Madhya Pradesh High Court challenging the said levies and demands. A Division Bench of the High Court taking the aid of Explanation (c) to section 3 of the 1949 Act, quashed the levies and demands challenged by M/s. Birla Ltd., by upholding the contention that its liability to pay duty was only at the rate calculated under clause (2) of Table to section 3 of the 1949 Act, by its judgment and order dated May 1, 1982 rendered in that writ petition. It is the correctness of that judgment and order which has been under challenge in the present appeal filed by the State of Madhya Pradesh, its Electrical Adviser and Regional Accounts Officer of the Madhya Pradesh Electricity Board.
5. While, the correctness of the said judgment and order of the High Court in the present appeal was pending consideration and decision by this Court, the State of Madhya Pradesh enacted and brought into force the aforesaid Validation Act. What has been impugned in the present writ petition by M/s. Birla Ltd. is the constitutional validity of that Validation Act.
6. We have heard learned counsel for the contesting parties in the appeal as well as the writ petition. We have been taken through the judgment of the High Court under appeal and the relevant provisions of the 1949 Act and the Validation Act. Whether the duty leviable on consumption of electrical energy by M/s. Birla Ltd. under section 3 of the 1949 Act in their premises to which the Mines Act applies is at the rate specified in Item (1) or Item (2) of the Table given below that section being the main question which needs to be answered by us in deciding the present appeal and the writ petition, we shall proceed to find the answer therefor, at the first instance.
7. Since the answer to the said question has necessarily to depend on a proper construction to be placed by us on section 3 of the 1949 Act, as a whole, as to its ambit and application, it could be reproduced for the sake of easy reference and proper examination, thus:
“3. Levy of duty on sale of consumption of electric 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 :-
TABLE
Rate of Duty
(1) Electrical energy
sold or supplied
for consumption
in premises used –
(a) for business, 8 paise per unit of
trade or commercial energy upto 50 units
purposes or for of energy sold or
purposes of professional supplied in a month.
persuits 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 not in excess
of 100 units of energy.
12 paise per unit for
each additional unit
sold or supplied in a
month in excess of 100 units of energy.
(b) for flour mills 2 paise per unit of
energy.
(2) Electrical energy 2 paise per unit of
sold or supplied for energy.
consumption in premises
of a factory excluding
energy supplied
for consumption for
domestic or non-
factory purposes where
the connected load
(a) does not exceed 1.5 paise per unit
100 H.P. energy.
(b) exceeds 100 H.P. 3 paise per unit of
energy
(3).Electrical energy 65 paise per unit of
sold or supplied for energy upto 50 units of
purposes of illumination energy sold or supplied
on the occasion on any one occasion.
sion of marriages
or other social
functions.
Re.1 per unit for each
additional unit sold or
supplied on any one
occasion in excess of
50 units but not in
excess of 100 units of
energy.
Rs.2.50 paise per unit
for each additional unit
sold or supplied on any
one occasion in excess of
100 units of energy.
(4).Electrical energy 10 paise per unit of
sold or supplied for energy.
consumption in –
(a) a township or colony
attached to a factory,
mine, or institution;
or
(b) a premises getting
supply at high voltage
or extra high voltage
but not covered under
items (1) and (2) in
above.
(5).Electrical energy 6.5 paise per unit of
sold or supplied for energy upto 50 units
consumption in premses of energy sold or
and for purposes supplied in a month.
not covered under
items (1) to (4) above.
7 paise per unit for
each additional unit
sold or supplied in a
month in excess of 50
units but not in excess
of 150 units of energy.
12 paise per unit for
each additional unit
sold or supplied in a
month in excess of 150
units of energy.
Provided that if the electrical energy sold or supplied for consumption for any one purpose is used either wholly or partly, without the consent of the distributor of energy or producer or electricity, as the case may be, for consumption for any other purpose for which a higher rate of duty is chargeable, the entire energy sold or supplied shall be charged at the highest rate applicable.
