2019 (12) TMI 1644 - HC - Indian Laws

Levy of penalty for not making the payment of the electricity duty at the prescribed rate within the due dates - Jurisdiction of Deputy Commissioner Commercial Taxes to pass such order - Order passed under review - Section 9-A of the Bihar Electricity Duty Act - HELD THAT - From the perusal of Rule 12 (1) of the Bihar Electricity Duty Rules it is thus clear that the Commercial Taxes Officer and the Deputy Commissioner of Commercial Taxes are the officers of the same rank so far as the assessment order is concerned. Rule 14(10) (11) clearly prescribe that for reviewing any order other than the order passed by the Commissioner the sanction of the Commissioner in writing is required and such review cannot be made beyond the period of 12 months from the date of the passing of the order sought to be reviewed and further an order can be reviewed by an officer who is the successor-in-office of the officer who had passed the order sought to be reviewed only with the previous sanction of the Commissioner even if the order is sought to be reviewed within the period of 12 months. A bare perusal of Section 5-A (2) of the Act shows that even the orders under this provision have to be passed by the prescribed authority. Such authority may be prescribed either in the Act or in the Rules. If the contention of the learned counsels for the State is accepted that this provision is not subject to any Rules then it is incumbent upon the learned counsel for the State to show as to where in the Act such authority has been prescribed which could pass the order under Section 5-A(2) of the Act. The impugned penalty orders as contained in Annexure-12 to the writ applications clearly show that they have been passed as review orders and Annexure-10 to the writ applications clearly show that in view of the audit objection made by the audit team of the Accountant General the review proceedings had been initiated and the letters had been issued to the Commissioner of Commercial Taxes for granting sanction for review. According to Section 9-A (4) the prescribed authority to review an order would be the officer who had passed the order or his successor-in-office - The submission of the learned counsels for the State that the order is not an order passed in review rather it is an order passed suo-motu by an authority under the Act imposing penalty cannot be accepted. It is the settled principle of law that an order is to be read as it is and its contents / nature cannot be improved by subsequent affidavits / submissions. Thus it is clear and apparent that the impugned orders of penalty dated 30.1.2014 as contained in Annexure-12 to the writ applications are actually the orders passed in review in exercise of the powers under Section 9A (4) of the Act read with Rules 14 (10 ) and (11) of the Rules and these orders have been passed without any previous sanction in writing of the Commissioner of Commercial Taxes and have also been passed beyond the period of un-extendable limitation of one year. As such these penalty orders cannot be sustained in the eyes of law. Consequently the subsequent orders / Judgement passed by the Commissioner of Commercial Taxes Ranchi and the Tribunal also cannot be sustained in the eyes of law. All the penalty orders are hereby set aside. Consequently the penalty amount deposited / recovered from the petitioner Company are directed to be refunded / adjusted in the future bills towards the electricity duty. Writ Applications allowed.

Summary

Issues Involved:
1. Determination of electricity duty payable by the petitioner Company.
2. Legality of penalty orders imposed for non-payment of electricity duty at the prescribed rate.
3. Validity of review orders passed beyond the prescribed period without sanction from the Commissioner of Commercial Taxes.
4. Applicability of Section 5-A(2) and Section 9-A of the Bihar Electricity Duty Act.

Detailed Analysis:

1. Determination of Electricity Duty Payable by the Petitioner Company:
The petitioner Company, involved in mining and washing of coal, claimed that washing was an industrial process, thus liable to pay electricity duty at 0.02 paise/unit. The State contended that washing was part of the mining process, attracting a duty of 0.15 paise/unit. The High Court referred to a previous judgment (W.P.(T) No. 2593 of 2010) and the Supreme Court's decision in Chowgula & Co. Pvt. Ltd. & Anr. Vs. Union of India, which classified washing as part of the mining process, thus validating the higher duty rate.

2. Legality of Penalty Orders Imposed for Non-Payment of Electricity Duty at the Prescribed Rate:
The penalty orders were imposed on the petitioner Company for failing to pay the prescribed duty within due dates. The State argued that these penalties were imposed under Section 5-A(2) of the Act, which is not subject to any rules or limitation period. However, the Court found that Section 5-A(2) requires the penalty to be imposed by a 'prescribed authority,' which must be defined either in the Act or the Rules.

3. Validity of Review Orders Passed Beyond the Prescribed Period Without Sanction from the Commissioner of Commercial Taxes:
The review orders were passed beyond the 12-month period without the Commissioner's sanction, violating Rule 14(10) & (11) of the Bihar Electricity Duty Rules. The Court noted that the review orders were initiated due to audit objections but lacked the necessary sanction from the Commissioner, making them legally unsustainable.

4. Applicability of Section 5-A(2) and Section 9-A of the Bihar Electricity Duty Act:
Section 5-A(2) prescribes penalties for delayed payment of duty, while Section 9-A(3) allows for revision of orders within two years. The Court emphasized that the penalty orders were indeed review orders under Section 9-A(4), requiring the Commissioner's sanction and adherence to the 12-month limitation, which was not met.

Conclusion:
The High Court concluded that the penalty orders dated 30.01.2014 were review orders passed without the necessary sanction and beyond the permissible period. Consequently, these orders, along with subsequent orders by the Commissioner of Commercial Taxes and the Tribunal, were set aside. The penalty amounts recovered from the petitioner were ordered to be refunded or adjusted in future electricity duty bills. The Court clarified that authorities are not barred from proceeding in accordance with the law. All writ applications and pending interlocutory applications were allowed and disposed of accordingly.