Electricity duty demand fails where assessment rests on an ultra vires provision and an inapplicable bulk supply definition.

A levy cannot be sustained where the assessment rests on a provision already declared ultra vires, because proceedings founded on an invalid legal basis lack support in law and the resulting assessment orders and demand notices are liable to be quashed. A hotel operating as a commercial consumer was also held not to fall within the definition of bulk supply assessee under the Jharkhand Electricity Duty (Amendment) Rules, 2012, as that category was confined to industrial and mining consumers receiving high-tension supply. On that footing, electricity duty could not be imposed on the petitioner.

---

---

Issues: (i) Whether the impugned assessment orders and demand notices could be sustained when the levy was founded on a provision earlier declared ultra vires and on an asserted liability of the petitioner as an HT consumer. (ii) Whether a hotel operating commercial consumer fell within the definition of bulk supply assessee under the Jharkhand Electricity Duty (Amendment) Rules, 2012.

Issue (i): Whether the impugned assessment orders and demand notices could be sustained when the levy was founded on a provision earlier declared ultra vires and on an asserted liability of the petitioner as an HT consumer.

Analysis: The assessment was held to rest on the premise that an HT consumer was directly liable to pay electricity duty to the State. That premise was found to have no support in the governing legal framework. The basis used by the assessing authority traced back to the amended provision that had already been struck down, and the subsequent proceedings were treated as flowing from an invalid initiation. Once the foundation was unsustainable, the consequential assessment orders and demand notices could not stand.

Conclusion: The impugned assessments and demand notices were unsustainable and liable to be quashed.

Issue (ii): Whether a hotel operating commercial consumer fell within the definition of bulk supply assessee under the Jharkhand Electricity Duty (Amendment) Rules, 2012.

Analysis: The relevant rules confined bulk supply to supply of energy to industrial and mining consumers receiving high-tension voltage supply. The petitioner was engaged in operating a hotel and was neither an industrial consumer nor a mining consumer. A commercial consumer of this kind therefore did not answer the definition of bulk supply assessee, and no duty liability could be imposed on that basis.

Conclusion: The petitioner did not fall within the category of bulk supply assessee, and the duty demand could not be sustained on that footing.

Final Conclusion: The assessment orders and consequent demand notices were set aside, and the writ petitions succeeded.

Ratio Decidendi: A levy founded on a provision already held ultra vires, or on an inapplicable definition that does not cover the assessee, cannot sustain consequential assessment proceedings.

---