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PETITIONER: RAJASTHAN STATE ELECTRICITY BOARD

       Vs.

RESPONDENT: CESS APPELLATE COMMITTEE AND ANR. ETC.

DATE OF JUDGMENT08/10/1990

BENCH: AHMADI, A.M. (J) BENCH: AHMADI, A.M. (J) RANGNATHAN, S.

CITATION:  1991 AIR  597            1990 SCR  Supl. (2) 120  1991 SCC  (1)  93        JT 1990 (4)   123  1990 SCALE  (2)750  CITATOR INFO :  R          1992 SC 224  (19)

ACT:     Water (Prevention & Control of Pollution) Act,  1974/The Water  (Prevention  and  Control  of  Pollution)  Cess  Act, 1977/The  Water (Prevention and Control of  Pollution)  Cess Rules,  1978.  Sections  25(1),  26/Section  7/Rule  6-Trade effluent--Treatment  of--Liability  to  pay  cess--Grant  or refusal of rebate----Role of Assessing Authority.

HEADNOTE:     The Water (Prevention & Control of Pollution) Act,  1974 was  enacted  inter alia to provide for the  prevention  and control of water pollution, the maintaining or restoring  of wholesomeness  of  water, etc. Section 25 of  the  said  Act provides  that  no person shall without the consent  of  the State  Board, bring into use any new or altered  outlet  for the  discharge of sewage or trade effluent into a stream  or well, or begin to make any new discharge of sewage or  trade effluent  into a stream or well. Section 26 lays  down  that persons  discharging sewage or trade effluent into a  stream or  well before the commencement of the Act shall apply  for consent within a period of three months of the  Constitution of State Board. Thereafter the Water (Prevention and Control of Pollution) Cess Act, 1977 was enacted to provide for  the levy  and  collection of cess on water consumed  by  persons carrying  on  certain industries, Power (Thermal  &  Diesel) Generating  Industry was one such industry included at  item No.  14 in Schedule I to the Act. Section 3 of the 1977  Act provides that there shall be levied and collected a cess for the purposes of the 1974 Act and utilisation thereunder. The cess under the Act is made payable by every person  carrying on any specified industry and the same has to be  calculated on the basis of the water actually consumed at rates  speci- fied  in  the Schedule. Section 7 of the  Act  provides  for rebate.     The appellant has established a Thermal Power Station on the bank of River Chambal for generating energy. It consumes water from the river for condensor cooling. After the  water is  used for cooling, it is treated as a trade  effluent  in the  neutralisation plant before it is discharged  into  the

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river. According to the appellant, the temperature, 121 after following the prescribed procedure, is brought down to below     40  C, when it is discharged into the river. The  appel- lant  had  also installed a 0.4 MGD plant for  treatment  of sewage.  According  to the appellant both these  plants  are working  satisfactorily. The appellant, as required  by  the rules, submitted monthly returns of the water consumed  from the  river for its Thermal Station for the period from  July 1983  to  January 1984 and February 1984 to June  1984.  The respondent authority. assessed the cess at Rs.13,13,710  for the first period and Rs.9,42,013 for the subsequent  period. No rebate was allowed under Section 7 of the 1977 Act on the ground  that  the so-called neutralisation plant was  not  a plant  for the treatment of sewage or trade effluent  within the meaning of the said provision.     The  appellant  filed  an appeal under  section  13,  in respect  of  the cess claimed for the period  July  1983  to January 1984, but the appellate authority dismissed the same holding  that the cess was correctly assessed and  that  the appellant was not entitled to rebate. As regards the  period from  February 1984 to June 1984. the appellant submitted  a review  petition  which was rejected by  respondent  No.  2. Thereupon,  the  appellant  filed  separate  writ  petitions before  the  High Court challenging the  assessment  orders. Both  the writ petitions were dismissed by the  High  Court. The  High Court opined that there was nothing on  record  to show that the appellant had applied for consent of the State Board to install a plant either under section 25 or  section 26  of the 1974 Act nor was there any evidence to show  that such consent was given. It accordingly held that the author- ities  under  the Act had rightly disallowed  the  claim  of rebate to the appellant under section 7. Against the  orders of the High Court as also against various assessment  orders which were passed subsequent to the orders of the High Court the  appellant  has  filed these  appeals,  after  obtaining special leave.     Allowing  the  appeals, and remanding the cases  to  the Assessing Authority for fresh disposal, this Court     HELD:  A  plant has undoubtedly been installed  for  the treatment  of  sewage  and no dispute  in  that  behalf  was raised.  However, as the bulk consumption of water from  the river is used at the condensor cooling plant the question is whether the appellant can be said to have installed a  plant for the treatment of a trade effluent. [130G]     The  Appellate  Authority took the view that a  150  fl. long channel meant for carrying the trade effluent cannot be described  as treatment plant. The appellant contended  that the treatment plant installed 122 by  it  comprised of an arrangement to lift the water  to  a height  of 2211. and then drop it from that height  into  an open channel so that it cools down on coming in contact with the  atmosphere and then flows towards and into  the  river. [130H; 131A]     Section 7 as well as Rule 6 do not envisage the  Board’s consent under Section 25(1) of the 1974 Act as a  sine-clua- non.  Under Section 7 the consumer has only to show that  he has  installed a plant for the treatment of sewage or  trade effluent  and  that it functioned  successfully  during  the relevant period to earn rebate. Section 25(1) operates in  a different field and has nothing to do with a plant installed for the treatment of a trade effluent although the grant  of consent to a new outlet can be conditional on the  existence

