TaxTMI 
TaxTMI 
1982 (11) TMI 168
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.... be broadly decided, all the three writ petitions as a whole are referred to the larger Bench to avoid delay and complicacy of arguments again before this Bench. 3. In view of the above observations made by the learned single Judge, we have heard the parties at length on all the questions raised in the writ petitions and are disposing of all the above writ petitions as a whole. 4. Almost identical questions of fact and law have been raised in all these three cases except that they relate to different periods and with a slightly different controversy raised in one of the writ petitions. In writ petition No. 427/ 1971, the petitioner, the Amalgamated Electricity Company Limited (hereinafter referred to as 'the Company') has challenged the demand of electricity duty amounting to Rs. 42,190.53 p. which relates to the period from 1st April, 1962 to 30th April, 1965. In writ petition No. 1918/71 challenge has been made to the demand of electricity duty amounting to Rs. 25,316.34 for a period from 1st May, 1965 to 31st March, 1970. In writ petition No. 1374/72 challenge has been made to demand of electricity duty amounting to Rs. 2,169.00, from 1st April, 1979 to 31st July, 1971. In....
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....the same to the consumers. In order to decide the above controversy it would be necessary to refer the relevant provisions of law in this regard. Section 2 (o) of the Act defines 'consumer' as under : " "consumer" means a person who is supplied with energy by a supplier and includes a supplier in respect of the energy consumed by him in or upon premises used by him for his commercial or residential purposes." Clause (h) of Section defines 'supplier' as under : " "supplier" means the Board Or a licensee licensed under Chapter II of the Indian Electricity Act, 1910 (Central Act 9 of 1910), to supply energy and includes any person who has obtained the sanction in that behalf of the State Government under Section 28 of the said Act. - (i) words and expressions not defined in this Act but defined in the Indian Electricity Act, 1910 (Central Act of 1910) have the meaning assigned to them in that Act." Section 3 of the Act empowers the State Government to levy the electricity dirty en energy supplied to consumers and the State Government under the above section is empowered to fix the rate not exceedi....
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....ch is in view or for which is made'. The words 'commercial purpose' would, therefore, cover an undertaking the object of which is to make a profit out of the undertaking. The Municipal Board Unnao v. State of U. P. 1957 All LJ 496 at page 498." Mr. Joshi also placed reliance on the meaning of words 'commercial premises as given in Oxford Dictionary and also placed reliance on Palghat Electric Corporation Ltd. v. T. N. Veeraraghava- Ayyar, AIR 1941 Mad 439; and Jiyajeerap Cotton Mills Ltd. Birlanagar, Gwalior v. State of Madhya Pradesh, AIR 1963 SC 414. 9. We have given our careful consideration to the submissions made by learned counsel for both the parties. There is no direct case law or authority to determine the controversy raised before me in these cases. In Jiyajeerao Cotton Mills' case (AIR 1963 SC 414) (supra) it was held as under: "Reading the definitions of "consumer" and "producer" given in Section 2 (a) and (d1) and omitting the non-essentials, 'consumer' would include "any person who consumes electrical energy supplied by a person who generates electrical energy for his own consumption". Under Section 3 a person who generates electrical energy over hundred volt....
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.... 2(12) defined a factory. According to the Supreme Court the expressions 'manufacturing process' and 'power' used in the above Section 2(12) shall have the meanings respectively assigned to them in the Factories Act, 1948. Their Lordships then considered Section 2(g) and 2(k) of the Factories Act, 1948, to find out the definition of 'power' and 'manufacturing process'. Section 2(k) defined 'manufacturing process' and in view of Section 2(k)(iii) it was held that the process of transforming electrical energy from a high to low potential and the process of transmitting the energy through supply lines were both manufacturing process. It was further held that in a part of the premises occupied by the company, the two processes were carried on with the aid of power by means of electrical gadgets and other devices, and on the premises more than 20 person's were working and no part of the premises was used for purposes unconnected with the manufacturing processes and thus was a factory within the meaning of Section 2(12) of the Employees' State Insurance Act, 1948. Mr. Jindal, learned, counsel for the Company had laid great emphasis on this authority to hold that the Amalgamated Electrici....
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....e Rajasthan State Electricity Board for supplying it further to consumers in the city of Ajmer. In Commissioner of Sales Tax, Madhya Pradesh, Indare v. Madhya Pradesh Electricity Board : (1970) 25 STC 188 : (AIR 1970 SC (32), their Lordships of the Supreme Court held that : "Electricity is capable of abstraction, consumption and use and it can be transmitted, transferred, delivered, stored possessed, etc. in the same way as in other movable property." It was further observed that if there could be sale and purchase of electric energy like any other movable object there was no difficulty in holding that electric energy was intended to be covered by the definition of 'goods' in the two Sales Tax Acts which were in consideration before their Lordships. Thus, we are clearly of the opinion that the activity of the company in premises in question dealing with the electrical energy is not other than a commercial activity and the premises are used for commercial purposes. 13. A case of Allahabad High Court C Renusagar Power Co. Ltd., v. State of U. P., AIR 1973 All 33 was cited during the course of arguments. In the above case the question came up for consideration was whether the....
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.... to the controversy to be decided by us. The above case was a case of ejectment of a tenant. In that connection it was held that "the element of trade is contained in the term Commerce' and 'industry' yet their essential features namely exchange or buying and selling in the form and manufacture in the other are different and therefore, they are not synonymous. Whether an activity or enterprise is commercial or industrial will depend upon its nature. The activity of setting up of a flour mill is partly commercial and partly industrial. Where, therefore, a shop was leased for a commercial purpose and was used for carrying on business of food-grains its user for setting up a flour mill would be for a purpose other than that for which it was leased-." 16. The above authority is totally distinguishable and it does not decide any point in favour of the contention raised by Mr. Jindal. 17. The word 'commercial' according to the Oxford Dictionary means viewed as a matter of profit and loss. The word "purpose' means object which is in view or for which it is made. The word 'commercial purpose', therefore, means an undertaking the object of which is to make a profit out of such underta....
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.... to pay to the State Government. Sub-section (3) of Section 5 lays down that where any consumer fails or neglects to pay, the amount of electricity duty due from him, the supplier may, without prejudice to the right of the State Government to recover the amount under Section 8 and after giving not less than 7 days clear notice in writing to such consumer cut all the supply of energy to such consumer. It is not disputed by the respondents that the petitioner company discharged its duty to resort to the provisions of Sub-section (3) of Section 5 of the Act of 1962. The petitioner company has performed its duty by cutting all the supply of energy to the defaulting consumers. The State Government has been authorised to recover the amount from the consumer also. In our view, such an amount can only be due against the supplier when the same has been realised by him from the consumer and not paid to the State Government. The duty of the supplier is only to collect the same from the consumer and Pay it to the State Government. In the facts of this case the petitioner company cannot be considered to have failed in its duty and as such no liability of paying the amount of Rupees 1521.68 can ....