2022 (12) TMI 961 - HC - Indian Laws

Court invalidates assessment orders & demand notices, declaring them based on incorrect provisions & wrongful jurisdiction. Petitioner relieved of duty.

The court invalidated the assessment orders and demand notices, ruling that they were based on incorrect legal provisions and wrongful assumption of ... Liability to pay Electricity duty - bulk supply of energy or not - specific case of the petitioner is that it is only a consumer of electricity supply and is not the Licensee of the electricity supply - HELD THAT:- The petitioner, who is undisputedly into the business of operating a hotel is not an industrial consumer, therefore the petitioner does not fall under the definition of “bulk supply” as provided in the said Rules. Accordingly, since the petitioner is not being supplied with bulk supply of energy the petitioner is not an ‘Assessee’ as defined under the said Rules. Therefore, no liability can be imposed upon the petitioner to pay the electricity duty to the Respondent Department. The impugned assessment orders, all dated 15.02.2020 and subsequent notice of demand for the respective financial years, dated 19.02.2020, are, hereby, quashed and set aside - Petition allowed. Issues Involved:1. Validity of the Assessment Orders dated 15.02.2020.2. Jurisdiction and legality of the demand notices dated 19.02.2020.3. Applicability of the Jharkhand Electricity Duty (Amendment) Act, 2011.4. Interpretation of 'bulk supply' and 'assessee' under the Jharkhand Electricity Duty (Amendment) Rules, 2012.Issue-wise Detailed Analysis:1. Validity of the Assessment Orders dated 15.02.2020:The petitioner challenged the assessment orders dated 15.02.2020, asserting that these orders were based on provisions of the Jharkhand Electricity Duty (Amendment) Act, 2011, which had been declared ultra vires and illegal by the Jharkhand High Court in the case of M/s Anjaney Ferro Alloys Ltd. The court noted that the assessment orders incorrectly relied on Section 3 and Section 4(a) of the Amendment Act, which either do not exist or do not provide for the payability of electricity duty. The court found that the assessment orders were based on incorrect legal provisions and thus were invalid.2. Jurisdiction and legality of the demand notices dated 19.02.2020:The petitioner received demand notices dated 19.02.2020, which were not served properly, leading to the petitioner applying for certified copies of the assessment orders. The court observed that the entire assessment process was initiated based on incorrect information provided by the local unit of JBVNL, which stated that HT consumers must pay electricity duty directly to the State Government. The court held that the assessment proceedings were void ab initio due to wrongful assumption of jurisdiction by the assessing authority, referencing the principle that if the initial action is not in consonance with law, all subsequent proceedings fail.3. Applicability of the Jharkhand Electricity Duty (Amendment) Act, 2011:The court reiterated that Section 5 of the Jharkhand Electricity Duty (Amendment) Act, 2011, which amended Section 4 of the Bihar Electricity Duty Act, 1948 to impose liability on consumers, had been declared ultra vires. Consequently, the liability to pay electricity duty remained with the licensee, not the consumer. The court emphasized that the assessment orders based on this invalidated provision were unsustainable.4. Interpretation of 'bulk supply' and 'assessee' under the Jharkhand Electricity Duty (Amendment) Rules, 2012:The respondents argued that the petitioner was a bulk purchaser and thus liable to pay electricity duty under the Amendment Rules, 2012. However, the court examined the definitions of 'assessee' and 'bulk supply' under the rules. It concluded that the petitioner, being a commercial consumer operating a hotel, did not fall under the definition of 'bulk supply,' which applies to industrial and mining consumers. Therefore, the petitioner was not an 'assessee' liable to pay electricity duty under these rules.Conclusion:The court quashed and set aside the impugned assessment orders dated 15.02.2020 and the subsequent demand notices dated 19.02.2020. The writ petitions were allowed, with the court holding that the petitioner was not liable to pay the electricity duty as assessed by the respondents.