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PETITIONER: 1. THE STATE OF MADHYA PRADESH2. THE ELECTRICAL ADVISER TO G

       Vs.

RESPONDENT: M/S. BIRLA JUTE MANUFACTURING CO. LTD.

DATE OF JUDGMENT10/05/1995

BENCH: VENKATACHALA N. (J) BENCH: VENKATACHALA N. (J) KULDIP SINGH (J)

CITATION:  1996 AIR  167            1995 SCC  (4) 603  JT 1995 (4)   572        1995 SCALE  (3)729

ACT:

HEADNOTE:

JUDGMENT:                             WITH                WRIT PETITION NO. 2739 OF 1985 1. M/s. Birla Jute Manufacturing Co. Ltd. 2. Shri M.M. Gadodia                            Versus 1. The State of Madhya Pradesh 2. The Electrical Adviser to Government of Madhya Pradesh 3. The Regional Accounts Officer, Madhya Pradesh Electricity Board                       J U D G M E N T VENKATACHALA, J.      Soecial leave  sought for in S.O.F. No. 3870 of 1982 is granted.      The State of Madhya Pradesh, its Electrical Adviser and Regional Accounts  Officer of the Madhya Pradesh Electricity Board, have  filed the  above Civil Appeal under Article 136 of the  Constitution of  India, impugning  a Division  Bench judgment and  order dated  May 1,  1982 of the High Court of Madhya Pradesh  in Misc. writ Petition No. 320/80 wherein it has been  held that  the rate of duty payable on consumption of  the   electrical  energy   under  the   Madhya   Pradesh Electricity Duty  Act, 1949  - "the 1949 Act" in premises of M/s. Birla  Jute Manufacturing Company Limited - "M/s. Birla Ltd." to  which the  Mines  Act,  1952  -  "the  Mines  Act" applied, was  required to  be calculated  under item (2) and not item (1) of Table to section 3 of the 1949 Act.      M/s. Birla  Ltd. and  its Director,  Shri M.M. Gadodia, have filed  the above  writ Petition under Article 32 of the Constitution of  India, impugning  the constitutionality  of the  Madhya   Pradesh  Electricity   Duty   (Amendment   and Validation) Act,  1984 -  "the Validation Act" which amended certain provisions  of the  1949 Act, validating duty levied on consumption  of electrical  energy imposed under the 1949 Act in  respect of  premises to which the Mines Act apolied. Since questions  arising for  our consideration and decision

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in  the  Civil  Appeal  and  the  writ  petition  relate  to sustainability  of  levy  imposed  under  the  1949  Act  on electrical energy  consumed in a premises to which the Mines Act applied, they could be disposed of together.      Facts which  are material for a proper consideration of the questions  arising for  our pecision  in the said appeal and writ petition, could be stated thus:      M/s. Birla  Ltd. has set up several industries all over the country  for the  manufacture  and  sale  of  consumable goods. One  of such  industries set up by M/s. Birla Ltd. is M/s. Satna  Cement works  with lime-stons mines at one place and a  cement factory  at another  place, in  the  State  of Madhya Pradesh.  Huge lime-stone boulders extracted from the mines known  as dnokas  are broken  into small  sized  lime- stones known  as gittis  for being  used as raw-material for manufacture of  cement in the cement factory by a lime-stone crusher erected  in a  premises located at the mines-head of lime-stone mines  to which  the Mines  Act applies.  For the electrical energy consumed by the lime-stone crusher in that premises  at  mines-head  during  the  year  1979-1980,  the Government of  Madhya Pradesh levied duty under section 3 of the 1949  Act at  a rate  calculated under Item (1) of Table below that  section and raised demands thereon, against M/s. Birla Ltd.  Such levies  and demands  were refuted  by  M/s. Birla Ltd. by contending that it was liable for levy of duty on electrical  energy  consumed  for  preaking  dhokas  into gittis by  the lime-stone  crusher in the premises at mines- head only  at a  rate calculated  in item  (2) of  Table  to section 3 of the 1949 Act, notwithstanding the applicability of the Mines Act to the said premises, in that that premises had to  be regarded as a factory for fixing the rate of duty payable on  electrical energy  consumed therein  because  of inclusive meaning  of factory  given in  Explanation (c)  to section 3  of the  1949 Act  itself. Since the Government of Madhya Pradesh  persistet in  its demands  made against M/s. Birla Ltd., the latter filed a writ Petition, Misc. W.P. No. 520 of 1980 in the Madhya Pradesh High Court challenging the said levies  and demands. A Division Bench of the High Court taking the  aid of  Explanation (c) to section 3 of the 1949 Act, duashed the levies and demands challenged by M/s. Birla Ltd., by  upholding the contention that its liability to pay duty was  only at  the rate  calculated under  clause (2) of Table to  section 3  of the  1949 Act,  by its  judgment and order dated  May 1,  1982 rendered in that writ petition, it is the correctness of that judgment and order which has been under challenge  in the present appeal filed by the State of Madhya Pradesh, its Electrical Adviser and Regional Accounts Officer of the Madhya Pradesh Electricity Board.      While, the  correctness of  the said judgment and order of  the  High  Court  in  the  present  appeal  was  pending consideration and  decision by  this  Court,  the  State  of Madhya Pradesh  enacted and brought into force the aforesaid validation Act.  What has  been impughed in the present writ petition by  M/s. Birla  Ltd. is the constitutional validity of that Validation Act.      We  have  heard  learned  counsel  for  the  contesting parties in  the appeal as well as the writ petition. We have been taken  through the  judgment of  the High  Court  under appeal and  the relevant  provisions of the 1949 Act and the Validation Act.  Whether the duty leviable on consumption of electrical energy  by M/s. Birla Ltd. under section 3 of the 1949 Act in their premises to which the Mines Act applies is at the  rate specified  in Item (1) or Item (2) of the Table given below that section being the main question which needs to be  answered by us in deciding the present appeal and the

