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TMI Blog2016 (12) TMI 1363X X X X Extracts X X X X X X X X Extracts X X X X ..... ) that is, firstly, energy sold to a consumer by a licensee and, secondly, energy sold to a consumer by a person who generates energy - The petitioners are evidently not a licensee in the matters in hand, they are certainly not selling energy to the consumer; rather they are selling it to the BSEB, which is a licensee under Section 2(d) and which in turn sells the energy for ultimate consumption. Where the generator of energy does not directly receive payment of charges from the consumer, it can be covered within the purview of Section 2(ee) (i) of the Act. In this regard one should also bear in mind that the provision of a taxing statute should be strictly construed, and the benefit of any ambiguity must go to the assessee - Therefore, even on the ground of the applicability of the charging provision it has to be held that the charging provision under Section 3(1) read with the definition of ‘consumer’, ‘licensee’ and ‘value of energy’ as provided in the Act cannot be used to levy any tax on a generating company supplying energy to a licensee like the Electricity Board as in the present matter, as no tax can be computed in their cases - Decided in favor of the assessee. - Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the respondent-Bihar State Electricity Board. The facts may be noted from CWJC No. 17429 of 2014 as the representative case with regard to the 11 writ applications. The petitioner-NTPC is generating energy and selling it to various Electricity Boards in the country including the respondent-Bihar State Electricity Board (BSEB) as per the power supply agreement dated 25.5.1993 and power purchase agreements dated 12.6.2003. Neither of the petitioners are selling energy to any consumer except to the respondent-BSEB inside the state and to the other State Electricity Boards outside. Earlier there was a dispute between the NTPC and the respondent-State with regard to the sale of electricity made outside the State which was challenged before this Court in CWJC No. 2483/1998 and the orders of the assessing authority was quashed by order dated 14.12.2010 and the matter was remanded back to the assessing authority to pass fresh order, whereupon the petitioners appeared before the Assistant Commissioner and filed statement on 17.3.2011 with regard to the total energy sold and by his assessment order dated 4.4.2011 for the period 2008-09 duty was imposed on consumption of energy in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate through its second supplementary counter affidavit filed in the connected CWJC No. 17306/2014 came out with a copy of notification bearing No. 72 dated 15.5.2015 by which various provisions of Bihar Electricity Duty Rules were amended through the powers conferred by Section 10 of the Bihar Electricity (Amendment) Rules, 2015 under the said notification including the definition of Inspecting Officer and in the procedural Rules relating to assessment in which the Commercial Taxes Officer was also included. The amendments were to come into force with effect from 23.6.2005 so as to cover the entire periods for which assessment has been made by the Commercial Taxes Officer, Bhagalpur. Although the amendments have been formally challenged, but the matter has been argued essentially on the merits of the cases with regard to the very liability of the petitioners to be assessed under the existing provisions of the Bihar Electricity Duty Act. Learned counsel for the petitioners submits that under Section 3(1) of the Act read with the definition of consumer , licensee and value of energy as contained in Sections 2(b), (d) and (ee) of the Act, the petitioners do not at all come wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea for consumption, use or sale therein at such rate not exceeding 5 per centum of the import value of such goods as may be specified by the State Government in a notification published in a official gazette subject to such conditions as may be prescribed: Provided different rates for different scheduled goods and different local areas may be specified by the State Government. (2) The tax leviable under this Act shall be paid by every dealer liable to pay tax under Bihar Finance Act, 1981 or any other person who brings or own account or on account of his principal or takes delivery or is entitled to take delivery of such goods on such entry: Provided no tax shall be leviable in respect of entry of scheduled goods effected by a person other than the dealer if, the value of such goods does not exceed 25 thousands in a year. (3) Notwithstanding anything contained in sub- section (1) and (2) of this section and subject to the provisions of this Act there shall be levied and collected a tax on the entry of any motor vehicle into any local area for use or sale therein which is liable for registration in the State under the Motor Vehicles Act, 1988. The rate of tax sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present judgment. If any excess amount has been paid, such amount may be adjusted against the future bills. It is stated that on account of the Section 3(1) having been struck down, the new definition clause with regard to the Value of Energy has been introduced. However, it is submitted by learned counsel that it is evident from the said definition clause read with the provisions of the charging Section 3(1) of the Act and the definition of consumer and licensee that the petitioners are in no way liable to payment of any electricity duty, as they do not come within purview of the Act. It is urged that under Section 3 of the Act the electricity duty is levied and paid to the State Government at 6% either on the units or the value of energy consumed or sold at the rate or rates to be specified by the State Government by notification. It is pointed out that the notification dated 21.10.2002 provided for rate of electricity duty at 6 per centum of the value of energy consumed or sold for any purpose other than irrigation. Since this Court had held that there was no guideline with regard to the meaning of the term value of energy and it struck down, the provisions of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the same, learned counsel relies upon a decision of the Supreme Court in the case of Hansraj Sons Vs. State of Jammu Kashmir Ors.: (2002) 6 SCC 227, in paras 22 to 25 of which it has been held as follows:- 22. A constitution Bench of this Court in the case of A.V.Fernandez V. State of Kerala: AIR 1957 SC 657: 1957 SCR 837 observed: (AIR p. 661, para 29). 