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of  a plant for the satisfactory. treatment of effluents  to safeguard  against  pollution of the water  in  the  stream. [131C-E]     Since  the Board’s consent under Section 25(1)  was  not imperative  that  part of the High Court’s order  cannot  be sustained. [131E]

JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil  Appeal Nos. 4843-44 of 1990.     From  the  Judgment and Order dated  28.10.1988  of  the Rajasthan  High Court in D.B. Civil W.P. No 966of  1986  and 121 of 1985.     Dr. L.M Singhvi, P. Agarwal, S.K. Jain, Sahid Rizvi  and D.K. Singh for the Appellant.     N.S. Hegde, Additional Solicitor General, J.D. Jain,  R. Mohan,  R.A. Perumal, Hemant Sharma, Ms. A.  Subhashini  and Ms. Sushma Suri for the Respondents. The Judgment of the Court was delivered by AHMADI, J. Special leave granted in all the cases.     Pursuant  to  the  resolution passed  by  certain  State Legislatures  including that of Rajasthan under clause 1  of Article  252  of the Constitution,  Parliament  enacted  The Water  (Prevention & Control of Pollution) Act,1974 (Act  VI of  1974), (hereinafter called the ’1974 Act’),  to  provide for  the  prevention  and control of  water  pollution,  the maintaining  or  restoring of wholesomeness  of  water,  the establishment 123 of Boards for the prevention and control of water pollution, the  conferring on and assigning to such Boards  powers  and functions relating thereto and for matters connected  there- with.  ’Pollution’, as defined in section 2(e), means  "such contamination  of  water  or such  alteration  of  physical, chemical or biological properties of water or such discharge of  any  sewage or trade effluent or of  any  other  liquid, gaseous  or solid substance into water as may, or is  likely to, create a nuisance or render such water harmful or  inju- rious  to public health or safety, or to  domestic,  commer- cial, industrial, agricultural or other legitimate uses,  or to  the life and health of animals or plants or of  acquatic organisms".  "Sewage  effluent" according  to  section  2(g) means "effluent from any sewerage system or sewage  disposal works and includes sullage from open drains". "Trade  efflu- ent" according to Section 2(k) includes "any liquid, gaseous or  solid  substance which is discharged from  any  premises used  for  carrying  on any trade or  industry,  other  than domestic  sewage". Section 3, 4 and 13 provide for the  con- stitution  of  a Central Board, a State Board  and  a  Joint Board, respectively. Section 16 enumerates the functions  of the Central Board constitution for promoting cleanliness  of streams  and wells in different areas of the State.  Section 17 sets out the functions of the State Board which,  amongst others, include preparing a comprehensive programme for  the prevention, control or abatement of pollution of streams and wells  in the State and for securing its execution;  inspec- tion of sewage or trade effluents, works and plants for  the treatment  of sewage and trade effluents:  evolving  methods for  treatment  of sewage and trade effluents  and  for  the disposal  thereof and laying down standards of treatment  of sewage and trade effluents to be discharged into any partic- ular  stream. Sections 21 and 22 confer power on  the  State Board or any officer empowered by it to take for the purpose