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writ petition, we shall proceed to find the answer therefor, at the first instance.      Since the  answer to  the said question has necessarily to depend  on a  proper construction  to be  placed by us on section 3  of the  1949 Act, as a whole, as to its ambit and application, it  could be  reproduced for  the sake  of easy reference and proper examination, thus:                "3. Levy  of duty  on sale  of      consumption of electric energy - Subject      to the  exceptions specified  in section      3-A  every   distributor  of  electrical      energy  and  every  producer  shall  pay      every month  to the  State Government at      the   prescribed   time   and   in   the      prescribed manner  a duty  calculated at      the rates  specified in  the Table below      on the  units of  electrical energy sold      or   supplied to  a consumer or consumed      by himself  for his  own purposes or for      purposes  of  his  township  or  colony,      during the preceding month:                               TABLE                           Rate of Duty      (1) Electrical energy sold or           supplied for consumption           in premises used -         (a) for business trade or     8 paise per unit of             commercial purposes or    energy upto 80 units             for purposes of profe-    of energy sold or             ssional persuits other    supplied in a month.             than for flour mills.                                       10 paise per unit for                                       each additional unit                                       sold or supplied in a                                       month in excess of                                       units but not in exce-                                       ss of 100 units of                                       energy                                       12 paise per unit for                                       each additional unit                                       sold or supplied in a                                       month in excess of 100                                       units of energy.         (b) for flour mills           2 paise per unit of                                       energy.      (2) Electrical energy sold       2 paise per unit of          supplied for consumption     energy.          in in premises of a fact-          ory excluding energy sup-          plied for consumption for          domestic or non-factory          purposes where the conn-          ected load         (a) does not exceed 100 H.P.  1.5 paise per unit of                                       energy.         (b) exceeds 100 H.P.          3 paise per unit of                                       energy.      (3) Electrical energy sold or    65 paise per unit of          supplied for purposes of     energy upto 50 units          ellumination on the occa-    of energy sold or sup-          sion of marriages or other   plied on any one occa-          social functions.            sion.                                       Rest per unit for each                                       additional unit sold                                       or supplied on any one

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                                     occasion in excess of                                       100 units of energy.      (4) Electrical energy sold or          supplied for energy cons-          umption in :-         (a) a township or colony             attached to a factory,             mine, or institution or         (b) a premises getting supply             at high voltage or extra             high voltage but not cov-             ered under Items (1) and             (2) in above.      (5) Electrical energy sold or    6.5 paise per unit of          supplied for consumption in  energy upto 50 units          premises and for purposes    of energy sold or sup-          not covered under (1) to (4) plied in a month.          above.                                       7 paise per unit for                                       each additional unit                                       sold or supplied in a                                       month in excess of 50                                       units but not in exc-                                       ess of 150 units of                                       energy.                                       12 paise per unit for                                       each additional unit                                       sold or supplied in a                                       month in excess of 150                                       units of energy.           Provided  that  if  the  electrical      energy sold  or supplied for consumption      for  any  one  purpose  is  used  either      wholly or partly, without the consent of      the distributor of energy or producer or      electricity, as  the case  may  be,  for      consumption for  any other  purpose  for      which  a   higher  rate   of   duty   is      chargeable the  entire  energy  sold  or      supplied shall be charged at the highest      rate applicable.           Explanation -  For the  purpose  of      this section -      (a) ‘Month  means such  period as may be           prescribed and  till such period is           prescribed, the filing month :      (b) Premises  used  for  business, trade           commercial purposes or for  purpose           of  professional   persuits   shall           include the premises used -           (1) for  the purposes  of mines  to      which Mines  Act, 1952  (No. 35 of 1952)      applies :           (2) for  the purposes of industries      which do  not require  raw materials for      carrying on the industries but which are      carried on  for rendering  services such      as flour  mill, repains workshop and the      like and are not registered as factories      under the Factories Act, 1945 (No. 63 of      1948) :           (c)   Factory   means   a   factory      registered under  the Factories Act 1945      (No. 67 of 1946) : and includes premises      used  for  the  purposes  of  Industries

