M/s. Orient Paper & Industries Ltd. Vs. Electrical Inspector & Ors.
EmailAppeal: Civil Appeal No. 1690 of 1987.
Petitioner: M/s. Orient Paper & Industries Ltd.
Respondent: Electrical Inspector & Ors.
Apeal: Civil Appeal No. 1690 of 1987.
Judges: RANGANATH MISRA & MURARI MOHON DUTT, JJ.
Date of Judgment: Dec 03, 1987
Head Note:
ORISSA ELECTRICITY (DUTY) ACT, 1961
Levy of duty on self consumption of electricity by captive generation – Dispute confined to the sudden hike in the rate for the period between 1979 and 1986 – Appellant to pay the outstanding duty in six quarterly instalments – No interest payable if instalments are paid in time.
JUDGEMENT:
O R D E R
1. Heard learned counsel for the parties. Challenge herein by special leave is to the judgment of the Orissa High Court in a dispute arising out of the demand under the Orissa Electricity (Duty) Act, 1961. The appellant is a manufacturer of paper having its industry located at Brajrajnagar in the District of Sambalpur in Orissa State. It operates a captive electricity generation unit for its production. In 1961, the State Legislature decided to levy a duty as permissible under entry 53 of List II of Schedule VII on self-consumption of electricity by captive generation by the producer. The Act has undergone amendment from time to time. Initially the rate of duty was couped up with a tariff rate prescribed for Thermal duty but later it was changed and from 1980 there has been a huge escalation in the rate when the basis was changed from the existing pattern to adopting the general tariff rates of the Board. There is no dispute that from 1986 under Orissa Act IX of 1986 there has again been a substantial reduction of the rate of duty and now it is as per Schedule prescribed under the Act on unit basis. There is no challenge to the reduced rate and the appellant has been paying the same.
2. Learned counsel for the appellant tried to impress upon us that the rate at which duty was charged between 1979 and 1986 brought about a burden which the Industry could not take and out of its operational difficulties on viable basis the contention which is the foundation for challenge has come.
3. Counsel does not dispute the power of the State to levy a duty. What we have been told in course of argument is about the manner in which the duty has been levied and the challenge is to the sudden hike in the rate. Having heard learned counsel for the parties we noticed that the dispute was confined to the period between 1979 and 1986 and was not surviving beyond that period. We, therefore, suggested to them that the better way would be to settle up the dispute. Learned counsel for the State told us that there are several other industries similarly placed as the appellant and they have without challenge paid the duty at higher rates and it would be difficult for the State to treat the appellant differentially by giving up a part of the duty so far as the appellant alone is concerned. He further pointed out that amounts so collected over the years from several consumers of captively produced energy have been utilised in the normal course and it would be difficult for the State to pay back the same. We have taken into consideration these submissions and are of the view that there is substance in the stand taken by the counsel for the respondent. In these circumstances, the only reasonable way in which this appeal can be disposed of, appears to us to be to consider the appellant’s claim confined to the question of payment of interest on the outstanding dues and a little accommodation by spreading over the demand over a reasonable period to facilitate payment.
4. There is some difference as to what exactly is the outstanding duty but we do not think it would be appropriate for us to quantify it. We leave it to the parties to ascertain what exactly is the outstanding duty payable but we agree that there should be a spread over. We have already noticed the fact that the appellant has been paying the current charges and there is no dispute about the same. There is also dispute as to the quantum of interest. While counsel for the appellant contends that there is a levy called ‘surcharge’ which is payable in the event of the duty not being paid in time, counsel for the respondents does not agree with this submission and states that the surcharge is levied by the Board and is connected with tariff. Since it is not agreed between them, we clarify that in case the levy of surcharge is connected with interest and is relatable to non payment of duty in time, such surcharge shall be covered by the direction in the subsequent paragraph. In case it has nothing to do with the late payment of duty, the direction would not relate to surcharge.