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of  analysis  samples of water from any stream  or  well  or samples  of  any sewage or trade effluent which  is  passing from  any plant or vessel or from any other place  into  any stream  or well and to send the samples for analysis to  the Laboratory established or recognised for that purpose by the concerned Board. Section 24 prohibits the use of any  stream or  well for the disposal of polluting matters.  Section  25 imposes  restrictions  on new outlets  and  new  discharges. Section 25(1) reads as under: "Subject to the provisions of this section, no person shall, without the previous consent of the State Board, bring  into use any new or altered outlet for the discharge of sewage or trade  effluent into a stream or well, or begin to make  any new  discharge of sewage or trade effluent into a stream  or well." 124 Under these provisions the application for consent has to be made  to the State Board in the prescribed  form  containing the  particulars  relating  to  the  proposed  construction, installation  or  operation  of any  treatment  or  disposal system or of any extension or addition thereto.  Sub-section (7), which is relevant for our purpose, reads as under: "The  consent referred to in sub-section (1)  shall,  unless given  or  refused  earlier, be deemed to  have  been  given unconditionally on the expiry of a period of four months  of the making of an application in this behalf complete in  all respects to the State Board." Section 26 provides that persons discharging sewage or trade effluent  into a stream or well before the  commencement  of the  Act  shall apply for consent within a period  of  three months of the constitution of the State Board. If the  State Board refuses to grant consent or withdraws consent  already granted  an appeal is provided to the  appellate  authority. Section 29 confers revisional powers on the State Government to call for the records of any case where an order has  been made by the State Board under Sections 25, 26 and 27 for the purpose of satisfying itself as to the legality or propriety of  any such order. Failure to comply with the  requirements of  the statute is punishable under Chapter VII. Thus,  this law aims at prevention and control of water pollution.     On 7th December. 1977, the President gave his assent  to the  Water  (Prevention  and  Control  of  Pollution)   Cess act,1977(Act No. XXXVI of 1977), (hereinafter referred to as ’the  1977  Act’). This Act was enacted to provide  for  the levy  and collection of a cess on water consumed by  persons carrying  on certain industries, with a view to augment  the resources  of  the statutory Boards for the  prevention  and control of water pollution. Section 2(c) defines  "specified industry"  to mean "any industry specified in  Schedule  I". Power (Thermal & Diesel) Generating Industry is included  at item No. 14 in Schedule I to the Act. Section 3 which is the charging  section  inter alia provides that there  shall  be levied and collected a cess for the purposes of the 1974 Act and  utilisation thereunder. The Cess under sub-section  (1) is  made payable by every person carrying on  any  specified industry  to  be calculated on the basis of  water  actually consumed  for any of the purposes specified in column  1  of Schedule  II, at such rate not exceeding the rate  specified in the corresponding entry in column 2 thereof. Schedule  II enumerates  in  column  1 the purposes for  which  water  is consumed and sets out the maximum rate of cess therefore  in column 2. The rare of cess for industrial cooling is  three- fourths of a paisa, per 125 kilolitre, while it is one paisa per kilolitre for  domestic