Explanation – For the purpose of this section –
(a) ‘Month’ means such period as may be prescribed and till such period is prescribed, the filing month;
(b) Premises used for business, trade, commercial purposes or for purpose of professional persuits shall include the premises used –
(1) for the purposes of mines to which Mines Act, 1952 (No.35 of 1952) applies;
(2) for the purposes of industries which do not require raw materials for carrying on the industries but which are carried on for rendering services such as flour mill, repairs workshop and the like and are not registered as factories under the Factories Act, 1948 (No.63 of 1948);
(c) ‘Factory’ means a factory registered under the Factories Act, 1948 (No.67 of 1948); and includes premises used for the purposes of Industries which require raw materials for carrying on the manufacturing process and prepare finished goods for sale.”
8. As seen from section 3 above, duty leviable thereunder and payable to the State Government every month on electrical energy sold or supplied or consumed during the preceding month is required to be calculated at the rate per unit specified in the Table given below that section. As per the Table, duty payable for the electrical energy sold or supplied for consumption varies from item to item, depending upon the purpose for which it is consumed. When Item (1) of the Table is seen, the rate of duty payable for electrical energy sold or supplied for consumption in a premises covers premises used for business, trade or commercial purposes or for purposes of professional persuits other than for flour mills. Because of the explanation (b) to the section which says that for the purpose of the section ‘premises used for business, trade, commercial purposes or for purpose of professional persuits’ shall include the premises used for the purpose of mines to which the Mines Act, 1952 applies, any premises in or adjacent to a mine which is used for processing the mineral extracted from the mine, becomes the premises covered under Item (1) of the Table. When Item (2) of the Table is seen, the rate of duty payable for electrical energy sold or supplied for consumption in a premises covers a factory, because of explanation (c) which says that for the purpose of the section factory not only means a factory registered under the Factories Act, 1948, but also includes a premises used for the purpose of industries which require raw materials for carrying on the manufacturing process and prepare finished goods for sale. When Item (3) of the Table is seen, it refers to the rate of duty payable on electrical energy sold or supplied for purposes of illumination on the occasion of marriages or other social functions. When Item (4) of the Table is seen, it refers to the rate of duty payable for electrical energy sold or supplied for consumption in a township or colony attached to a factory, mine, or institution or a premises getting supply at high voltage or extra high voltage but not covered under Items (1) and (2) of the Table. The rates fixed in respect of electrical energy sold or supplied for consumption in a premises covered by Item (4) cannot be regarded as a premises covered by Item (1) or Item (2) of the Table because of the specific exclusion of those items, as mentioned in Item (4) itself. As seen from Item (5) of the Table, the rate of duty payable for electrical energy sold or supplied for premises or purposes covered thereunder cannot apply to premises or purposes covered in Items (1) to (4) of the Table because of their specific exclusion as mentioned thereunder. When the rates of duty leviable under various items in the Table are seen, each of them applies, according to the purpose for which electrical energy is sold or consumed. Then, comes the proviso to the Table which declares that the electrical energy sold or supplied for consumption for any one purpose is used either wholly or partly, without the consent of the distributor of energy or producer of electricity, as the case may be, for consumption for any other purpose for which a higher rate of duty is chargeable, the entire energy sold or supplied shall be charged at the highest rate applicable. This, proviso, therefore, expressly states that the rates of duty leviable for electrical energy consumed by premises or purpose covered by more than one item, it is the highest rate fixed under them which is leviable where the consumer of electrical energy does not obtain the consent from the distributor of electrical energy or producer of electricity for change in such user. Hence, according to the proviso if consent is obtained by the consumer of electrical energy from the distributor of energy or producer of electricity for using electrical energy in a premises of a factory covered by Item (2) it cannot be used for premises covered under Item (1) and if such thing is done without obtaining such consent, instead of lower duty payable for a premises covered under Item (2), higher duty for a premises covered under Item (1) becomes payable. In other words, proviso to the Table requires that a consumer of electrical energy must declare before such consumption as to the purpose for which it would be consumed in the sense whether it would be consumed for the purpose covered under Item (1) or Item (2) or Item (3) or Item (4) or Item (5) of the Table. The requirement of the proviso when is understood in the context of the provisions under different items, the purpose for which electrical energy is consumed, if falls under more than one item, the rate at which duty becomes leviable would be of the item for which highest rate of duty is fixed.