29. It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. We must of necessity, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can come to the conclusion that the appellant was liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the decision referred to above are well established and admit of no doubt. It is also submitted by learned counsel that the three ingredients of a taxing statute are the subject of tax, the person liable to pay the tax and the rate of tax which is to be paid and in the absence of any one of the ingredients, there can be no levy of the tax. In support of the said proposition, learned counsel relies upon a decision of a Constitution Bench of the Supreme Court in the case of Mathuram Agrawal Vs. State of Madhya Pradesh: (1999) 8 SCC 667, in the relevant part of para-12 of which it was held as follows:- The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , where under each head of income the charging provision is accompanied by a set of provisions for computing the income subject to that charge. The character of the computation provisions in each case bears a relationship to the nature of the charge. Thus the charging section and the computation provisions together constitute an integrated code. When there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section. Otherwise one would be driven to conclude that while a certain income seems to fall within the charging section there is no scheme of computation for quantifying it. The legislative pattern discernible in the Act is against such a conclusion. It must be borne in mind that the legislative intent is presumed to run uniformly through the entire conspectus of provisions pertaining to each head of income. No doubt there is a qualitative difference between the charging provision and a computation provision. And ordinarily the operation of the charging provision cannot be affected by the construction of a particular computation provision. But the question here is whether it is possible t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s goods. The definition of goods as given in Article 366(12) of the Constitution was considered by this Court and it was held that the definition in terms is very wide according to which goods means all kinds of moveable property. The term moveable property when considered with reference to goods as defined for the purpose of sales-tax cannot be taken in a narrow sense and merely because electrical energy is not tangible or cannot be moved or touched like, for instance, a piece of wood or a book it cannot cease to be moveable property when it has all the attributes of such property. It is capable of abstraction, consumption and use which if done dishonestly is punishable under Section 39 of the Indian Electricity Act, 1910. If there can be sale and purchase of electrical energy like any other moveable object, this Court held that there was no difficulty in holding that electric energy was intended to be covered by the definition of goods . However, A.N. Grover, J. speaking for three-Judge Bench of this Court went on to observed that electric energy can be transmitted, transferred, delivered, stored, possessed etc. in the same way as any other moveable property . In this obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of electricity as goods are of immense relevance as we would state hereafter. List II, Entries 53 and 54, how to be read: 22. We now come to the question on the interpretation of Entry 53 in List II of Seventh Schedule. It provides for taxes on the consumption or sale of electricity. The word 'sale' as occurring in Entry 52 came up for the consideration of this Court in Burmah Shell Oil Storage Distributing Co. India Ltd. v. The Belgaum Borough Municipality AIR1963SC906 . It was held that the act of sale is merely the means for putting the goods in the way of use or consumption. It is an earlier stage, the ultimate destination of the goods being use or consumption . We feel that the same meaning should be assigned to the word 'sale' in Entry 53. This is for a fortiori reason in the context of electricity as there can be no sale of electricity excepting by its consumption, for it can neither be preserved nor stored. It is this property of electricity which persuaded this Court in Indian Aluminium Co. etc's case (supra) to hold that in the context of electricity, the word 'supply' should be interpreted to include sale or consumption of electr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries in the lists may overlap and sometimes may also appear to be in direct conflict with each other. It is then the duty of this Court to reconcile the entries and bring about harmony between them. The Court should strive at searching for reasonable and practical construction to seek reconciliation and give effect to all of them. If reconciliation proves impossible the overriding power of Union Legislature operates and prevails. Gwyer, C.J. observed: A grant of the power in general terms, standing by itself, would no doubt be construed in the wider sense; but it may be qualified by other express provisions in the same enactment, by the implication of the context, and even by considerations arising out of what appears to be the general scheme of the Act. And again he said, an endeavour must be made to solve it, as the Judicial Committee have said, by having recourse to the context and scheme of the Act, and a reconciliation attempted between two apparently conflicting jurisdictions by reading the two entries together and by interpreting, and, where necessary, modifying the language of the one by that of the other. If needed such a reconciliation should prove imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision has to be read as and so as to keep it in accord with other provisions of the Act and so interpreted, the liability of the petitioners for payment of duty is certainly there. Learned counsel also submits that the decision of the Apex Court in NTPC s case (supra) is not at all relevant as the same was a case of inter-State sale. We have considered the submissions of learned counsels for the parties. It is difficult to accept the submission of learned counsel for the State that the decision of the Apex Court in NTPC s case (supra) is not relevant in the present matter as that was a case of inter-State sale. In our view the constitutional propositions discussed in the said case based upon a long line of earlier decisions of the Apex Court, are something which cannot be ignored merely because it was a case of inter-State sale, while the fact of the matter remains that the Apex Court has interpreted Entry 53 to be read as taxation on the consumption or sale for consumption of electricity. That being the position whether the tax levied is under Entry 53 of List II as a tax on consumption or sale for consumption of electricity, or under Entry 54 of List II as taxes on sale or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rstly, energy sold to a consumer by a licensee and, secondly, energy sold to a consumer by a person who generates energy. Since we are not concerned with the 2nd type of case mentioned in sub-clause (ii) with regard to the person generating energy consuming the same, the only circumstance under which a generation company like the petitioners or any other person who generates energy would be liable for payment of electricity duty would be when it sells the energy to the consumer itself. The petitioners are evidently not a licensee in the matters in hand, they are certainly not selling energy to the consumer; rather they are selling it to the BSEB, which is a licensee under Section 2(d) and which in turn sells the energy for ultimate consumption. The submission in this regard of learned counsel for the State does serious violence to the provisions of the Act as it stands by submitting that the word or in Section 2(ee) should be read as and since even the second part of sub-clause (i) provides for the charges payable by the consumer either to the licensee or to the person who generates such energy. Thus in no case where the generator of energy does not directly receive payment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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