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purpose.  Where water gets polluted and the  pollutants  are easily bio-degradable, the rate is 2 paise per kilolitre but where  the pollutants are not easily bio-degradable and  are toxic, the rate is two and a half paise per kilolitre. It is obvious  that  the  rate of cess depends on  the  degree  of pollution.  It  may also be noticed at this stage  that  the cess  is  to be calculated on the basis of the  water  ’con- sumed’  for  any of the purposes specified in  column  1  of Schedule  II at the rate set out in the notification  issued by the Central Government not exceeding the rates  specified in  column  2 of the said schedule. Section 4  provides  for affixing of meters for the purposes of measuring and record- ing the quantity of water consumed. Section 5 requires every person  carrying on any specified industry and  every  local authority,  liable to pay the cess under section 3, to  fur- nish returns in such forms and at such intervals  containing such  particulars  as may be prescribed to  the  officer  or authority  appointed therefore. The officer or authority  to whom  the  return  has been furnished  under  section  5  is charged with the duty to make an inquiry as to the  particu- lars stated in the return and then pass an assessment  order stating  the amount of cess payable by the concerned  person or  local  authority, as the case may be.  Section  14  pre- scribes  a penalty for failure to file a return and  section 11  provides  a penalty for failure to pay the  cess  within ’the specified time. Any person or local authority aggrieved by  an  order of assessment made under section 6  or  by  an order imposing penalty under section 11, may file an  appeal under  section  13  within the prescribed  time.  Section  7 provides  for a rebate if the cess is payable. It  reads  as under: "Where any person or local authority, liable to pay the cess under  this  Act,  instals any plant for  the  treatment  of sewage  or  trade effluent, such person or  local  authority shall  from such date as may be prescribed, be  entitled  to rebate  of  seventy  per cent of the cess  payable  by  such person or, as the case may be, local authority." The  expressions ’sewage’ and ’trade effluents’  having  not been  defined  would  have the  same  meanings  respectively assigned to them under the 1974 Act. Section 17 empowers the Central  Government to make rules for carrying out the  pur- poses of the Act. Under that section, the Central Government made  the  Water (Prevention & Control  of  Pollution)  Cess Rules, 1978, (hereinafter called ’the Rules’). Rule 6 there- of  deals  with  rebate. Under that rule  where  a  consumer instals  any  plant  for the treatment of  sewage  or  trade effluent such consumer becomes entitled to the rebate  under section 7 on or from the expiry of 15 days from the 126 date on which such plant is successfully commissioned and so long as it functions successfully.     The  appellant,  the Rajasthan State  Electricity  Board constituted’  in  1957 under section 5  of  the  Electricity (Supply)  Act, 1948, established a Thermal Power Station  on the bank of River Chambal in Kota for generating energy.  It admittedly  consumes  water  from the  river  for  Condensor Cooling.  The  water drawn from the river  is  filtered  and thereafter  passes  through an enclosed  pipeline  over  the condensor unit for cooling the condensor, After the water is used  for cooling, it is treated as a trade effluent in  the neutralisation plant installed by the appellant at consider- able expense with a view to preserving the wholesomeness  of water before it is discharged into the river. After  conden- sor  cooling,  the water passes through an  enclosed  under- ground steel pipeline of the length of about 478 meters upto

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the  seal pit. On reaching the seal pit the water is  pumped to  a height of about 22 feet from where it is made to  fall into an open channel and is then carried in that channel  to a  distance  of about 150 feet before it  plunges  into  the river.  In  this manner the water at the seal pit  comes  in contact with air. Its temperature is reduced firstly by  the 22 feet fall into the open channel and thereafter by  cover- ing  a distance of about 150 feet before getting  merged  in the river or stream. The temperature is thus brought down to below  40 deg.C, the standard prescribed under  the  Minimum National Acceptable Standards published by the State  Board. The appellant had also installed a 0.4 MGD plant for  treat- ment  of sewage. Both these plants, contends the  appellant, are working satisfactorily.     The  appellant  submitted monthly returns of  the  water consumed from river Chambal for its Thermal Station, units 1 and  2, for the period from July, 1983 to January, 1984  and February,  1984 to June 1984. The Assessing  Authority,  re- spondent No. 2, assessed the cess at Rs. 13, 13,710 for  the first  period and Rs.9,42,013 for the subsequent period.  No rebate  was allowed under section 7 of the 1977 Act  on  the ground  that  the so-called neutralisation plant was  not  a plant for the treatment of sewage or trade effluents  within the  meaning of the said provision. Nothing was  said  about the  plant for the treatment of sewage. The appellant  filed an  appeal under section 13 in respect of the  cess  claimed for the period from July, 1983 to January, 1984. The  appel- late  authority dismissed the appeal holding that  the  cess was correctly assessed and the appellant was not entitled to rebate.  In  respect of the assessment for the  period  from February,  1984  to  June, 1984 the  appellant  submitted  a review petition which was rejected by respondent No. 2.  The appellant then preferred an appeal but the 127 same  was dismissed as barred by limitation.  The  appellant preferred separate Writ Petitions Nos. 12 1/85 and 966/86 in the High Court challenging the two assessment orders. In the former  writ  petition the High Court granted  interim  stay against  the  recovery of the disputed cess  amount  to  the extent  of  seventy percent till the disposal  of  the  writ petition.  In the second writ petition since  the  appellant had  already  paid the amount of cess, the  application  for stay  did not survive but for future assessment  orders,  it directed  the appellant to pay thirty percent regularly  and the remaining seventy percent with interest at 15% per annum in  the event the challenge failed. Both the aforesaid  writ petitions  were finally disposed of by a Division  Bench  on 28th  October.  1988 which dismissed them holding  that  the cess was correctly assessed and the appellant was not  enti- tled to rebate. In taking this view the Division Bench  came to  the conclusion that there was no material on  record  to show that the appellant had applied for consent of the State Board  to instal a plant either under section 25 or  section 26 of the 1974 Act nor was there evidence to show that  such consent  was given. It, therefore, opined that the  authori- ties below had rightly concluded that the benefit of  rebate under  section 7 was not admissible to the appellant.  While dismissing  the writ petitions the Division Bench,  however, observed as under: "Anyhow  if  the consent after the period of  assessment  in dispute  has either been obtained for discharge of  effluent etc.,  or  can be deemed to have been obtained  and  if  the treatment plants are working satisfactorily, the  petitioner shall  be entitled to rebate according to the provisions  of rules for that period."

