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TMI Blog2022 (9) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... d payment of duty. Thus, the amount collected by the licensee as electricity duty leviable under 1958 Act is required to be deposited in the Government treasury by the licensee. Section 43B is a non-obstente clause. As inserted by Finance Act, 1983 with an intent to curb the malpractice at the hands of certain tax payers, who claimed statutory liability as a deduction without discharging the same and pleaded mercantile system of accounting as defence. The argument raised by counsel for the appellant(s) that Section 43B will be attracted merely for the reason that the appellant(s) is following mercantile system of accounting deserves to be rejected. The revenue is required to show that the duty, tax, cess or fee (in the present case electricity duty) is payable by the assessee. The reliance placed on judgment passed by Gujarat High Court in Ahmedabad Electricity Co. Ltd.'s case [ 2003 (1) TMI 43 - GUJARAT HIGH COURT] is misplaced. Rather Section 4 of the 1958 Act read with provisions contained in 1958 Rules makes it abundantly clear that assessee is merely an agency assigned with a statutory function to collect electricity duty from the consumers and to pay the same to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. As per section 43B(a) of the 1961 Act, a deduction otherwise allowable under the Act in respect of any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in Section 28 of the previous year in which such sum is actually paid by him. 8. Thus, the question arises as to whether the amount towards electricity duty is payable by the assessee or it is merely a collection agency discharging its duty under a statutory arrangement. 9. In the year 1958, State legislature enacted the Punjab Electricity (Duty) Act, 1958. Section 2(b), (d), 3, 4, 5, 9 and 10 read as 3 of 11 under:- 2. Definitions.- In this Act, unless the context otherwise requires,- (b) consumer means a person, other than a licensee, who is supplied with energy- (i) by a licensee; or (ii) by the Board; 3. Electricity duty on energy supplied to consumer or licensees by Board, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se may be (b) to any other category of consumers and such a consumer uses any part of the energy so sold to him for a domestic or commercial purpose, - (i) where a separate meter is installed for measuring energy so used for domestic or commercial purpose, the rate of electricity duty on the part of the energy so used per unit shall be as notified under clause (i) or clause (ii), as the case may be, and (ii) where a separate meter is not installed for measuring energy so used for domestic or commercial purpose, the rate of electricity duty on the whole of energy so supplied including the energy so used, per unit shall be as notified under clause (i), and (c) to any consumer, through a temporary connection or a temporary extension of an existing connection for the purpose of illumination on the occasion of a marriage or other religious or social function, the rate of electricity duty, on the energy so sold per unit shall be as specified in clause (iv).] (2) There shall be levied for and paid to the State Government the electricity duty at the rate of one and half naye paise per unit also by - (a) a licensee generating energy himself or the energy supplied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r by the Board or a licensee or a person generating energy for his own use or consumption to the State Government, shall be recoverable as an arrears of land revenue or by deduction from amounts payable by the State Government to the Board or the licensee or such person. 10. Power to disconnect supply for nonpayment of duty.- Where a consumer or a licensee fails to pay the electricity duty to the Board or a consumer fails to pay such duty to a licensee who is authorised to recover the duty from the consumers under section 5, the Board or the licensee may exercise the power conferred on a licensee by subsection (1) of section 24 of the Indian Electricity Act, 1910, for the recovery of any charge or sum due in respect of energy supplied by it or him. 10. From the bare reading, it is thus clear that the liability to pay electricity duty lies on the consumer. Further, the electricity duty is to be paid to the State Government. 11. Section 4 casts duty on the licensee to collect the electricity duty from the consumers and to pay the same to the State Government. Licensee is only a collecting agency. It will be further apposite to notice here that exercising powers under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contained in 1958 Rules makes it abundantly clear that assessee is merely an agency assigned with a statutory function to collect electricity duty from the consumers and to pay the same to the State Government. Calcutta High Court in ITA No.82 of 2004, decided on 14.05.2015 titled as 'CESE Ltd. vs. CIT-II, Kolkata' reported as (2003) 262 ITR 9, after examining provision of Bengal Electricity Duty Act, 1935 held that:- xx xx xx 19. Thus, in our view, the electricity duty, not being a sum payable by the assessee as a primary liability by way of tax, duty, cess or fee, Section 43B is not attracted to the licensee/assessee in respect of electricity duty collected by it for being passed on the State Government. 15. In view of the discussion held hereinabove, we find that the question w.r.t. the applicability of Section 43B on the electricity duty, needs to be answered against the revenue and in favour of the assessee. 16. Resultantly, present appeals are dismissed. 17. Since the main appeals have been decided, the pending civil miscellaneous applications, if any, also stand disposed off. 18. A photocopy of this order be placed on the files of other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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