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TMI Blog2019 (5) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... he Delhi Electricity Supply Undertaking (DESU) was functioning as undertaking of MCD and no Board was in existence. In the DERC Rules, Board was defined to mean DVB constituted under Section 5 of the Supply Act; Rule 2(f) defined DISCOMs to mean as companies with the principal object of engaging in the business of distribution and supply of electricity in the area as specified in Part II of Schedule H. Transferee was been defined in Rule 2(r) to mean GENCO , TRANSCO , DISCOMS and PPCL , in whom the undertaking or undertakings or the assets, liabilities, proceedings and personnel of the DVB stood transferred. The said DISCOMs (M/s NDPL, M/s BSES Rajdhani Power Limited, BSES Yamuna Power Ltd etc) distributed electricity in Delhi during the relevant period and Delhi Transco Ltd. transmitted electricity in Delhi during the relevant period. Therefore, they were licensees or at least deemed to be licensees under the 1910 Act. A conjoint reading of the provisions shows that the Supply Act did not repeal the 1910 Act; instead it stipulated that the provisions of the Supply Act were in addition to and not in derogation of the 1910 Act. Therefore, the deeming provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT APPEAL 18/2016, VAT APPEAL 19/2016, C.M. Appl. No. 31746/2016, VAT APPEAL 20/2016, C.M. Appl. No. 31751/2016, VAT APPEAL 21/2016, C.M. Appl. No. 32217/2016, VAT APPEAL 28/2016, C.M. Appl. No. 36478/2016, VAT APPEAL 15/2017, MR. S. RAVINDRA BHAT 1. The facts and the question of law are common in these appeals, the leading case is that of M/s Schneider India Electric Pvt. Ltd. (hereafter referred as the assessee or Schneider ). The following question of law was framed for these appeals: Did the VAT Tribunal fall into error in upholding the refusal of the Revenue s claim for exemption under Rule 11 for sales made to distribution companies (DISCOMS) for the period prior to 2003-04 (prior to 11.03.2004), in the circumstances of the case? 2. The assessee is engaged in the business of selling various electrical equipments used in the generation and distribution of electricity. It is a registered dealer in the National Capital Territory of Delhi (NCT) with a registration TIN No. 07920179319. For 2003-04 and 2004-05 (hereinafter referred to as the relevant period ), Schneider sold electrical equipments to various undertakings such as M/s Nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Additional Commissioner to decide the matter. The assessing authority denied exemption for the period 2003-04 and raised demand of ₹ 9,16,62,309/- (including interest) by Assessment Order dated 10.09.2009, which was further reduced to ₹ 8,26,75,711/- (tax of ₹ 4,19,67,366/- and interest of ₹ 4,07,08,345) by Rectification Order dated 12.01.2010. As in the case of Schneider, the other assessees too were denied exemptions. 6. Against the demands, the assessees filed appeals before the Special Commissioner. Schneider was directed to make a pre-deposit of ₹ 4,00,04,000/-, against which the assessee approached VAT Tribunal, whereby the pre-deposit was reduced on further challenge before this court, the appeal was directed to be heard without any pre-deposit. For 2004-2005, the assessing authority initially denied exemption and made demands; after exhausting the appellate remedy before the Special Commissioner, it approached the VAT Tribunal, which remitted the matter for fresh consideration. The assessing officer again denied the benefit of exemption and made demands, which were reduced to ₹ 3,23,35,414/- by review order dated 31.03.2006. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ISCOMS under Section 4(2)(vi) of the DST Act read with Rule 11(XII) of the DST Rules, after 11.03.2004. This resulted in liabilities of various amounts. 9. The relevant discussion in the impugned order reads as follows: 100. II) view of the foregoing discussion we are of the view that the Appellants are entitled for claiming deductions from their turnover in respect of sales made to DISCOMS namely Mis North Delhi Power Limited, BSES Rajdhani Power Limited, BSES Yamuna Power Limited under Section 4(2)(vi) of the Delhi Sales Tax ,1975 read with Rule11(xii) of the Delhi Sales Tax Rules 1975 upto 10.03.2004' and in respect of sales made to these DISCOMS on and after 11.03.2004 the day when the Electricity Act 2003 came into force. appellants are not entitled for such deduction/exemption. Accordingly the demands created upto 10.03.2004 are set aside and demands created in respect of sales made on and after 11.03.2004 are upheld and confirmed. Levy of interest being not in accordance with law is also set aside. Ordered accordingly. 10. The details of demand confirmed by the VAT Department are varied in different appeals, given the periods involved and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions. In the meantime, Delhi Electricity Reforms Act, 2000 (hereinafter referred to as the DERC Act ) was enacted with the objective of restructuring the electricity industry (rationalization of generation, transmission, distribution and supply of electricity), improve avenues for participation of private sector in electricity industry. 