Electricity as goods supports excise duty, validates retrospective levy timing, and confirms lawful tariff surcharge.

Electric energy can be treated as goods for excise purposes because Entry 84 uses the wide expression "produce" and constitutional taxing entries are construed broadly. On that basis, excise duty on electricity generation is valid. The levy from 1 March 1978 was supported by the statutory scheme under the Provisional Collection of Taxes Act, so the demand was not invalid for retrospectivity. The Electricity Board's additional 3 paise per unit charge was upheld as a lawful tariff revision under the Electricity (Supply) Act, reflecting generation costs, transmission losses, and the burden of exempted agricultural consumption.

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Issues: (i) whether electric energy is goods and whether its generation can be subjected to excise duty under Entry 84 of List I; (ii) whether the surcharge and demand from 1 March 1978 were invalid for want of retrospective authority; and (iii) whether the Electricity Board could levy a surcharge of 3 paise per unit.

Issue (i): whether electric energy is goods and whether its generation can be subjected to excise duty under Entry 84 of List I.

Analysis: The expression "produce" in Entry 84 is of wide amplitude and generation of electric energy falls within that expression. The definition of "goods" in Article 366(12) is inclusive, and constitutional entries are to be construed broadly to confer the widest legislative power. Electricity is capable of being treated as movable property for the purpose of excise law, and the reasoning that it is intangible does not exclude it from the concept of goods.

Conclusion: Electric energy is goods for the purpose of excise law, and excise duty on its generation is valid.

Issue (ii): whether the surcharge and demand from 1 March 1978 were invalid for want of retrospective authority.

Analysis: The Provisional Collection of Taxes Act permits a declaration that a provision imposing or increasing excise duty shall have immediate effect, and a declared provision acquires force from the prescribed stage of the legislative process. The notification and declaration brought the levy into force from 1 March 1978, and the challenge to retrospective operation was not pursued in view of that statutory scheme.

Conclusion: The demand from 1 March 1978 was not invalid on the ground of retrospectivity.

Issue (iii): whether the Electricity Board could levy a surcharge of 3 paise per unit.

Analysis: The Board had authority under the Electricity (Supply) Act to revise tariff rates. The increased charge was not merely a collection of excise duty on behalf of the Union, but a tariff revision supported by higher generation costs, transmission losses, and the burden of exempted agricultural consumption being shifted to other consumers.

Conclusion: The surcharge of 3 paise per unit was within the Board's power and was valid.

Final Conclusion: The writ petition failed on all substantial grounds and the impugned levy and surcharge were upheld.

Ratio Decidendi: Constitutional entries taxing manufacture and production must receive a broad construction, and electric energy can be treated as goods and subjected to excise duty when the statutory and tariff framework authorises the levy.

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