9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (7) TMI 529 - HC - Indian LawsConstitutional validity of Section 13(1) of the Chhattisgarh Upkar Adhiniyam, 1981 - insertion of a new provision by way of Section 3(1-a) bringing the 'producers' of electrical energy as well within the 'tax net' made various captive power producers - arrears of Energy Development Cess and interest payable for the period from October, 2007 to January, 2014 - HELD THAT - Though the statue originally intended to collect EDC only from the ' Distributors ' of electricity as given under Section 3(1) of the 1981 Act, as per the CG Act No. 28 of 2014, 28 of 2004, Section 3(1-a) was introduced in similar terms, demanding Cess from the ' Producers ' of electricity as well. The rate is also common, as on date, by virtue of the CG Act No. 10 of 2010. This being the position, there is no unreasonable classification and both the 'Producers' and the 'Distributors' are required to satisfy the EDC to the requisite extent, though the matter is still pending consideration before the Apex Court in respect of the validity of Section 3(1-a) of the 1981 Act. The entire case is moulded with reference to the nature of business being performed by the Petitioners in the capacity as a 'Distributor ' of electricity, coming within the purview of 'Section 3(1)' of the 1981 Act and not with reference to the liability as a 'Producer' of electricity, separately coming within the purview of 'Section 3(1-a)' of the 1981 Act (which issue is pending before the Supreme Court). There is no pleading in the writ petition that the Petitioner-Company is a 'Producer' of electricity in any capacity and the rights of the Petitioners in this regard are adversely affected because of any unreasonable classification with reference to IPP and CPP, as the case may be. Every 'Distributor' of electrical energy shall pay the electricity duty in respect of each month before expiry of the following month into the Government treasury under the head as mentioned therein and send 'treasury receipt' to the Electrical Inspector within 15 days from the date of such credit - There is no case for the Petitioners that they had complied with the requirements by effecting the payment of 'Cess' in terms of Rule 3 of the Rules, 1949; that they have filed any return in terms of Rule 7(i); that there was no fault or delay in satisfying the statutory requirement or further that they had raised any dispute before any of the competent authorities as to the liability or quantum. This being the position, the contention raised by the Petitioners in this regard is absolutely without any merit or bonafides. The knowledge of the Petitioner/Distributor as to the liability to satisfy the EDC in terms of Section 3 and the relevant Rules is revealed from the materials on record. Even otherwise, there cannot be any defence with reference to the ignorance of law; as it is not an excuse. Whether the said rate of interest of 24% has been imposed by the 2nd Respondent as a matter of penal measure, for the reason that the Petitioners, after collecting the Cess from the consumers has not remitted and has misappropriated it or not? - HELD THAT - The answer can only be in the 'negative', as discernible from the Rule and the relevant Notification issued in this regard. This Court finds that the Petitioners have failed in establishing a case before this Court with regard to the alleged ultra vires nature of Section 3(1) of the 1981 Act, nor have they succeeded in substantiating the case to dispute the liability towards the Electricity Duty Cess and interest - petition dismissed.
Issues Involved:
1. Constitutional validity of Section 13(1) of the Chhattisgarh Upkar Adhiniyam, 1981. 2. Legality of the demand notices dated 19.06.2014 and 11.07.2014 for arrears of Energy Development Cess (EDC) and interest. 3. Applicability of principles of natural justice in the issuance of demand notices. 4. Classification and discrimination between distributors and producers of electricity. 5. Mechanism and procedural fairness in the levy and collection of EDC. 6. Reasonableness and arbitrariness of the interest rate imposed. Issue-wise Detailed Analysis: 1. Constitutional Validity of Section 13(1) of the 1981 Act: The petition challenged the constitutional validity of Section 13(1) of the Chhattisgarh Upkar Adhiniyam, 1981. The court upheld the validity, noting that the statute provides a clear mechanism for the levy and collection of EDC, including the rate and manner of satisfaction. The court found no unreasonable classification between producers and distributors of electricity, as both are required to satisfy the EDC. 2. Legality of Demand Notices: The demand notices dated 19.06.2014 and 11.07.2014 were issued for a total sum of ?49,47,27,587/- towards arrears of EDC and interest for the period from October 2007 to January 2014. The court found that the petitioners failed to comply with the statutory requirement to pay the cess and file returns as mandated by the rules. The court dismissed the contention that the demand was sudden and arbitrary, noting that the petitioners were aware of their liability. 3. Applicability of Principles of Natural Justice: The petitioners argued that the demand notices violated principles of natural justice as no prior notice or hearing was given. The court held that the statute is self-contained and does not require issuance of notice for the fixation of liability. The liability is clear and certain by virtue of the rate/quantum mentioned under Section 3(1) of the 1981 Act, and the requirement to file returns under Rule 7(i) of the Rules, 1949. 4. Classification and Discrimination: The petitioners contended that the cess imposed only on distributors was discriminatory, as producers were exempted following an interim order by the Supreme Court. The court rejected this argument, stating that both producers and distributors are required to satisfy the EDC, and the matter regarding producers is still pending before the Supreme Court. The court found no irrational classification or discrimination. 5. Mechanism and Procedural Fairness: The petitioners argued that the enactment was unreasonable and arbitrary due to the absence of a mechanism for notice, hearing, assessment, and appeal. The court noted that the Act, 1981, is a self-contained statute with provisions for the payment of cess, submission of returns, and settlement of disputes. The court found the statutory mechanism adequate and dismissed the petitioners' contention. 6. Reasonableness and Arbitrariness of Interest Rate: The petitioners challenged the imposition of a 24% interest rate as excessive and penal. The court found that the interest rates were applied strictly in conformity with the relevant notification under Rule 5(2) of the Rules, 1949, which specifies varying rates of interest based on the delay period. The court held that the interest rates were not arbitrary or penal in nature. Conclusion: The court dismissed the writ petition, upholding the constitutional validity of Section 13(1) of the 1981 Act and the legality of the demand notices. The court found no violation of principles of natural justice or unreasonable classification between producers and distributors. The statutory mechanism for the levy and collection of EDC was deemed adequate, and the interest rates applied were found to be reasonable and in accordance with the law.
|