13. Provisions of the DERC Act (Section 14) enabled creation of companies for generation, transmission and distribution and transfer of existing generating stations, transmission and distribution systems; Section 15 provided for transfer of assets, liabilities, etc. of DVB to the newly formed companies; the transfer of rights was framed under Delhi Electricity Reform (Transfer Scheme) Rules, 2001 (hereinafter referred to as the 2001 Rules ). These Rules were framed in exercise of powers conferred by Section 60 read with Sections 15 16 of the DERC Act. As a consequence of these provisions, three entities, i.e. BSES Yamuna Power Ltd., BSES Rajdhani Power Ltd. and NDPL were created. The DVB got unbundled into six companies naming GENCO, the holding Company, Delhi Transco Ltd., BSES Yamuna Power Ltd., BSES Rajdhani Power Ltd. and NDPL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at with effect from 02.06.2003, the 2003 Act came into force repealing Supply Act. Relying on Section 8 of the General Clauses Act, 1897 it was argued that wherever the Supply Act appeared in DST Rules, the reference is to be to the 2003 Act. Section 8 of the General Clauses Act reads as follows: Construction of references to repealed enactments-(1) Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals or re-enacts, with or without modification, any provision of the former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted. 15. Thus, with effect from 10th June, 2003, the condition for exclusion from turnover under Rule 11(XII) should be so read that the buyer should have a license or sanction granted or deemed to have been granted under the 2003 Act. 16. It is stated that the DISCOMs had licences under the 2003 Act as is also clear from Section 14. The fifth proviso to Section 14 of 2003 Act provides that any company or companies created in pursuance of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tricity are licensees under the 1910 Act or the 2003 act, therefore the Rule 11(xii) applies. As the language of that provision is clear, its benefit cannot be denied. The assessees relied on Hemraj Goverdhan Dass v. Govt. of India1978 (2) ELT J 350 (SC), where it was held that: ............We are unable to accept the contention put forward on behalf of the respondents as correct. On a true construction of the language of the notifications dated July 31, 1959 and April 30, 1960 it is clear that all that is required for claiming exemption is that the cotton fabrics must be produced on power-looms owned by the co-operative society. There is no further requirement under the two notifications that the cotton fabrics must be produced by the co-operative society on the power-looms for itself . It is well established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... city companies) to them certifying that the goods were purchased for use in Delhi directly in the generation/ distribution of electrical energy in Delhi under a license granted under 1910 Act, the benefit cannot be denied on the ground that the provider of the certificate is not eligible for the concession. Reliance was placed on the decisions of the Supreme Court in Chunni Lal Parshadi Lal v. Commissioner of Sales Tax, D.P. Lucknow, (1986) 62 STC 112; State of Madras v. Radio Electricals Ltd, 1966 Supp SCR 198; ITC Ltd v. Collector Central Excise, (2004) 7 SCC 591. 20. Further, the assessees contended that the findings of the tribunal in the impugned order, that on a comparison of the objectives of the two legislation i.e. the 1910 Act and the 2003 Act, showed that they were enacted with different objectives is fallacious. It was urged that the General Clauses Act provides that when an Act which repeals the earlier Act is enacted with or without modification, the reference to the earlier Act will always be considered as reference to the new Act. Thus, having once read the Electricity Act in place of Supply Act after 10th June, 2003 in Rule 11(XII), its benefit canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not enacted subsequently or for that matter any other deeming fiction thereby the distribution companies were headed out to be deemed licensee has been enacted. The exemption/deduction was available to the sellers to any undertaking supplying electrical energy under a license or sanction granted or deemed to have been granted under the 1919 Act. NCT argues that the DISCOM whom the assessees had supplied to were never granted license under the provisions of 1910 Act. It is argued that neither the DERC Act nor the Electricity Act contained a deeming fiction thereby the licenses granted under the DERC or the Electricity Act are deemed licensees under the Indian 1910 Act. The licenses to the abovesaid distribution companies were granted under the DERC Act and Electricity Act and in the absence of any deeming fiction in those Acts, the benefit of said Rule 11 (XII), was not available. 