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It  follows  therefrom that the Division  Bench  refused  to grant  rebate to the extent of seventy per cent for want  of consent under section 25 or 26 of the 1974 Act.     Feeling  aggrieved by the Judgment and order  passed  by the  Division  Bench of the High Court, the  appellant  pre- ferred special leave petitions (Civil) Nos. 1429 and 2157 of 1989  challenging the dismissal of the said two  writ  peti- tions.  During  the pendency of  these  proceedings  several assessment orders came to be made for the subsequent periods upto  may,  1989 for the water consumed at  the  appellant’s Thermal Units. The Assessing Authority also refused to grant rebate, The appellant preferred appeals against the  assess- ment  orders passed from time to time but to no  avail.  In- stead of approaching the High Court the appellant has  filed Special Leave Petitions Nos. 3223, 3262, 128 3272,  4599 and 4600 of 1990 in this Court against the  said assessment orders as well as the refusal to grant rebate  on the  ground  that  similar questions were  involved  in  the earlier  two special leave petitions which were  pending  in this Court. We have granted special leave in all cases under Article  136 of the Constitution and we now proceed to  dis- pose them of by this common Judgment.   Dr.  Singhvi, the learned counsel for the  appellant  con- tended that the 1977 Act was an independent piece of  legis- lation  and  was not, what he called, ’the pari  materia  or parasite legislation’ to the 1974 Act, and hence once it  is shown  that  the  appellant had installed a  plant  for  the treatment of a trade effluent within the meaning of  section 7 of the 1977 Act read with rule 6 of the Rules, the  appel- lant was entitled to rebate regardless of whether or not the appellant  had secured the consent of the State Board  under section  25(1) of the 1974 Act. He contended that the  State Board’s  consent became necessary only if an outlet  new  or altered-  was sought to be used for the discharge of  sewage or  trade effluent in the stream and not otherwise.  In  the present  case, contended Dr. Singhvi, the appellant had  put up  an independent sewage plant for the treatment of  sewage and an independent neutralisation plant for the treatment of water  discharged  from the condensor cooling plant  of  the Thermal  Station.  So  far as the former  is  concerned  the consumption  of  water is negligible; the  bulk  consumption takes place at the condensor cooling plant from where  water is  discharged  after  use at a temperature  far  above  the standard of 40 C, which if discharged into the stream  with- out  treatment  would be harmful and injurious  to  acquatic organisms  in  the stream. That is  why  the  neutralisation plant  was necessary to bring down the temperature of  water to  40C or below before its actual discharge in the  stream. At  the  point where this water merges into the  stream  its temperature  is below 40 C and therefore it ceases to  be  a contaminated  trade effluent. Since the outlet is  used  for the  discharge  of this water which is no more  polluted  it cannot be said that it is used for the discharge of a trade effluent  within  the meaning of section 25(1) of  the  1974 Act. According to Dr. Singhvi the enactment being essential- ly for the prevention, control and abatement of pollution of streams and wells. the duty to ensure the purity of  streams and  wells is cast on the State Board and for the  effective performance of the same, section 25( 1)’ provides for previ- ous  consent if any new or altered outlet is intended to  be brought   use for the discharge of sewage or trade effluent. But no such previous consent would be necessary if uncontam- inated water is sought to be discharged into the stream.  In other  words according to Dr. Singhvi the expression  ’trade

