Belated payment surcharge cannot be levied on electricity tax arrears, since the tax is payable to the Government, not the board.

Electricity tax collected from consumers under the Tamil Nadu Electricity (Taxation on Consumption) Act, 1962 is a Government levy, and the licensee is only obliged to collect and remit it. Interest for delay under the statutory scheme attaches to the tax arrears payable to the Government, not to the board as its own dues. The board's supply-condition power to recover belated payment surcharge applies to sums due to it, such as consumption charges, but not to electricity tax. The Madras High Court therefore held that belated payment surcharge could not be levied on arrears of electricity tax and set aside the demand.

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Issues: Whether the electricity board was entitled to levy belated payment surcharge on arrears of electricity tax collected from the consumer.

Analysis: The electricity tax under the Tamil Nadu Electricity (Taxation on Consumption) Act, 1962 is a tax payable to the Government. Under Section 5(1), the licensee is only required to collect the tax from the consumer and remit it to the Government. Section 8 provides that where electricity tax is not paid in time, interest on the arrears may be levied and recovery made in the manner prescribed, but the statutory scheme shows that the incidence of such interest belongs to the Government. The board's power under its supply conditions to recover belated payment surcharge extends to sums due to it, such as consumption charges, but not to electricity tax which is not payable to the board as its own dues.

Conclusion: The levy of belated payment surcharge on arrears of electricity tax was not sustainable and was set aside in favour of the assessee.

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