24. It was argued that in a taxing law one has to look merely at what is clearly said and that there is no room for any intent; one can only look fairly at the language is used. The said principle is well settled by various judgements of the Supreme Court which have been extensively quoted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KRBL Ltd. 2012 Online SCC Del 6054, where it was held that: 9. There is one more way of looking at the controversy. The SIL scheme was undisputedly notified under the Foreign Trade (Development and Regulation) Act 1992. Section 28(iiia) brings the profits of sale of license granted under the Imports (Control) Order, 1995, made under the Imports and Exports (Control) Act, 1947, to charge under the head business . The Imports and Exports Control Act, 1947 stood repealed on the enactment of Foreign Trade (Development and Regulation) Act of 1992. Under Section 8 of the General Clauses Act, 1897 where any Central Act made after the commencement of the General Clauses Act, repeals and re-enacts, with or without modification, any provision of the former enactment, then references in any enactment or in any instrument to the provisions, so repealed shall, unless a different intention appears, be construed as references to the provisions so re-enacted. 10. The effect of this is that under Clause (iiia) of Section 28, a reference to Imports and Exports (Control) Act, 1947 should be taken to be a reference to Foreign Trade (Development and Regulation) Act and the scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in s. 2 clause 3, are included all clerical and other establishments of a factory without any exemption has therefore no force. 5. The Factories Act, 1948 defines a worker by s. 2(1) as meaning, a person employed, directly or through any agency, whether for wages or not, in any manufacturing process or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process. And a factory is defined by s. 2(m) as meaning any premises including the precincts thereof wherein a specified number of workers on any day of the preceding twelve months is employed. By the combined operation of these definitions, persons employed in any manufacturing process or in cleaning any part of the machinery or part of the premises used for the manufacturing process or any other kind of work incidental to or connected with the manufacturing process or the subject of the manufacturing process are deemed to be workers in a factory. By the use in s. 2(1) of the Factories Act of the expression, employed in any other kind of wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay; and (d) all ferries, ships, boats and rafts which are used on inland waters for the purposes of the traffic of a railway and belong to or are hired or worked by the authority administering the railway: The 1989 Act defines the said expression in clause (31) of Section 2, which may also be set out: (31) railway means a railway, or any portion of a railway, for the public carriage of passengers or goods, and includes- (a) all lands within the fences or other boundary marks indicating the limits of the land appurtenant to a railway; (b) all lines of rails, sidings, or yards, or branches used for the purposes of, or in connection with, a railway; (c) all electric traction equipments, power supply and distribution installations used for the purposes of, or in connection with, a railway; (d) all rolling stock, stations, offices, warehouses, wharves, workshops, manufactories, fixed plant and machinery, roads and streets, running rooms, rest houses, institutes, hospitals, waterworks and water supply installations, staff dwellings and any other works constructed for the purpose of, or in connection with, railway; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ujarat, Delhi, Allahabad and Madras in Vinod Rao [Vinod Rao v. State of Gujarat, 1980 SCC OnLine Guj 86 : (1980) 1 Guj LR 926] , Sant Ram [Sant Ram v. Delhi State, 1980 SCC OnLine Del 72 : (1980) 17 DLT 490] , Mata Sewak Upadhyay [Mata Sewak Upadhyay v. State of U.P., 1995 JIC 1168 (All)] and P. Ramakrishnan [P. Ramakrishnan v. State, 2010 SCC OnLine Mad 3215 : (2010) 1 LW (Cri) 848] and disapprove the view taken by the High Court of Allahabad in Pankaj Shukla [Pankaj Shukla v. Anirudh Singh, 2011 SCC OnLine All 2442 : (2011) 2 ADJ 472]. 32. The other decisions relied on were State v. Ratan Lal Arora, (2004) 4 SCC 590 and State v. A. Parthiban, (2006) 11 SCC 473. Ratan Lal Arora (supra) ruled that: The argument overlooks the principles underlying Section 8 of the General Clauses Act. When an Act is repealed and re-enacted, unless a different intention is expressed by the legislature, the reference to the repealed Act would be considered as reference to the provisions so re-enacted. 33. Further, the counsel contended that the DISCOMs were licensees under the 2003 Act- in support of this, the assessees relied on Section 14 of the Electricity Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee. It is admitted position that the tax due in the returns was fully paid by the Appellants. Therefore, there was no occasion to impose interest under Section 27 of the DST Act and the same is liable to be accordingly set aside. Arguments on behalf of NCT 35. Counsel for NCT, Mr. Satyakam submitted that for the year 20032004, the assessees claimed to have sold electrical equipment to various undertakings such as the DISCOMs and they are companies engaged in generations/distribution of electricity in Delhi and that they filed return for the assessment year 2003 - 04 claiming deduction from his turnover sales made to above - said companies by relying upon Rule 11 (XII). He submitted that the NCT s position is that such sales were not to any undertaking which has a license or sanction granted or deemed to have been granted under the 1910 Act. The NCT submitted that the assessees plea that DISCOMS were successors of DVB, does not advance their case, for, the