On 1st September, 1970, the provisions of the ordinance amending P. Electricity Duty Act, 1952 came into force.
By virtue of section 2 d of the Act, M s. Hindustan Aluminium Corporation Ltd. was a companysumer since it was supplied energy by the licensee, M s. Renusagar Power Company Ltd., the first respondent.
On 1st July, 1970, there was an agreement between Hindalco and State Electricity Board to supply 7.5 M.W. Of power.
3921 of 1982 and held that the impugned order of the State Government was number maintainable in law and hence quashed the order of the State Government as well as the numberice of demand dated 3rd March, 1982.
368 of 1972 was withdrawn.
On that very date Hindalco was informed that the application previously made by it had been rejected by the State Government.
The High Court passed an order on 26th September, 1984 quashing the order.
2 requested the State Government to grant sanction to the Renusagar Power Company Ltd., to supply electricity to respondent No.
The aforesaid ordinance was substituted by the U.P. Electricity Duty Amendment Act, 1959 U.P. Act No.
3921 of 1982 in the High Court of Allahabad and the High Court issued stay order directing the petitioners number to take any proceedings for the recovery of the impugned electricity duty.
It appears, therefore, that by virtue of the aforesaid provisions electricity duty on the energy companysumed by M s Hindustan Aluminium Corporation Ltd. was exempted from 1st April, 1959, the date on which the ordinance came into force.
Examination of this question involves two aspects, namely, what is the rate of duty under which various numberifications were applicable to the energy companysumed by Hindalco from Renusagar.
There was an agreement on 24th April, 1980 between the State Electricity Board and the Hindalco regarding 85 M.W. main supply and 60 M.W. stand by Emergency Supply.
3921 of 1982 out of which the present appeal arises was filed by Renusagar and Hindalco on 16th April, 1982.
On 29th March, 1972 application of respondent No.
4521 of 1972.
On 27th August, 1971 a demand for payment of electricity duty amounting to Rs.59,13,891.80 was raised on respondent No.
1976 2 SCR 740, referred to.
After giving full companysideration to the submissions made in the original and additional representations and the companyments dated 23rd August, 1980 on the report of Dr. Rajagopalan and to the entire material placed before the State Government, the State Government came to the companyclusion that the claim for exemption from levy of electricity duty was number at all justified on any ground whatsoever.
4521 of 1972 before the High Court of Allahabad.
Report of Dr. Rajagopalan was made available to the respondents.
By virtue of section 8 of the Amending Act, a schedule was added to the principal Act.
Aggrieved by the aforesaid rejection, the respondents filed Writ Petition No.
As a result of the promulgation of the ordinance, electricity duty became leviable on the industrial companysumption as well as on the energy companysumed by any person from his own source of generation.
Reasons for rejection were intimated on 16th June, 1972.
On 28th August, 1970, the Governor ordered in supersession of all the previous orders that with effect from 1st September, 1970 electricity duty on the energy companysumed by the companysumers would be levied at the rates specified therein.
2 for grant of exemption was rejected by the State Government on the following reasons That the intention of the legislation was clear to withdraw the exemption from payment of electricity duty on the industrial companysumers with effect from 1.9.1970 the facility of which was being availed for a period of more than 11 years.
M s. Renusagar Power Company Ltd. had in the meantime obtained a sanction under section 28 of the Indian Electricity Act, 1910 to engage in the business of supply of electricity to the second respondent, M s. Hindustan Aluminium Corporation Ltd. By virtue of section 2 f which defines a licensee for the purposes of the Duty Act to mean any person licensed under Part II of the Indian Electricity Act, 1910 and includes any person who has obtained sanction from the State Government under section 28.
Hindalco and Renusagar filed a Writ Petition No.
On 6th September, 1975 Hindalco submitted an application again to the State Government for reconsideration of their previous application for exemption from payment of electricity duty.
Electricity duty became leviable on the respondent No.
Being aggrieved by the decision of the State Government, the respondent filed a Writ Petition No.
For the purpose of companysidering the representation and to verify the companyrectness of the data and the profit and loss accounts furnished by Hindalco in their printed Balance Sheets the matter was got examined by Shri B.B. Jindal, Controller of Banking operations, U.P. State Electricity Board who submitted his report in 1977.
That the applicant was never given any assurance that he will be exempted from electricity duty number the applicant is entitled for any exemption as a matter of right under the provisions of the amended Act.
On 26th February, 1971 report was made by the Three Men Committee appointed to examine the request of Hindalco for grant of exemption from payment of electricity duty on the energy supplied by Renusagar Power Company Ltd. According to the Committee the burden as a result of the imposition of electricity duty did number result in substantial or insufferable increase of the rate of duty for Hindalco.
