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2015 (11) TMI 1005 - SC - Indian LawsApplicability of Limitation Act - Whether the Limitation Act, 1963, particularly Section 3 and the Schedule will apply to any action instituted before the Commission under Section 86(1)(f) of the Electricity Act, 2003? - Whether the impugned order passed by APTEL permitting application of principles emerging from Section 14 of the Limitation Act, is against Law so as to warrant interference? - Held that - A claim coming before the Commission cannot be entertained or allowed if it is barred by limitation prescribed for an ordinary suit before the civil court. But in appropriate case, a specified period may be excluded on account of principle underlying salutary provisions like Section 5 or 14 of the Limitation Act. We must hasten to add here that such limitation upon the Commission on account of this decision would be only in respect of its judicial power under clause (f) of sub-section (1) of Section 86 of the Electricity Act, 2003 and not in respect of its other powers or functions which may be administrative or regulatory. In the light of above there can be no difficulty in appreciating that M/s. LANCO rightly appreciated the hurdle of limitation in its way when such an objection was taken by the appellant and it rightly chose to seek exclusion of the period it was pursuing arbitration proceeding before the High Court, on the basis of principles underlying Section 14 of the Limitation Act. Having considered submissions of the parties we find no merit in the contention advanced on behalf of appellant that the commission was justified in not excluding this period of about one year on the ground that it was not bona fide and in such facts APTEL should not have taken a contrary view. The view which we are going to take has been indicated by this Court in several judgments including M.P. Steel Corporation (2015 (4) TMI 849 - SUPREME COURT). But the point requires no debate in view of clear stipulation in explanation (a) to sub-section (3) of Section 14 of the Limitation Act which reads as follows Explanation - For the purposes of this section, - (a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted. The same conclusion is inevitable even on other relevant facts. The appellant had notice of the arbitral proceeding and after judgment in Gujarat Urja (2008 (3) TMI 654 - Supreme Court of India), the appellant also took no steps to get the application under Section 11 listed and disposed of earlier to 18.3.2009. The averments and the materials are not sufficient to establish the claim of the appellant that the proceeding ceased to be bona fide after 13.3.2008. As a consequence of aforesaid discussion, the challenge to impugned order in respect of views taken on the issue of limitation in the light of principles of Section 14 of the Limitation Act fails. Claim for reimbursement of MAT - Held that - The claim of the appellant that liability of MAT is on account of change in Law and therefore required M/s. LANCO to adopt the procedure for making claims under Article 11.4 of the PPA does not appeal to us. The entire stipulation in Article 11.4 of the PPA is in respect of additional or reduced expenditures or costs which have not been catered for and arise later due to change in Law. The burden on account of income tax as per Article 3.9 of the PPA cannot be treated as additional or reduced burden because the entire actual advance income tax payable for the project is required to be reimbursed by the Board. It is immaterial whether the income tax payable is high or low in any particular year. When there is already a special provision in respect of entire payable taxes on income under Article 3.8 of the PPA, that should have precedence over the general provisions in Article 11.4 of the PPA. We have also considered other relevant provisions of the Income Tax such as definition of income, total income, tax and find that they do not help the case of the appellant in any manner. Section 2(43) defines Tax to mean income tax chargeable under the provisions of Income Tax Act and Total Income has been defined with reference to Section 5 which enlarges the scope of total income not only to income received or accrued but also deemed to be received or deemed to be accrued in India (for a resident). Simply because the exemption earlier granted to power generating companies has been withdrawn so as to subject them to income tax liability under a special provision, cannot lead to any inference as suggested on behalf of the appellant that it is not an income tax but some other tax which is levied under Section 115JB of the Income Tax Act. Hence we hold the claim for MAT covered by Article 3.8 of the PPA and payable as such when requisite conditions stand satisfied.
Issues Involved:
1. Applicability of the Limitation Act, 1963 to claims before the Andhra Pradesh Electricity Regulatory Commission. 2. Legality of APTEL's order under Section 14 of the Limitation Act. 3. Validity of the claim for reimbursement of Minimum Alternate Tax (MAT) under the Power Purchase Agreement (PPA). Detailed Analysis: 1. Applicability of the Limitation Act, 1963: The primary issue was whether the Limitation Act, 1963, particularly Section 3 and the Schedule, applies to claims before the Andhra Pradesh Electricity Regulatory Commission under Section 86(1)(f) of the Electricity Act, 2003. The Supreme Court held that the Limitation Act does not apply to proceedings before the Commission as it is not a court stricto sensu. However, the court emphasized that the Commission, while exercising its judicial power under Section 86(1)(f), must act in accordance with law and cannot entertain claims barred by limitation in a regular suit or arbitration. The court noted that the Commission has been vested with judicial powers akin to those of a civil court for adjudicating disputes between licensees and generating companies, and hence, it must respect the bar of limitation. 2. Legality of APTEL's Order under Section 14 of the Limitation Act: The second issue concerned the legality of APTEL's order permitting the application of principles emerging from Section 14 of the Limitation Act. The Supreme Court upheld APTEL's decision, stating that the principles underlying Section 14 of the Limitation Act apply to proceedings before quasi-judicial tribunals like the Commission. The court found that APTEL had justly and lawfully excluded the period during which M/s. LANCO was pursuing arbitration proceedings before the High Court, from the notice for arbitration dated 8.9.2003 until the application under Section 11 of the Arbitration Act was disposed of on 18.3.2009. The court rejected the appellant's contention that the continuation of arbitration proceedings after the Gujarat Urja judgment was not bona fide. 3. Validity of the Claim for Reimbursement of MAT: The third issue was whether the claim for reimbursement of MAT is in contravention of the relevant terms and conditions of the PPA. The Supreme Court held that MAT falls under Article 3.8 of the PPA, which provides for claims for taxes on income. The court rejected the appellant's argument that MAT was not foreseen under the tax regime at the time of the PPA and thus not covered by Article 3.8. The court noted that the objective of MAT is to bring "Zero Tax Companies" into the tax net, and it remains a provision under the Income Tax Act, levying income tax on the basis of book profits. The court also dismissed the appellant's contention that MAT liability should be claimed under Article 11.4 of the PPA, which deals with additional costs due to changes in law, stating that Article 3.8 specifically covers all taxes on income, including MAT. Conclusion: The Supreme Court dismissed the appeals, upholding APTEL's order and confirming that the Limitation Act does not apply to proceedings before the Commission, but the Commission must act in accordance with law and cannot entertain time-barred claims. The court also upheld the validity of the claim for reimbursement of MAT under Article 3.8 of the PPA.
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