Tata Iron & Steel Co. Ltd. v. State of Bihar — 1991 DIGILAW 310 (PAT)

JUDGMENT S. B. Sinha, J. In this application, the petitioner has prayed for issuance of a writ of or in the nature of mandamus directing the respondents to refrain from realising surcharge as Contemplated under Section 3A of the Bihar Electricity Duty Act, 1948 (hereinafter referred to as 'the Act) on the electrical energy generated by the petitioner at Jamadoba for its own use in its captive collieries and directing the respondents to refund surcharge collected from the petitioner so far. 2. The fact of the matter lies in a very narrow compass. 3. The petitioner is a company incorporated under the Indian Companies Act and it is owner of various coal mines which, inter alia, are situated in the district of Dhanbad. 4. For supply of electrical energy to its collieries at Jamadoba, the petitioner has installed a plant for generating electricity. 5. According to the petitioner, the electricity so generated is meant by (Sic) captive consumption and not for the purpose of distribution to out-siders. According to the petitioner, it has also been purchasing electricity from D.V.C. as also from Bihar State Electricity Board. 6. The petitioner, has contended that it is neither a licensee nor a sanction holder within the meaning of Section 28 of the Indian Electricity Act, 1910. 7. The petitioner, admittedly, is a registered (Sic) under the provision of the said Act and according to the petitioner as it generates electrical energy for its own consumption no surcharge can be levied upon it in terms of Section 3A of the said Act. 8. The petitioner, however, allegedly on an erroneous view had paid surcharge for the period August, 1985 to March, 1986. It, however, transpired that the petitioner was not liable to pay surcharge and thus it by a letter dated 23.4.1986 which is contained in Annexure 2 to the writ application stated that it is not liable to pay any surcharge any further and the same would not be paid by petitioner. For the surcharge paid for the period of August, 1985 to March, 1986, the petitioner started adjusting the amount from its further dues. 9. However, the respondent no.4 by a memo dated 23.6.1986 which is contained in Annexure 3 to the writ application opined that the petitioner was liable to pay surcharge. By another letter dated 5.7. For the surcharge paid for the period of August, 1985 to March, 1986, the petitioner started adjusting the amount from its further dues. 9. However, the respondent no.4 by a memo dated 23.6.1986 which is contained in Annexure 3 to the writ application opined that the petitioner was liable to pay surcharge. By another letter dated 5.7. 1986 the petitioner sought to explain to respondent no.4 that the liability to pay surcharge was not on every person generating electrical energy but only upon a licensee. A copy of the said letter dated 5.7.1986 is contained in Annexure 4, to the writ application. The matter, thereafter, was discussed by and between the petitioner and the joint Commissioner of Commercial Bank whereupon the• petitioner pending final decision agreed to pay electricity dues which it had adjusted earlier. 10. By a letter dated 4.10.1986, the petitioner asked the respondents to refund the amount of surcharge paid by it (Annexure 7). By a letter dated 20.10.1986 the respondent stated that as the petitioner was a licensee, the question of refund of any amount of surcharge paid by the petitioner does not arise (Annexure 8). 11. In this case a counter affidavit has been filed on behalf of the respondents. In the said counter affidavit it has been contended that in the application for registration filed by the petitioner on 10.10.1949, the nature of business has been shown' as generation, distribution and consumption by the TATA's own collieries and consumed by (a) Jharia water Board having Pumping Station at Jamadoba Pits for water supply and (b) Central Fuel Research Institute, Digwadih with consent of Sijua-.Jharia Electric Supply Company and on that basis, it has been contended on behalf of the respondents that the petitioner is a licensee. According to the respondents, as the petitioner generates electricity not only for its captive consumption but also distribution and/or supply to others, it comes within the category of a 'licensee' and thus, is liable to pay surcharge in terms of Section 3A of the Act. 12. In a rejoinder to the said counter affidavit, the petitioner has contended that the records of the year 1949 are not available and as such it was not in a position to explain as to under what circumstances it was contended at that point of time that the petitioner would supply electrical energy to Central Fuel Research Institute. 12. In a rejoinder to the said counter affidavit, the petitioner has contended that the records of the year 1949 are not available and as such it was not in a position to explain as to under what circumstances it was contended at that point of time that the petitioner would supply electrical energy to Central Fuel Research Institute. Digwadih or to Jharia Water Board. The petitioner, therefore, asked for issuance of certificates from the director of the Central Fuel Research Institute as also the Secretary of the Coad Mines Area Development authority by way of clarification that the said authority never received any supply of electrical energy from the petitioner. Such a clarification was sought by the petitioner by two letters dated 28.2.1986 as contained in Annexures 9 and 10 to the rejoinder and in reply thereto; the Central Fuel Research Institute as also the Coal Mining Area Development Authority (successor-in-interest of Jharia water Board) by a letter dated 2.12.1988 stated that they have not taken supply of any electrical energy from the petitioner on the basis of the records available to them. It is not disputed that electrical energy was supplied by the petitioner to the said authorities during the relevant period or thereafter. 