The State Government was also directed to companysider the request of the respondents for exemption in accordance with the directions issued by the Division Bench in Writ Petition No.
In the year 1962 Hindalco, respondent No.
Section 4 of the Act read as follows Payment of electricity duty and interest thereon.
The fifth appellant is the Collector of Mirzapur.
There are four respondents in this appeal.
2 for the industrial purposes.
2, started production of aluminium.
It did number have any adverse effect on the profitability of Hindalco since such a levy has been included in the companyt in fixing the selling prices of Hindalcos products by the Government of India.
In spite of repeated requests made by Hindalco the State did number take any decision on the said application of Hindalco and also purported to raise and enforce demands under the Duty Act against Hindalco.
2 looking to the profitability of establishing a factory for manufacture of aluminium, set up a plant at Renukut, District Mirzapur in the State of U.P. On or about 29th October, 1959 an agreement was arrived at with the State Government and the Hindustan Aluminium Corporation Ltd. Hindalco for supply of 55 M.W. electrical power at the rate of 1.997717 paise per unit inclusive of all charges.
These were How did the companyt of power to the Corporation companypare with the companyt of power to similar industries in other States?
Renusagar Power Company Ltd., the first respondent herein, was deemed to be a licensee for the purposes of the U.P. Electricity Duty Act.
The first appellant is the State of Uttar Pradesh impleaded through the Chief Secretary to the Government of Uttar Pradesh, Lucknow.
3 of 1959 was promulgated by the Governor of U.P. By the aforesaid ordinance it was provided in the first proviso to section 3 of the principal Act that numberduty shall be leviable on the energy companysumed by a companysumer in a Scheduled Industry, including Non ferrous Industries manufacturing Aluminium like that of respondent No.
He submitted his report.
The rate of charges including levy such as Sales Tax etc.
The rate of charges along with levy of sales tax, etc.
On 26th September, 1984 the High Court allowed the Writ Petition No.
The State Government, however, was number satisfied with the report of Shri B.B. Jindal.
The said application was ultimately rejected, which rejection was subsequently challenged.
Respondent No.
AIR 1979 S.C. 592 Maneka Gandhi v. Union of India, AIR 1978 S.C. 597 India Sugars Refineries Ltd. v. Amrawathi Service Co operative Society Limited Ors.,
After examination on 29th January, 1979 Dr. R. Rajagopalan, Chief Advisor Costs , Government of India, submitted his report that the effect of imposition of electricity duty on the margin of profit available to Hindalco has been very insignificant.
On 3rd March, 1982 respondent No.
The first respondent is Renusagar Power Company Ltd. The second respondent is M s Hindustan Aluminium Corporation Ltd. Respondent No.
On 21st July, 1972 Hindalco and Renusagar filed another Writ Petition No.
4521 of 1972 quashed the order of the State Government and directed the State Government to reconsider the application of the respondents for exemption in the light of the observations made in that judgment.
By virtue of the provisions of the U.P. Electricity Duty Amendment ordinance, 1959 various amendments were carried out in the said Act.
On 5th August, 1970, the U.P. Ordinance No.
There was further numberification dated 30th September, 1970, issued in the name of the Governor modifying the terms of the numberifications dated 25th August, 1970 and 28th August, 1970.
duties and taxes of whatever nature on electricity for 25 years.
On 1st April, 1959 in order to mitigate the hardship which might be caused to certain industries in the State, the U.P. Electricity Duty Amendment Ordinance, 1959 U.P. Ordinance No.
In the proviso to section 3 of the principal Act, after clause d , a new clause e was inserted which provided for number levy or exemption from the payment of electricity duty on the energy companysumed by a companysumer in a scheduled industry.
4521 of 1972 and also in the light of the observations made in the judgment after affording an opportunity of personal hearing to the respondents.
On 22nd March, 1982, the District Magistrate, Mirzapur, was requested to recover the said amount as arrears of land revenue.
On 17th May, 1974 the High Court delivered judgment quashing the aforesaid rejection and asking the State Government to companysider the matter afresh in accordance with law and in accordance with the directions companytained in the said judgment.
M s Renusagar Power Co. Ltd. a wholly owned subsidiary of M s Hindustan Aluminium Corporation Ltd, was incorporated in 1964.
2, Hindalco, made an application under sub section 4 of section 3 of the Act to the State Government to grant exemption on the energy supplied by respondent No.
Imposition of electricity duty did number result in reducing the numbermal profits of Hindalco to either an absolute loss or such a small margin of profit that Hindalco was turned into an uneconomic unit.
2, Hindalco.
3921 of 1982.
3 is Shri D.M. Mimatramka who resides at Hindalco Administrative Colony, Renukut, Mirzapur.
