2012 (4) TMI 785 - HC - Indian Laws

Summary

Issues Involved:

1. Liability of the petitioner companies to pay electricity duty and surcharge.
2. Validity and retrospective application of Jharkhand Electricity Duty Amendment Act, 2011.
3. Status of Damodar Valley Corporation (DVC) as a licensee or assessee.
4. Authority of the State to recover electricity duty directly from consumers.

Summary:

1. Liability of the petitioner companies to pay electricity duty and surcharge:

The petitioner companies, including M/s Atibir Hi-Tech Pvt. Ltd., challenged the orders directing them to pay electricity duty and surcharge. The court considered definitions of 'consumer' and 'licensee' under the Bihar Electricity Duty Act, 1948, and relevant judgments. It was held that the petitioner companies, even if registered as assessees, are neither licensees nor liable to pay electricity duty and surcharge. The duty paid by the petitioner companies is not refundable. The Hon'ble Supreme Court remanded the matter for an authoritative judgment on the question of law.

2. Validity and retrospective application of Jharkhand Electricity Duty Amendment Act, 2011:

The amendment made various provisions effective retrospectively, causing all consumers to be liable to pay electricity duty directly to the State. The court found this amendment arbitrary, unworkable, and against public interest, leading to chaotic situations. The retrospective operation was declared ultravires and illegal. The court held that the amendment gives the State arbitrary power to demand duty from either the seller or consumer, which is unworkable.

3. Status of Damodar Valley Corporation (DVC) as a licensee or assessee:

DVC was not a licensee under the Bihar Electricity Duty Act, 1948, but was an assessee under Rule 2(b) of the Bihar Electricity Duty Rules, 1949. After the Electricity Act, 2003, DVC became a deemed licensee. The court held that DVC is liable to pay electricity duty and can recover it from its consumers under the terms of the agreement.

4. Authority of the State to recover electricity duty directly from consumers:

The court held that the State has no right to recover electricity duty directly from the consumers of DVC who obtain electricity for their own use. Any assessment or reassessment proceedings against these consumers were quashed. The court emphasized that the consumers are not assessees under the Act of 1948 or Rules of 1949.

Conclusion:

The court allowed the writ petitions, quashing the demands for electricity duty and surcharge against the petitioner companies. The retrospective application of the Jharkhand Electricity Duty Amendment Act, 2011, was declared illegal. The court affirmed that DVC is a deemed licensee and liable to pay electricity duty, but the State cannot directly recover the duty from DVC's consumers. The petitioners are not liable to pay surcharge to DVC.