13. In this case, therefore, the only question which arises for consideration is as to whether the petitioner is liable to pay surcharge in terms of Section 3A of the said Act. 14. The said Act was enacted for levy of duty on the sales and consumption of electrical energy in the province of Bihar. 15. A licence has been defined in Section 2(c) to mean any person including a company or a local authority licenced under part II of the Indian Electricity Act, 1910 to supply energy or any person including a company or a local authority who has obtained sanction under Section 28 of that Act to engage in the business of supplying energy. In terms of Section 3 of the said Act, the electricity duty is to be levied and paid to the State Government on the unit of energy consumed or sold excluding loss of energy in the transaction and transform at the rate specified in the first Schedule thereof. The proviso appended to Section 3, however, specifics the exceptions where no such electricity duty is to be paid. The proviso appended to Section 3, however, specifics the exceptions where no such electricity duty is to be paid. Sub-section (2) of section 3 of the said Act provides that when a licensee holds more than one licence, duty shall be payable separately in respect of each licence. 16. Section 3 of the said Act was inserted by Bihar Finance Act, 1985 with effect from 1.8.1985 which reads as follows :- "3A. Surcharge - (I) subject to the provisions of clauses (I),(b) and (e) of subsection (2) of Section 3, every licensee shall pay, in addition to the duty payable under sub-section (1) of Section 3, surcharge at the rate of two paise per unit of energy consumed or sold; (2) Notwithstanding anything to the contrary contained in this Act, no licensee, who is liable to pay surcharge, shall be entitled to collect the amount of this surcharge as such from the consumer; (3) All provisions of this Act and the Rules framed thereunder, relating to the payment, assessment, recovery and refund of the surcharge." 17. The only question, therefore, which arises for consideration is as to whether the petitioner is liable to pay surcharge in terms of Section 3A of the said Act. It is true that from the application for registration it appears that the nature of business had been stated to be generation, distribution and consumption of electrical energy which would also evident from certificate of the registration granted to the petitioner as contained in Annexure A to the counter affidavit. 18. In the application for registration which is contained in Annexure B to the counter affidavit, the following facts has been stated :- "Name of business (state whether generation, distribution, consumption or combination of any of these). Boundary of the area of supply Generation, distribution and consumption by Tatas own collieries and consumption by (a) Jharia Water Board for their Pumping Station at Jamadoba 6 & 7 pits for water supply to Jharia field and (b) Fuel Research Institute at Digwadih with the consent of Sijua-Jherriah elect. supply Co. (1) Jamadoba Group. North-Bhaga Rly. Station. South-Damodar river and Bhowrah Colliery. East. Jharia-Patherdih Road West-Bhagaband, Bhutgoria and Kendwadih collieries. (b) Sujua Group North-Jogta-Sendra Coaliery South-Boohildih. East-Kankani• and Pandkanali West-Mudidi, Badrichuck and Gazlitand. (c) Malkera Group. North-Katras Colliery. South-Durgapur, Deugoam Kanchanpur. Kumarjori. Dharmaband. State if the energy is supplied to consumers in metered or unmetered premises or both. supply Co. (1) Jamadoba Group. North-Bhaga Rly. Station. South-Damodar river and Bhowrah Colliery. East. Jharia-Patherdih Road West-Bhagaband, Bhutgoria and Kendwadih collieries. (b) Sujua Group North-Jogta-Sendra Coaliery South-Boohildih. East-Kankani• and Pandkanali West-Mudidi, Badrichuck and Gazlitand. (c) Malkera Group. North-Katras Colliery. South-Durgapur, Deugoam Kanchanpur. Kumarjori. Dharmaband. State if the energy is supplied to consumers in metered or unmetered premises or both. Complete list of other places of generation and/or distribution for which the assessee holds separate license and for which separate application has been/ will be made. Books of accounts ordinarily maintained. Metered and unmet red premises. Metered and Unmetered Premises ... NIL (1) Jharia Water Board Bill Book. (2) Fuel Research Institute Bill Book. (3) Power Generation Meter Book. 19. It, therefore, prima facie appears that at one point of time, the petitioner used to Supply electrical energy to the Jharia Water Board as also to Central Fuel Research Institute but from Annexures 11 and 12 to the reply of the petitioner to the counter affidavit filed on behalf of the respondents, it is evident that for a long time no such supply of electrical energy is being made. Assuming for the sake of argument, that the petitioner still supplies electrical energy to the said authorities, in my opinion, in view of the definition of a licensee as contained in Section 2(c) of the said Act, it is evident that the petitioner is not a licensee within the meaning of the provisions of Indian Electricity Act nor is a sanction holder within the meaning of section 28 thereof. The respondents in their counter affidavit have not annexed any copy of licensee or sanction granted to