5. In the facts of the case and keeping the contentions already raised in this appeal, we direct that the appellant shall pay the entire arrears of electricity duty in six quarterly instalments – the first to be paid on or before the 20th December, 1987. Within every three months from that date, one of the remaining instalments would become due and the last instalment shall be of whatever is the outstanding balance. In the event of the instalments being paid as directed, there would be no liability of interest at all and in the event of there being any failure, the remission of interest shall not be given effect to and the entire interest shall be collected. The benefit accorded in this case is confined to the facts of this case and shall not be taken as a precedent. No costs.
Appeal partly allowed.
1. Heard learned counsel for the parties. Challenge herein by special leave is to the judgment of the Orissa High Court in a dispute arising out of the demand under the Orissa Electricity (Duty) Act, 1961. The appellant is a manufacturer of paper having its industry located at Brajrajnagar in the District of Sambalpur in Orissa State. It operates a captive electricity generation unit for its production. In 1961, the State Legislature decided to levy a duty as permissible under entry 53 of List II of Schedule VII on self-consumption of electricity by captive generation by the producer. The Act has undergone amendment from time to time. Initially the rate of duty was couped up with a tariff rate prescribed for Thermal duty but later it was changed and from 1980 there has been a huge escalation in the rate when the basis was changed from the existing pattern to adopting the general tariff rates of the Board. There is no dispute that from 1986 under Orissa Act IX of 1986 there has again been a substantial reduction of the rate of duty and now it is as per Schedule prescribed under the Act on unit basis. There is no challenge to the reduced rate and the appellant has been paying the same.
2. Learned counsel for the appellant tried to impress upon us that the rate at which duty was charged between 1979 and 1986 brought about a burden which the Industry could not take and out of its operational difficulties on viable basis the contention which is the foundation for challenge has come.
3. Counsel does not dispute the power of the State to levy a duty. What we have been told in course of argument is about the manner in which the duty has been levied and the challenge is to the sudden hike in the rate. Having heard learned counsel for the parties we noticed that the dispute was confined to the period between 1979 and 1986 and was not surviving beyond that period. We, therefore, suggested to them that the better way would be to settle up the dispute. Learned counsel for the State told us that there are several other industries similarly placed as the appellant and they have without challenge paid the duty at higher rates and it would be difficult for the State to treat the appellant differentially by giving up a part of the duty so far as the appellant alone is concerned. He further pointed out that amounts so collected over the years from several consumers of captively produced energy have been utilised in the normal course and it would be difficult for the State to pay back the same. We have taken into consideration these submissions and are of the view that there is substance in the stand taken by the counsel for the respondent. In these circumstances, the only reasonable way in which this appeal can be disposed of, appears to us to be to consider the appellant’s claim confined to the question of payment of interest on the outstanding dues and a little accommodation by spreading over the demand over a reasonable period to facilitate payment.
4. There is some difference as to what exactly is the outstanding duty but we do not think it would be appropriate for us to quantify it. We leave it to the parties to ascertain what exactly is the outstanding duty payable but we agree that there should be a spread over. We have already noticed the fact that the appellant has been paying the current charges and there is no dispute about the same. There is also dispute as to the quantum of interest. While counsel for the appellant contends that there is a levy called ‘surcharge’ which is payable in the event of the duty not being paid in time, counsel for the respondents does not agree with this submission and states that the surcharge is levied by the Board and is connected with tariff. Since it is not agreed between them, we clarify that in case the levy of surcharge is connected with interest and is relatable to non payment of duty in time, such surcharge shall be covered by the direction in the subsequent paragraph. In case it has nothing to do with the late payment of duty, the direction would not relate to surcharge.
5. In the facts of the case and keeping the contentions already raised in this appeal, we direct that the appellant shall pay the entire arrears of electricity duty in six quarterly instalments – the first to be paid on or before the 20th December, 1987. Within every three months from that date, one of the remaining instalments would become due and the last instalment shall be of whatever is the outstanding balance. In the event of the instalments being paid as directed, there would be no liability of interest at all and in the event of there being any failure, the remission of interest shall not be given effect to and the entire interest shall be collected. The benefit accorded in this case is confined to the facts of this case and shall not be taken as a precedent. No costs.
Appeal partly allowed.