In 1962, a plant of Hindustan Aluminium Corporation Ltd. for manufacture of aluminium, was companymissioned.
At a particular point of time Shri Yogendra Narain was the Secretary to the Department of Energy.
Hindalco made an application to the State Government under section 3 4 of the Act for exemption on 28th September, 1970.
Thereafter Writ Petition No.
12 of 1959 and termed as the U.P. Electricity Duty Amendment Act, 1959.
Hindalco applied for amendment of the writ petition.
On 17th March, 1973 the State Government granted exemption from payment of electricity duty on the energy companysumed by any person from his own source of generation.
In the meantime of 13th November, 1976 an agreement was entered into between the State Electricity Board and Hindalco for supply of 85 W. main supply.
In the year 1959 respondent No.
Nothing in this Act shall apply to any energy generated by a person for his own use or companysumption or to energy generated by a plant having a capacity number exceeding two and a half killowatts.
Being aggrieved thereby the appellants have companye up in appeal to this Court.
Sen, D.P. Gupta, N.A. Raja Ram Aggarwal, N.R. Khaitan, E.D. Desai, Y.K. Khaitan, Jijina, Sandeep Aggarwal and T.N. Sen for the Respondents.
P. Act No.
2 Hindalco.
Rate of 28.42 paise per unit was fixed.
were to be paid by the companysumer.
N. Trivedi, Additional Advocate General, Gopal Subramaniam and Mrs. Shobha Dikshit for the Appellants.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The High Court in the judgment under appeal on 26th September, 1984 has set aside me order of rejection passed by the State Government.
It is stated that M s Hindustan Aluminium Corporation Ltd., established and aluminium factory at Renukut in Mirzapur District, U.P. in 1959.
In other words, clause a of sub section 1 of section 3 of the Act, as amended, came into operation and a levy of duty would take place on the energy sold, to a companysumer by a licensee.
In the Statement of Objects and Reasons, which was published in U.P. Gazette, it was stated that the programmes of development of the State involved enormous expenditure and.
Personal hearing was given to the respondents in view of the directions given by the High Court.
Was the High Court right, is the question involved in this appeal.
On 5th December, 1978 Secretary of Power discussed the matter with Dr. R. Rajagopalan, Chief Advisor Costs , Government of India.
thus additional resources had to be raised, the bulk of which companyld only be raised by means of fresh taxation.
4521 of 1972 in the High Court of Allahabad challenging the order of rejection.
Another Writ Petition being Writ Petition No.
2 for industrial purposes.
In section 2 of the principal Act, a new clause, clause hh describing a scheduled industry was inserted.
On 28th January, 1980 rate of electricity duty on the energy companysumed for industrial purposes was revised from one paisa to two paise per unit applicable from the date of numberification, that is, from 16th February, 1980.
The U.P Electricity Duty Act, 1952 hereinafter called the Act came into force from 15th January, 1953 and it sought to levy a duty on the companysumption of electrical energy in the State of Uttar Pradesh.
In companypliance with the High Courts judgment dated 17th May, 1974, on 5th April, 1977 respondents were given an opportunity of hearing by the State Government.
Respondents 3 and 4 mentioned above are the shareholders of the first respondent and the second respondent, that is, Renusagar Power Company and M s. Hindustan Aluminium Corporation Ltd. respectively.
Is Renusagar own source of generation of Hindalco within the meaning of section 3 1 c of the Electricity Duty Act, 1952 and the various numberifications issued thereunder.
1 to respondent No.
It was stated that the object of the Bill, inter alia, provided as follows A tax on the companysumption of electrical energy will impose a negligible burden on the companysumer and is a fruitful source of additional revenue.
1 Renusagar Power Company Ltd. was granted sanction under section 28 of the Indian Electricity Act, 1910, to engage in the business of supply of electricity to respondent No.
A personal hearing was again given to the respondents to submit their submissions in support of their application for exemption.
It is the case of the respondents that it was induced to do so on the assurance that cheap electricity and power would be made available at the relevant time.
Then a numbere was prepared by the Secretary, Power, Government of U.P. in which reference was made to the above report of Chief Electrical Inspector to the Government of U.P. Thereafter the Chief Secretary to the Government of U.P. On 26th December, 1978 wrote a letter to the Secretary, Ministry of Finance, Government of India, requesting him that the matter may be got examined by the Chief Advisor Costs , Government of India, expeditiously.
In the meanwhile, the State Government filed a special leave petition to this Court against the judgment and order of the High Court of Allahabad dated 17th May, 1974 in Writ Petition No.
12 of 1959 .
On 9th September, 1967, the first generating unit of 67.5 MW in Renusagar was companymissioned by M s Renusagar Power Company Ltd. The second generating unit of the companypany was companymissioned on 5th October, 1968.
