1983 (8) TMI 304 - SC - Indian Laws

Court upholds exemption from Electricity Duty, clarifies duty on self-generated energy.

The Supreme Court allowed the appeal by the State of Uttar Pradesh, setting aside the High Court's decision and dismissing the writ petition challenging ... - Issues:1. Controversy over Electricity Duty on consumption of electrical energy in Uttar Pradesh by a person with own source and purchasing from licensee.2. Interpretation of Sections 3(1) and 4(1) of the U.P. Electricity (Duty) Act, 1852.3. Validity of exemption from Electricity Duty for persons consuming energy from own source installed before January 2, 1973.Analysis:1. The main issue in this judgment revolves around the question of whether Electricity Duty is payable by a person in Uttar Pradesh who has their own source of energy generation and also purchases energy from a licensee, Board, State, or Central Government. The contention arises from the interpretation of Sections 3(1) and 4(1) of the U.P. Electricity (Duty) Act, 1852. The Allahabad High Court initially upheld that a person with own source of generation and purchasing energy is not liable for duty, but a Full Bench later ruled that duty is payable regardless of purchasing from another source.2. The interpretation of Sections 3(1) and 4(1) of the Act is crucial in determining the liability for Electricity Duty. The Court emphasized that duty is levied on the consumption of energy, irrespective of the source of acquisition. The provisions do not exempt a person from duty simply because they have their own source of energy generation and also purchase from another source. The legislative intent behind levying duty is to raise additional revenue, as clarified in the U.P. Gazette Extraordinary. The Court concluded that the duty is chargeable for energy consumed from one's own source, regardless of purchasing from other sources.3. Another issue addressed in the judgment concerns the validity of exemption from Electricity Duty for persons consuming energy from their own source installed before January 2, 1973. The argument was made that exemption should apply to all persons with their own source of energy generation, irrespective of installation date, to avoid discrimination under Article 14 of the Constitution. However, the Court upheld the rationality of the exemption being granted prospectively to promote industrial production and address power shortages, without retroactively encouraging those who already had their own source of generation.In conclusion, the Supreme Court allowed the appeal by the State of Uttar Pradesh, set aside the High Court's decision, and dismissed the writ petition challenging the exemption. The other appeals were also dismissed, emphasizing the rational classification for granting exemptions and the legislative intent behind levying Electricity Duty.