1961 (10) TMI 76

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....urpose of running its mills and for other purpose connected therewith. It does not sell electrical energy to any person. Under the provisions of the Central Provinces and Berar Electricity Duty Act, 1949 (No. 10 of 1949)as amended by the Madhya Pradesh Taxation Laws Amendment Act, 1956 (Act No. 7 of 1956) the Government of Madhya Pradesh levied upon the appellant electricity duty amounting to ₹ 2,78,417/- for a certain period. The appellant paid it under compulsion and thereafter preferred a writ petition to the High Court of Madhya Pradesh under Art. 226 of the Constitution in which it challenged the validity of the levy on two grounds. The first ground was that upon a proper construction of s. 3 of the C. P. & Berar Electricity Dut....

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....or lights, fans of any other appliances normally connected to a lighting circuit. 6 nP. per unit of energy. (ii) Electrical energy supplied for purposes other than those specified in item (i) above. 1 nP. per unit of energy. This is the charging section. It is not disputed by Mr. Sastri that under this provision a producer of electrical energy is made liable to pay duty for the units of electrical energy consumed by himself. He, however, contends that rates of duty have been prescribed in the Table below s. 3 only with respect to electrical energy "supplied for consumption" to others and that no rates have been prescribed with respect to electrical energy consumed by the producer himself. Section 2(a) of the Act defines &qu....

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....ure or production of goods (other than those excepted expressly by that entry). The taxable event with respect to a duty of excise is "manufacture" or "production". Here the taxable event is not production or generation of electrical energy but its consumption. If producer generates electrical energy and stores it up, he would not be required to pay any duty under the Act. It is only when he sells, it or consumes it that he would be rendered liable to pay any duty prescribed by the Act. The Central Provinces and Berar Electricity Act was enacted under Entry 48B of List II of the Government of India act, 1935. The relevant portion of that Entry read thus: "Taxes on the consumption or sale of electricity.......... &q....