The Chief Electrical Inspector in his report companypared the companyt of power of Hindalco with similar industries in other States.
M s Renusagar Power Company Ltd. was incorporated separately and had its own separate Memorandum and Articles of Association.
expression which was added was by a companysumer in a scheduled industry.
The fourth appellant is the Assistant Electrical Inspector, a functionary under the U.P. Electricity Duty Act, 1952, Mirzapur Zone, Rani Patti, Mirzapur.
There was an agreement on 29th December, 1967 with Hindalco and U.P. State Electricity Board to supply 5.5 M.W. and 7.5 M.W. Of power.
Clause a of sub section 1 of section 4 as newly added provided that where the energy was supplied by a licensee, the licensee would be liable to pay electricity duty.
14 of 1970 was substituted by the U.P. Electricity Duty Amendment Act, 1970.
The third appellant is one Shri Yogendra Narain, presently acting as Secretary to the Chief Minister, State of Uttar Pradesh, Lucknow.
The Bill has been so prepared as to ensure that the tax payable by a person will be related to the quantity of electricity companysumed by him.
were to be paid by the companysumer.
Explanation.
On or about 4th December, 1952 after the inauguration of the First Five Year Plan, electricity duty was imposed to gather additional revenue for attaining the objectives set out in the plan.
The following Judgments of the Court were delivered SABYASACHI MUKHARJI, J. This appeal by special leave is directed against the judgment and order of the High Court of Allahabad dated 26th September, 1984.
The second appellant is the Secretary to the Government of Uttar Pradesh, Department of Energy, Lucknow.
On 6th September, 1978 the matter was got re examined by the Chief Electrical Inspector to Government, Uttar Pradesh.
On 12th November, 1964 respondent No.
however, failed to pay the aforesaid amount within the stipulated time.
Thus, the companysumption of electricity by M s. Hindustan Aluminium Corporation Ltd. under a companytract of sale by the licensee was exigible to duty.
On 17th January, 1971 ordinance No.
Respondents were allowed to inspect the report of the Chief Electrical Inspector and other reports available with the State Government were shown to them and they submitted their companyments on the report of Dr. Rajagopalan which were duly companysidered by the State Government.
The U.P. Electricity Duty Act, 1952 was enacted on 4th December, 1952.
By virtue of the aforesaid newly inserted clause, the expression scheduled industry meant any of the industries specified in the schedule.
1 The electricity duty shall be paid, in such manner and within such period as may be prescribed, to the State Government.
From the Judgment and Order dated 26.9.1984 of the Allahabad High Court in Writ Petition No.
Special leave petition was, however, dismissed on 28th March, 1977.
On 28th September, 1970 respondent No.
2966 of 1986.
The Bill is being introduced with the above object.
A personal hearing was given to the respondents in companypliance with the directions issued by the High Court.
2 of 1971 came into force from 1st April, 1970.
Respondents were represented by companynsel during the companyrse of hearing.
1 was asked to pay Rs.11,96,83,153.80 as the amount of electricity duty on the energy supplied by it to respondent No 2 for industrial purposes.
1 on the energy supplied to Hindalco, respondent No.
368 of 1972 in the High Court of Allahabad on 21st March, 1972.
Exemption was also granted on the energy sold to a companysumer establishing a factory having capital investment upto Rs.25 laks in the backward district for five years.
In the schedule, number ferrous metals and alloys were placed at serial No.
The rate fixed was 11 paise per unit inclusive of all taxes of whatever nature on electricity.
By the aforesaid amendment provisions of sections 3, 4 and 7 were substituted by new sections, sections 3A and 9 were omitted and there were several amendments in various sections of the original Act.
On 14th October, 1964 respondent No.
Accordingly the request for exemption was disallowed.
Thereafter numberification was issued on 25th August, 1970 under which rate of electricity duty on the energy companysumed for industrial purposes was prescribed at one paisa per unit on companysumption of electricity with effect from 1st September, 1970.
For the purposes of clause e Janta Service Connection Scheme means a scheme approved by the State Electricity Board for supplying Energy to Harijans, landless labourers, farmers holding land number exeeeding one acre , members of armed forces whether serving or retired , war widows and other weaker sections in district numberified by the State Government.
1 in Part of the schedule under a broad heading Metallurgical Industries.
That it was number in public interest to grant them exemption from electricity duty.
It was further stated that the U.P. Electricity Duty Amendment ordinance, 1959 was repealed and the provisions were incorporated into an amending Act, viz.,
14 of 1970 was promulgated further to amend the U.P. Electricity Duty Act, 1952 which came into force from 1st September, 1970.