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    which require raw materials for carrying      on the manufacturing process and prepare      finished goods for sale."      As seen  from section 3 above, duty leviacle thereunder and  payable   to  the   State  Government  every  month  on electrical energy  sold or  supplied or  consumed during the preceding month is required to be calculated at the rate per unit specified in the Table given below that section. As per the Table,  duty payable  for the  electrical energy sold or supplied for consumption varies from item to item, depending upon the  purpose for which it is consumed. when item (1) of the Table  is seen,  the rate of duty payable for electrical energy sold or supplied for consumption in a premises covers premises used  for business, trade or commercial purposes or for purposes  of professional  persuits other than for flour mills. Because  of the  explanation (b) to the section which says that  for the  purpose of the section premises used for business, trade,  commercial  purposes  or  for  purpose  of professional persuite  shall include  the premises  used for the purpose  of mines  to which the Mines Act, 1952 applies, any premises  in or  a mine which is used for processing the mines extracted  from the  mine, becomes the premises covers under Item  (1) of  the Table. When Item (2) of the Table is seen, the rate of duty payable for electrical energy sold or supplied for  consumption in  a premises  covers a  factory, because of  explanation (c)  which says that for the purpose of  the   section  factory   not  only   means   a   factory registered under  the Factories Act, 1948, but also includes a premises  used for the purpose of industries which require raw materials  for carrying on the manufacturing process and prepare finished  goods for sale. When Item (3) of the Table is seen. It refers to the rate of duty payable on electrical energy sold  or supplied for purposes of illumination on the occasion of marriage or other social functions when Item (4) of the  Table is seen, it refers to the rate of duty payable for electrical  energy sold or supplied for consumption in a township  or   colony  attached   to  a  factory,  mine,  or institution or  a premises getting supply at high voltage or extra high  voltage but  not covered under Items (1) and (2) of the  Table. The  rates fixed  in  respect  of  electrical energy sold  or  supplied  for  consumption  in  a  premises covered by Item (4) cannot be reparded as a premises covered by Item (1) or Item (2) of the Table because of the specific exclusion of  those items,  as mentioned in Item (4) itself. As seen from Item (5) of the Table, the rate of duty payable for electrical  energy sold  or  supplied  for  premises  or purposes covered  thereunder cannot  apply  to  premises  or purposes covered in Items (1) to (4) of the Table because of their specific  exclusion as mentioned  thereunder. When the rates of  duty leviable under various items in the Table are seen, each  of them  applies, according  to the  purpose for which electrical energy is sold or consumed. Then, comes the proviso to  the Table  which declares  that  the  electrical energy sold  or supplied for consumption for any one purpose is used  either wholly or partly, without the consent of the distributor of  energy or  producer of  electricity, as  the case may be, for consumption for any other purpose for which a higher  rate of duty is chargeable, the entire energy sold or supplied shall be charged at the highest rate applicable. This, praviso, therefore, expressly states that the rates of duty leviable  for electrical energy consumed by premises or purpose covered  by more  than one  item. It  is the highest rate fixed  under them  which is laviable where the consumer of electrical  energy does  not obtain  the consent from the distributor of  electrical energy or producer of electricity