exemption provisions are to be applied in their own terms. Rule 11 (XII) of the DST Rules, does not prescribe that exemption would be admissible to the successors of the licensees under the 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purport to convey a meaning which may be obscure. It is impossible even for the most imaginative legislature to forestall exhaustively situations and circumstances that may emerge after enacting a statute where its application may be called for. Nonetheless, the function of the courts is only to expound and not to legislate. Legislation in a modern State is actuated with some policy to curb some public evil or to effectuate some public benefit. The legislation is primarily directed to the problems before the legislature based on information derived from past and present experience. It may also be designed by use of general words to cover similar problems arising in future. But, from the very nature of things, it is impossible to anticipate fully the varied situations arising in future in which the application of the legislation in hand may be called for, and, words chosen to communicate such indefinite referents are bound to be in many cases lacking in clarity and precision and thus giving rise to controversial questions of construction. The process of construction combines both literal and purposive approaches. In other words, the legislative intention i.e. the true or legal meani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct shall be determined and the sales turnover which may be deducted under sub clause (vi) of clause (a) of sub-section (2) of section 4 Section 66 of the DST Act provides as under; - Exemptions (1) If the Administrator is of opinion that it is necessary or expedient in the public interest so to do, he may, with the previous approval of the Central Government, exempt, by notification in the official Gazette, and subject to such conditions, if any, as he may impose any specified class of sales by any specified class of dealers from payment of the whole or any part of the tax payable under this Act. (2) If in respect of any sales which are exempt from payment of tax under sub-section (1), a breach of any of the conditions subject to which such exemption was granted is committed, the dealer responsible for such breach shall be liable to pay tax in respect of all such sales as if no such exemption had been granted. 39. Rule 11(XII) of the DST Rules prescribes the list of such other sales which may be deducted from the turnover by a dealer. Clause XII of Rule 11 which is relevant for the purposes of this writ is extracte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed. Analysis and conclusions 40. The question that needs to be decided is whether the authorities have been justified in holding that the DISCOMs., viz BSES, BSES (Y), NDPL and Transco to whom the assessees had made sales were not undertakings supplying electricity. Halsbury's Laws of England, 3rd Edition, Volume VI (1954), defines 'undertaking' as: .. though various ingredients make up an undertaking, the term describes not just the ingredients but the completed work from which earnings arise. The Law Lexicon Dictionary (Page 1932) defines' undertaking as: as any business or any work or project which one engages in or attempts as an enterprise analogous to business or trade. 41. In P. Alikunju, M. A. Nazeer Cashew Industries v Commissioner of Income Tax (1987) 166 ITR 80 , it was held that undertaking means an enterprise, venture or engagement . In Ansal Housing and Construction Ltd. v Commissioner of Income Tax185 Taxman 74 (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interpretation of statutes, the literal rule is the often invoked rule pressed into action to ascertain the legislative intention behind the framing of the enactment. The rule governs and regulates the meaning of the law in as much as the rule provides that the meaning has to be ascertained from the text of the law itself. 43. In Mis Hiralal Ratanlal vs. STO, AIR 1973 SC 1034, the Apex Court observed: In construing a statutory provision the first and foremost rule of construction is the literal construction. All that the Court has to see at the very outset is what does the provision say. If the provision is unambiguous and if from the provision the legislative intent is clear, the Court need not call into aid the other rules of construction of statutes. The other rules of construction are called into aid only when the legislative intent is not clear. We have noticed that the Words Any Undertaking in respect of sales made to Electricity Undertakings has been used for the First time in the Bengal Finance (Sales Tax) Act of 1941. At that point of time the Electricity Act of 1948 was not in force. 44. In Shiv Shakti Co-operative Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cting interest of consumers. and supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and matters connected therewith or incidental thereto. 