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effluent’ in section 2(k) must be read 129 in the context of the purpose and object of the law and  the mischief it seeks to curb. Yet, by way of abundant  caution, the appellant applied for the grant of consent under section 25/26  of the 1974 Act by the letter dated 9th  April,  1984 for  the neutralisation plant and by the letter  dated  I2th April,  1984  for the sewage plant meant for the  colony  of workmen situate within the power Station. Under  sub-section (7)  section  25 since the State Board neither  granted  nor refused  consent within the period of four months  from  the receipt of the applications, it must be deemed to have  been granted  unconditionally on the expiry of the  said  period. Lastly,  he pointed out that during the pendency of the  two writ petitions in the High Court, the Secretary of the State Board  granted the required consent and conveyed it  by  his letter  No. F. 5(B-I4)RSEB/Tech/86/11472 dated  24th  March, 1988.  Therefore, when the Division Bench of the High  Court disposed of both the writ petitions the consent of the State Board under section 25(1) was already granted and hence  the High Court was not right in making the observations it  made in paragraphs 7 and 9 of the impugned judgment.     We  may clarify that in the present appeals we  are  not concerned  with  the legality and validity of  the  levy  of cess.  Dr. Singhvi, however, stated that the  appellant  re- served the right to challenge the validity of the 1977  Act, if the interpretation placed by the authorities below on the true  scope  and meaning of section 7 read with  rule  6  is found  to  be correct. We may state that since  we  are  not required to go into the question of Parliament’s  competence to enact the 1977 Act, we do not propose to delve into  this aspect of the matter.     Now, on a plain reading of sub-section (1) of section 25 it  becomes  clear that the previous consent  of  the  State Board  is necessary where any new or altered outlet is  pro- posed to be used for the discharge of sewage or trade efflu- ent  into  a stream or well. If what is  discharged  in  the stream or well is not a pollutted ’trade effluent’  (section 2(k))  or a ’sewage effluent’ (section 2(g)), can  there  be any  question of seeking the previous consent of  the  State Board? The appellant has a separate sewage plant. Since  the bulk of the water is consumed at the condensor cooling plant and  the same is recycled into the stream, the  question  is whether what is discharged in the stream can be said to be a trade  effluent? Dr. Singhvi emphasised that the consent  of the  State Board would not be necessary under section  25(1) for the discharge of that recycled water, unless it is shown that  what the appellant discharged in the stream  or  river was  polluted  water, According to Dr. Singhvi, the  use  of water  at  the  condensor cooling plant  merely  raises  the temperature of water above the tolerance limit 130 of 400 C. if the water is discharged in the river or  stream before its temperature is reduced to 400 C or below, it  may well  be  contended  that within the broad  meaning  of  the expression  ’pollution’ in section 2(e), it  was  imperative for  the  appellant to obtain the previous  consent  of  the State  Board for making use of that outlet. But if,  on  the other  hand,  it is shown that the temperature of  water  is brought down to the prescribed standard and the water is  no more harmful or injurious to acquatic organisms in the river or stream i.e. is not polluted, the discharge of such  water cannot  be equated with discharge of a trade effluent.  This raises  a mixed question of law and fact, viz., whether  the recycled water returned to the stream in the same  condition