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for change  in such user, Hence, according to the proviso if consent is otained by the consumer of electrical energy from the distributor  of energy  or producer  of electricity  for using electrical  energy in  a cremises of a factory covered by Item  (2) it  cannot be  used for  premises covered under Item (1)  and if  such thing  is done without obtaining such consent, instead  of  lower  duty  payable  for  a  premises covered under  Item (2),  higher duty for a premises covered under Item  (1) becomes  payable. In other words, proviso to the Table requires that a consumer of electrical energy must declare before  such consumption as to the purpose for which it would  be consumed  in the  sense  whether  it  would  be consumed for  the purpose covered under Item (1) or Item (2) or Item  (3) or  Item (4)  or Item  (5) of  the  Table.  The requirement of the proviso when is understood in the context of the  provisions under  different items,  the purpose  for which electrical  energy is  consumed, if  falls under  more than one item, the rate at which duty becomes leviable would be of the item for which highest rate of duty is fixed.      It regard  is had  to the aforesaid analysis of section 3,  its  Table  and  explanation,  as  to  their  ampit  and applicapility, can  it be  held that the rate of out payable for electrical  energy consumed  in premises covered by Item (2) of  Table to  section 3  of the  1947 Act  is  the  rate provided  for  thereunder,  even  where  for  such  premises (factory),  the   Mines  Act  is  made  applicable,  is  the question.      No doubt,  as we  have already  pointed out  a  factory under clause  (c) to  the explanation  to  section  3  since includes premises  used for  purposes  of  industries  which require raw  materials for  carrying  on  the  manufacturing process and prepare finished goods for sale, the premises of M/s. Birla  Ltd. at the mines near of their lime-stone mines of the  State of  Madhya Pradesh  where lime-stone bouloers- dhokas extracted  from  the  mines  are  broken  into  small pieces, i.e.,  gittis for being used in their cement factory or  factory  requiring  raw-material  for  carrying  on  the manufacturing process  and prepare  finished goods of cement for sale,  falls within  the description of premises covered by Item  (2) of  the Table to section 3 of the 1949 Act. But the question  is when  such premises  also falls  within the description of  premises covered  by  Item  (1)  because  of clause (b)  (1) to  the Explanation whether the duty payable for electrical  energy used  therein could  only be  what is payable for  premises under  Item (2) of Table to section 3. Since a  premises for  which mines  Act is  made  applicable becomes a premises covered by Item (1) of Table to section 3 of the  1949 Act  which provides  for highest  rate of  duty leviable for  electrical energy  consumed in  such  premises question of  leviability of  lower duty for such consumption merely because of that premises answering the description of premises in  other Item  of the Table respecting which lower duty is leviable can never arise, for as we have pointes out already, when  once highest  rate under an Item is leviable. lower rate  leviable under  other item  is excluded.  It is, therefore, our considerec view trem premises covered by Item (1) to the Table to which Mines Act is made applicable being the premises  of M/s.  Birla Ltd.  at their  mines-site gets covered by  Item (1) of Table and hence the duty payable for consumption of  electrical energy  in that premises shall be at the  rate payable for the premises covered under Item (1) of the Table to section 3 of the 1949 Act.      Hence, the view taken by the High Court in the judgment and order  under appeal that the premises of M/s. Birla Ltd. at the  mines site  being a factory premises covered by Item

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(2) of the Table to section 3 of the 1949 Act the payment of duty leviable  in respect  of electrical  energy consumed in that premises  is covered  by Item (2) of the Table, becomes unsustainable and calls to be interfered with.      The next question which arises for our consideration is as to sustainability of the provisions in the Validation Act which validate  the levy  of duty  imposed under Item (1) to the Table  to section  3 of  the  1949  Act  in  respect  of electrical energy  consumed in  the premises  of M/s.  Birla Ltd. at  their mines  site to  which Mines Act is applicable under the  1949 Act  and in  respect of  similar premises of other persons or companies to which Mines Act is applicable.      Although learned  counsel for  the petitioners  for the writ petitions  sought to  question the  provisions  of  the validation Act  which purport to retrospective validate levy of duty  on electrical  energy consumed  in  their  premises under the 1949 Act because of the view taken of section 3 of the 1945  Act by  the High  Court in  its judgment and order under the  present appeal, the learned counsel for the State of Madhya  Pradesh sought  to support  the sustainability of the validation  Act olacing reliance on the cecision of this Court in  Govt. of  A.P. v. H.M.T. [1975] Suppl. S.C.R. 394, where this  Court had  upheld the provisions of a Validation Act by  which duty  made payable  in respect  of a  building premises retrospectively.  Prima facie, the cecision of this Court appears  to support  the stand  of learned counsel for the State.  But, when  the judgment  and order  of the  High Court under  the present  appeal, which is sought to be made ineffective  by   the  Validation   Act,  is   held  to   be unsustainable by  us in  the  present  appeal,  we  find  it unnecessary,  to   examine  the   constitutionality  of  the Validation Act.      In the  result, we  not merely allow this civil appeal, set aside  the judgment  and order of the High Court in W.P. No. 520  of 1980  (reported in  AIR 1982  m.p. 225) appealed against and dismiss that writ petition, but also dismiss the writ petition filed in this Court. No costs.