46. The 1910 Act was the first Act in India which codified and created rights and obligations in regard to generation and distribution of electricity; thereafter, the Supply Act, was enacted. The objective of the Supply Act was to create Electricity Boards throughout India. This is evident from the statement of objects and reasons to the Supply Act, reproduced below: The coordinated development of electricity in India on a regional basis is a matter of increasingly urgent importance for post-war re-construction and development. The absence of coordinated system, in which generation is concentrated in the most efficient units and bulk supply of energy centralized under the direction and control of one authority is one of the factors that impedes the healthy and economical growth of electr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading corporation within the meaning of entry 33 of the Federal Legislative List. 47. The Electricity Act 2003 was enacted with effect from 10th June 2003. This Act was comprehensive and it consolidated the provisions of all the three Acts, i.e. the 1910 Act, the Supply Act, and the Electricity Regulatory Commission Act, 1998.All the said three Acts were repealed, and consolidated in one enactment, namely the Electricity Act 2003. The Preamble to the 2003 Act states as follows: An Act to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto. 48. From the relevant provisions, it is clear that the Delhi Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of electricity in Delhi, in the same manner as the Board was entitled to exercise prior to the effective date of the transfer. (2) Within sixty days of the effective date of transfer, the DISCOMS, shall apply to the Commission for the grant of licence under the Act to undertake the business of distribution and retail supply of electricity in the respective areas of supply as specified in Schedule H: Provided, however, that on and from the effective date of the transfer and till the grant of licence by the Commission, the DISCOMS shall be entitled to exercise the rights and powers exercisable by the board under the Electricity (Supply) Act, 1948 (54 of 1948), and undertake the business of distribution and retail supply of electricity in the respective areas of supply as specified in Schedule H , in the same manner as the Board was entitled to, prior to the effective date of the transfer. 50. In the DERC Rules, Board was defined to mean DVB constituted under Section 5 of the Supply Act; Rule 2(f) defined DISCOMs to mean as companies with the principal object of engaging in the business of distribution and supply of electricity in the area as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envisaged. They were to supply electricity to consumers in their respective areas. Delhi Vidyut Board was the licensee under 'the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948. From the date of transfer, the distribution companies were empowered to exercise all rights and powers of Delhi Vidyut Board. Within 60 days of the date of transfer, the distribution companies had to apply to DERC for a formal license but till such time the license was granted, the distribution companies were empowered to act in terms of the powers of the Delhi Vidyut Board as a licensee. 55. Therefore, w.e.f. 1.7.2002, the respondent took over the rights and obligations of Delhi Vidyut Board as a licensee in respect of supply/distribution of electricity to the consumers in the area of its jurisdiction. The deemed license of the Delhi Vidyut Board as a licensee as per Section 26 of the Electricity (Supply) Act, 1948 became the license of the respondent: Needless to state, the licensed area was the area assigned to the respondent. In terms of Section 26 of the Electricity (Supply) Act, 1948 read with Rule 10(2) of the Delhi Electricity Reforms (Transfer Scheme) Rules, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and was vested with the powers of the licensee under the Indian Electricity Act, 1910, Electricity (Supply) Act, 1948 and the rules framed thereunder. 93. Needless to state, the Delhi Electricity Reforms Act,2000 continues to apply in the National Capital Territory of Delhi, save and except its provisions are not inconsistent with the Electricity Act, 2003. 94. The legal position, therefore, would be that by virtue of the Delhi Electricity Reforms Act, 2000 and the rules framed there under, powers of the licensee under the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 continue to ensure to the licensees in Delhi, save and except where the same are inconsistent with the provisions of Electricity Act, 2003. In the context of meters, the changed legal position would be the one contemplated by Section 55 of the Electricity Act, 2003. Meaning thereby that henceforth, powers to determine specifications of a correct meter stand vested in the Authority constituted under Section 70 of the Electricity Act, 2003. Power to be exercised by way of regulations framed. The language of Section 55 itself shows that till the regulations are framed the old ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of one year from the date of commencement of the said Act. In so far as first aspect is concerned, the argument of the Appellant loses sight of the fact that in the first proviso the period for which any person can be a deemed licensee is not only such period which is stipulated in the licence, clearance or approval granted to him under the repealed laws or such Act specified in the Schedule. It also provides that the provisions of repealed laws or such Act specified in the Schedule in respect of such a licence shall apply for a period of one year from the date of commencement of Act 2003 or such earlier period as may be specified at the