the petitioner in terms of the provisions of the Indian Electricity Act, 1910. Even the number of such licensee or sanction has not been disclosed. The contention of the respondents to the effect that the petitioner is a licensee is only on the basis of the application for registration filed by it in the year 1949. It is not the case of the respondents that any licence or sanction in fact had been granted to the petitioner in terms of the provisions contained in Part II of the Indian Electricity Act. 20. It is not the case of the respondents that any licence or sanction in fact had been granted to the petitioner in terms of the provisions contained in Part II of the Indian Electricity Act. 20. In terms of Section 26A of the Electricity Supply Act, 1948, only a generating company within the meaning of section 2( 4A) thereof is not required to take any licence or to obtain sanction for the purpose of carrying on any of such activities. The petitioner docs not come within the purview of definition of 'generating company’ within the meaning of sub-section (4A) of Section 2 of the Electricity (Supply) Act. 21. From the scheme of the Act, it appears that Electricity duty is not only payable by a licensee or a sanction holder within the meaning of the provisions of Indian Electricity Act, 1910 but also by other persons who generate e1cctrical energy. 22. Section 3 of the said Act does not state that electricity duty has to be paid only by the licensee or by the sanction holder. This position clearly emerges from a reading of sub-section (4) of Section 4 of the said Act which provides that every person (including any department of the State Government) who generates energy for his own use or for the use of his employees or partly for such use and partly for sale, is liable to pay duty. This provision is in consonence with Section 3A of the said Act inasmuch as a person who may while consuming electricity may supply to its employees and sells a part of it to third person also although, he is not a licensee. 23. Section 3A, which, as noticed hereinbefore, was introduced by reason of Bihar Finance Act, 1985 and came, into force with effect from 1.8.1985 provides for payment of surcharge only by a licensee and not by any other registered dealer. 24. It is now a well known principle of interpretation of statute that where a word has been defined by reason of an interpretation clause contained in the Act itself, such definition shall ordinarily apply unless the same is contrary to or repugnant to the context. 25 The definition of the word 'licensee' is absolutely clear and unambiguous. 24. It is now a well known principle of interpretation of statute that where a word has been defined by reason of an interpretation clause contained in the Act itself, such definition shall ordinarily apply unless the same is contrary to or repugnant to the context. 25 The definition of the word 'licensee' is absolutely clear and unambiguous. Thus, in absence of any document to show that the petitioner is either a licensee or a sanction holder within the meaning of section 28 of the Indian Electricity Act, the question of its becoming liable to pay any surcharge does not arise. From a perusal of the definition of licensee, it may be noticed that obtaining of 'licence' or 'sanction' is required by a person in order to enable him to be engaged in the business of supplying electrical energy. 26. Thus, even assuming that the petitioner had been supplying electrical energy illegally to others, it may be proceeded against under the provisions of the Indian Electricity Act, but it cannot be made to pay any sur-charge for which it is not liable. It is, therefore, clear that the provisions of section 3A of the said Act is not applicable. It is profitable to notice that only in this view of the matter, other persons -generating electrical energy has also been made liable to pay surcharge by reason of Amending Act of 1990. 27. There cannot be any doubt that the petitioner paid electricity duty under a mistake of law. The petitioner, however, as is evident from the facts mentioned hereinbefore, upon detection of its mistake had not only stated that it was not liable to pay any surcharge but at that point of time adjusted the amount which had already been paid. The petitioner however, as stated hereinbefore, also took up the matter at the earliest opportunity with the concerned authorities. It is only by reason of an order dated 20th October, 1986 as contained in Annexure 8 to the writ application, the respondent no.4 rejected the claim of refund of the petitioner on the ground that the petitioner is a licensee. 28. This writ application has been filed in this Court on 5.3.1987. It, therefore, cannot be said that the petitioner is not entitled to obtain equitable relief on the ground of any delay or laches. 29. 28. This writ application has been filed in this Court on 5.3.1987. It, therefore, cannot be said that the petitioner is not entitled to obtain equitable relief on the ground of any delay or laches. 29. Taking, thus, all facts and circumstances into consideration, it must be held that the petitioner is entitled to obtain refund of the amount of surcharge paid to it by the respondents. 30. In the result, this application is allowed, the impugned order dated 20th October, 1986 as contained in Annexure 8 to the writ application is quashed, and the respondents are hereby directed to refund the amount of surcharge collected from the petitioner within two months from the date of receipt of a copy of this judgment. However, in the facts and circumstances of this case, there will be no order as to costs.