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in  which it was drawn with the temperature reduced to  less than  400  C,  can still be said to be  a  ’trade  effluent’ requiring  consent  under Section 25( 1)? It  may,  in  this context be mentioned that samples of the trade effluent were collected by the State Board for analysis on 24th May, 1984. By letter dated 3rd December,  1984, the appellant requested the Assistant Engineer, State Board, to supply a copy of the analysis  report which was refused by the letter dated  26th December, 1984. The appellant was informed that the monitor- ing results conducted by the Board .were not supplied to the concerned industries. He added that the appellant could  get the sample tested, if so desired, at the Board’s  Laboratory on payment basis. We think that if the Board was in  posses- sion of this vital information, it should have in all  fair- ness  brought it on record rather than withhold it. If  that information was available on record Dr. Singhvi’s contention could have been met. We are, however, not inclined to  raise any adverse inference as was suggested.     We now come to the second limb of Dr. Singhvi’s  submis- sion.  According  to him, section 7 of the 1977 Act  is  not dependent on the Board’s consent under section 25(1) of  the 1974  Act. In fact neither section 7 nor rule 6 speak  about the  same.  All that section 7 says is that  any  person  or local authority which is liable to pay cess can claim rebate of  70%  of the cess payable by him or it, if he or  it  has installed  a  plant  for the treatment of  sewage  or  trade effluent,  as the case may be. A plant has undoubtedly  been installed for the treatment of sewage and no dispute in that behalf  was raised before us. However, as the bulk  consump- tion of water from the river is used at the condensor  cool- ing plant the question is whether the appellant can be  said to  have  installed  a plant for the treatment  of  a  trade effluent.  The Appellate Authority took the view that a  150 ft.  long  channel  meant for carrying  the  trade  effluent cannot  be  described as a treatment  plant.  The  appellant contended that the treatment plant installed by it comprises of an 131 arrangement to lift the water to a height of 22 ft. and then drop  it  from that height into an open channel so  that  it cools down on coming in contact with the atmosphere and then flows towards and into the river. It would appear that  this arrangement  was not specifically brought to the  notice  of the authorities below including the High Court and it  seems the authorities decided the question of the existence of the treatment plant on the premise that it consisted of merely a single 150 ft. long channel. However, this aspect has to  be looked into.     The High Court has, however, taken the view that in  the absence  of consent under Section 25( 1 ), the appellant  is not  entitled to rebate. We find it difficult to agree  with this  view. Section 7 as well as Rule 6 do not envisage  the Board’s  consent  under Section 25(1) of the 1974 Act  as  a sine-qua-non. Under section 7 the consumer has only to  show that he has installed a plant for the treatment of sewage or trade  effluent and that it functioned  successfully  during the  relevant period to earn rebate. Section 25(1)  operates in  a  different field and has nothing to do  with  a  plant installed for the treatment of a trade effluent although the grant  of consent to a new outlet can be conditional on  the existence  of  a plaint for the  satisfactory  treatment  of effluents to safeguard against pollution of the water in the stream.  The High Court refused the claim for rebate  as  it erroneously  thought  that the prior consent  of  the  State Board was a must. That is why in the concluding part of  the

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Judgment  it  observed that if the consent  is  subsequently obtained  or deemed to be obtained and the plant is  working successfully,  the  appellant will be  entitled  to  rebate. Since  we  are of the view that the  Board’s  consent  under Section 25(1) was not imperative, we think that that part of the High Court’s order cannot be sustained.     So  far as the 1977 Act is concerned it would be  neces- sary to consider the true scope and meaning of section 7 and rule  6. On a plain reading of the said provisions it  would be necessary to decide (i) whether water discharged from the condensor cooling plant can be said to be a ’trade effluent’ by  reason only of the fact of its temperature  being  above the prescribed standard, (ii) whether but for the  treatment given to it as described by the appellant and set out  above such water would have been discharged in the stream or river at  a temperature above 40 deg.C, and (iii) whether the  ar- rangement made by the appellant as set out above can, there- fore,  be described as a plant for the treatment of a  trade effluent.  These and the related questions must be  answered to  effectively deal with the appellant’s claim for  rebate. The  authorities  below including the High  Court  have  not applied  their  minds to these essential  for  deciding  the question of grant or refusal of 132 rebate. If it is found that the plant in question is one for the  treatment of a trade effluent, the appellant  would  be entitled  to rebate notwithstanding the absence  of  consent under  section 25(1) of the 1974 Act. We feel that the  par- ties  did not focus their attention on these  vital  aspects and,  therefore,  failed  to place on  record  the  material essential for deciding the application for grant of  rebate. In the circumstances, we are left with no alternative but to remit the matter to the Assessing Authority with a direction to permit the appellant as well as the State Board to  place on record such material as is considered relevant and there- after give the parties an opportunity of being heard  before deciding  the matter. The Assessing Authority should  do  so without  being  influenced  by the previous  orders  of  the authorities as well as the High Court. In the meantime  i.e. till the Assessing Authority decides the matter afresh,  the appellant  will continue to pay 30% of the cess  amount  and will  file an undertaking in this Court within  eight  weeks from today to the effect that in the event the appellant  is finally found liable to pay the balance of 70% the appellant will pay the same with interest at 15% per annum within  six months from the final determination. The appeals are allowed accordingly. Having regard to the facts and circumstances of these cases, we make no order as to costs. Y.  Lal                                              Appeals allowed. 133