9. If regard is had to the aforesaid analysis of section 3, its Table and explanation, as to their ambit and applicability, can it be held that the rate of duty payable for electrical energy consumed in premises covered by Item (2) of Table to section 3 of the 1949 Act is the rate provided for thereunder, even where for such premises (factory), the Mines Act is made applicable, is the question.
10. No doubt, as we have already pointed out a factory under clause (c) to the explanation to section 3 since includes premises used for purposes of industries which require raw materials for carrying on the manufacturing process and prepare finished goods for sale, the premises of M/s. Birla Ltd. at the mines head of their lime-stone mines of the State of Madhya Pradesh where lime-stone boulders – ‘dhokas’ extracted from the mines are broken into small pieces, i.e., ‘gittis’ for being used in their cement factory or factory requiring raw-material for carrying on the manufacturing process and prepare finished goods of cement for sale, falls within the description of premises covered by Item (2) of the Table to section 3 of the 1949 Act. But the question is when such premises also falls within the description of premises covered by Item (1) because of clause (b)(1) to the Explanation whether the duty payable for electrical energy used therein could only be what is payable for premises under Item (2) of Table to section 3. Since a premises for which Mines Act is made applicable becomes a premises covered by Item (1) of Table to section 3 of the 1949 Act which provides for highest rate of duty leviable for electrical energy consumed in such premises question of leviability of lower duty for such consumption merely because of that premises answering the description of premises in other item of the Table respecting which lower duty is leviable can never arise, for as we have pointed out already, when once highest rate under an item is leviable, lower rate leviable under other items is excluded. It is, therefore, our considered view that premises covered by Item (1) to the Table to which Mines Act is made applicable being the premises of M/s. Birla Ltd. at their mines-site gets covered by Item (1) of Table and hence the duty payable for consumption of electrical energy in that premises shall be at the rate payable for the premises covered under Item (1) of the Table to section 3 of the 1949 Act.
11. Hence, the view taken by the High Court in the judgment and order under appeal that the premises of M/s. Birla Ltd. at the mines site being a factory premises covered by Item (2) of the Table to section 3 of the 1949 Act the payment of duty leviable in respect of electrical energy consumed in that premises is covered by Item (2) of the Table, becomes unsustainable and calls to be interfered with.
12. The next question which arises for our consideration is as to sustainability of the provisions in the Validation Act which validate the levy of duty imposed under Item (1) to the Table to section 3 of the 1949 Act in respect of electrical energy consumed in the premises of M/s. Birla Ltd. at their mines site to which Mines Act is applicable under the 1949 Act and in respect of similar premises of other persons or companies to which Mines Act is applicable.
13. Although learned counsel for the petitioners for the writ petitions sought to question the provisions of the Validation Act which purport to retrospective validate levy of duty on electrical energy consumed in their premises under the 1949 Act because of the view taken of section 3 of the 1949 Act by the High Court in its judgment and order under the present appeal, the learned counsel for the State of Madhya Pradesh sought to support the sustainability of the Validation Act placing reliance on the decision of this Court in Govt. of A.P. v. H.M.T. (1975) Suppl. S.C.R. 394, where this Court had upheld the provisions of a Validation Act by which duty made payable in respect of a building premises retrospectively. Prima facie, the decision of this Court appears to support the stand of learned counsel for the State. But, when the judgment and order of the High Court under the present appeal, which is sought to be made ineffective by the Validation Act, is held to be unsustainable by us in the present appeal, we find it unnecessary, to examine the constitutionality of the Validation Act.
14. In the result, we not merely allow this civil appeal, set aside the judgment and order of the High Court in W.P. No. 520 of 1980 (reported in AIR 1982 MP 225) appealed against and dismiss that writ petition, but also dismiss the writ petition filed in this Court. No costs.