request of the licensee by the Regulatory Commission. In the present case, the Regulatory Commission formulated MERC (Specific Conditions of License Applicable to TPCL) Regulation 2008 i.e. Specific Licence Conditions. These were formulated Under Section 16 of the Act 2003 and it is in these conditions there is a specific stipulation regarding term of TPC licence up to 15.8.2014. We, therefore, are unable to accept the submissions of the Appellant that the licence was valid for a period of one year only. It would be useful to refer to Section 16 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Regulatory Commission under its statutory powers and therefore are having statutory force. Once, we come to the conclusion that TPC can be treated as deemed distribution licensee under the first proviso to Section 14 of the Act 2003 and the area of the licence is the same which overlaps with the area covered by BEST, argument predicated on sixth proviso to Section 14 would not be available to the BEST. 56. Section 172 of the 2003, which is the transitional provision, reads as follows: Section 172. (Transitional provisions): Notwithstanding anything to the contrary contained in this Act,- (a) a State Electricity Board constituted under the repealed laws shall be deemed to be the State Transmission Utility and a licensee under the provisions of this Act for a period of one year from the appointed date or such earlier date as the State Government may notify, and shall perform the duties and functions of the State Transmission Utility and a licensee in accordance with the provisions of this Act and rules and regulations made thereunder: Provided that the State Government may, by notification, authorise the State Electricity B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Act. (b) the provisions contained in sections 12 to 18 of the Indian Electricity Act, 1910 and rules made thereunder shall have effect until the rules under section 67 to 69 of this Act are made;. (c) the Indian Electricity Rules, 1956 made under section 37 of the Indian Electricity Act, 1910 as it stood before such repeal shall continue to be in force till the regulations under section 53 of this Act are made. (d) all rules made under sub-section (1) of section 69 of the Electricity (Supply) Act, 1948 shall continue to have effect until such rules are rescinded or modified, as the case may be; (e) all directives issued, before the commencement of this Act, by a State Government under the enactments specified in the Schedule shall continue to apply for the period for which such directions were issued by the State Government. (3) The provisions of the enactments specified in the Schedule, not inconsistent with the provisions of this Act, shall apply to the States in which such enactments are applicable. (4) The Central Government may, as and when considered necessary, by notification, amend the Schedule. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween referential legislation which merely contains a 'reference to, or citation of, a provision of another statute and a piece of referential legislation which incorporates within itself a provision of another statute. In the former case, the provision of the second statute, along with all its amendments and variations from time to time, should be read into the first statute. In the latter case, the position will be as outlined in Narasimhan 1976 1 S.C.R. 61 where, after-referring to Secretary of State v. Hindustan Cooperative Insurance Society Ltd. 1931 58 I.A. 259 , this Court summed up the position thus: On a consideration of these authorities, therefore, it seems that the following proposition emerges: Where a subsequent Act incorporates provisions of a previous Act then the borrowed provisions become an integral and independent part of the subsequent Act and are totally unaffected by any repeal or amendment in the previous Act. This principle, however, will not apply in the following cases: (a) where the subsequent Act and the previous Act are supplemental to each other; (b) where the two Acts are in part materia; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sferred to different entities, such as generation, transmission and distribution of electricity. By virtue of operation of Sections 14, 16 (2), 16 (3) read with Rules 3, 4 and 5 of the Transfer scheme Rules, 2001, the undertaking and activities of the DVB devolved, by operation of law, upon the respective DISCOMs. In this context, it is useful to quote from Workmen Of American Express vs Management of American Express Corporation AIR 1986 SC 458 where the Supreme Court observed that Judges ought to be more concerned with the 'colour', the 'content' and the 'context' of such statutes. (We have borrowed the words from Lord Wilbei force's opinion in Prenn v. Simmonds 1971 (3) AER 237). In the same opinion Lord Wilberforce pointed out that law is not to be left behind some island of literal interpretation but is to enquire beyond the language, un-isolated from the matrix of facts in which they are set; the law is not to be interpreted purely on internal linguistic considerations. 64. Adopting the NCT s argument, in the opinion of the court would entirely defeat the intent of the DST Rules, which was to allow a deduction from turno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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