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2019 (5) TMI 363
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....AT. APPEAL 17/2016, 18/2016 & 15/2017. Mr. Gautam Narayan, ASC for Govt. of NCT of Delhi of Delhi with Ms. Mahamaya Chatterjee, Advocates in VAT. APPEAL 16/2016 & 19/2016 Mr. A.K. Babbar, Mr. Surender Kumar, Advocate in VAT. APPEAL 16/2016 Counsel for the respondent: Mr. V. Lakshmi Kumaran, Mr. Yogendra Aldak, Mr. Karan Sachdev, Advocates in ST. APPL.1/2017. Mr. Satyakam, Advocate for the Revenue ST.APPL. 1/2017, C.M. Appl. No. 3884-3885/2017, ST.APPL. 5/2017, C.M. Appl. No. 36948/2017, 36950/2017, ST.APPL. 6/2017, VAT APPEAL 16/2016, C.M. Appl. No. 29580/2016, VAT APPEAL 17/2016, VAT APPEAL 18/2016, VAT APPEAL 19/2016, C.M. Appl. No. 31746/2016, VAT APPEAL 20/2016, C.M. Appl. No. 31751/2016, VAT APPEAL 21/2016, C.M. Appl. No. 32217/2016, VAT APPEAL 28/2016, C.M. Appl. No. 36478/2016, VAT APPEAL 15/2017, MR. S. RAVINDRA BHAT 1. The facts and the question of law are common in these appeals, the leading case is that of M/s Schneider India Electric Pvt. Ltd. (hereafter referred as the "assessee" or "Schneider"). The following question of law was framed for these appeals: "Did the VAT Tribunal fall into error in upholding the refusal of the Revenue's claim for exemption under ....
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....1910 (hereafter "the 1910 Act"). 5. For 2003-2004, the assessing authority, without furnishing any reasons, denied the exemption in the assessment order- in respect of Schneider. By an order in the review application, the demand was reduced. The assessees (including Schneider) appealed to the Additional Commissioner where a direction to a pre-deposit was made; this condition was challenged before this court in W.P.(C) 14164/2006 which was dismissed. Schneider appealed to the Supreme Court by special leave; that Court directed the Additional Commissioner to decide the matter. The assessing authority denied exemption for the period 2003-04 and raised demand of Rs. 9,16,62,309/- (including interest) by Assessment Order dated 10.09.2009, which was further reduced to Rs. 8,26,75,711/- (tax of Rs. 4,19,67,366/- and interest of Rs. 4,07,08,345) by Rectification Order dated 12.01.2010. As in the case of Schneider, the other assessees too were denied exemptions. 6. Against the demands, the assessees filed appeals before the Special Commissioner. Schneider was directed to make a pre-deposit of Rs. 4,00,04,000/-, against which the assessee approached VAT Tribunal, whereby the pre-deposit wa....
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....artly dismissed the assessees' appeal. It held that they were entitled to benefit of Rule 11(XII) for the period upto 11.03.2004 upto which the DISCOMs enjoyed being licensees under Electricity Act 1910 but not thereafter when the Electricity Act, 2003 was brought into force. The tribunal further held that the assesses were not entitled to claim deduction for the periods period 11.03.2004 to 31.03.2004 and for 2004-05) from their turnover for sales made to DISCOMS under Section 4(2)(vi) of the DST Act read with Rule 11(XII) of the DST Rules, after 11.03.2004. This resulted in liabilities of various amounts. 9. The relevant discussion in the impugned order reads as follows: "100. II) view of the foregoing discussion we* are of the view that the Appellants are entitled for claiming deductions from their turnover in respect of sales made to DISCOMS namely Mis North Delhi Power Limited, BSES Rajdhani Power Limited, BSES Yamuna Power Limited under Section 4(2)(vi) of the Delhi Sales Tax ,1975 read with Rule11(xii) of the Delhi Sales Tax Rules 1975 upto 10.03.2004' and in respect of sales made to these DISCOMS on and after 11.03.2004 the day when the Electricity Act 2003 came into....
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....SERC). Such Commissions would look into the functioning of the Boards to ensure efficiency and professionalism. The Electricity Act, 2003 (hereinafter "the 2003 Act") was enacted with effect from 10th June 2003. This Act was comprehensive and it took care of all the three Acts, namely, 1910 Act, the Supply Act, 1948 and the 1998 Act. All these were repealed by virtue of the 2003 Act which consolidated the provisions. In the meantime, Delhi Electricity Reforms Act, 2000 (hereinafter referred to as "the DERC Act") was enacted with the objective of restructuring the electricity industry (rationalization of generation, transmission, distribution and supply of electricity), improve avenues for participation of private sector in electricity industry. 13. Provisions of the DERC Act (Section 14) enabled creation of companies for generation, transmission and distribution and transfer of existing generating stations, transmission and distribution systems; Section 15 provided for transfer of assets, liabilities, etc. of DVB to the newly formed companies; the transfer of rights was framed under Delhi Electricity Reform (Transfer Scheme) Rules, 2001 (hereinafter referred to as "the 2001 Rules"....
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....able immediately before the date of the transfer, and the same shall be in force and effect against or in favour of the respective transferee had been a party thereto instead of the Board." 14. The assessees submit that they are eligible for exemption under Rule 11(XII) of the DST Rules for the period under consideration 11.03.2004 to 31.03.2005. In this regard, they argued that with effect from 02.06.2003, the 2003 Act came into force repealing Supply Act. Relying on Section 8 of the General Clauses Act, 1897 it was argued that wherever the Supply Act appeared in DST Rules, the reference is to be to the 2003 Act. Section 8 of the General Clauses Act reads as follows: "Construction of references to repealed enactments-(1) Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals or re-enacts, with or without modification, any provision of the former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted." 15. Thus, with effect from 10th June, 2003, the condition for exclusion from turnover und....
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....s, with effect from 10th June 2003, they are deemed licensees under the 2003 Act. Thus, having once read the 2003 Act in place of Supply Act post 10th June, 2003 in Rule 11(XII), its benefit cannot be denied. Thus, the assessees submitted that the DISCOMs to whom they supplied the goods for generation and supply of electricity are licensees under the 1910 Act or the 2003 act, therefore the Rule 11(xii) applies. As the language of that provision is clear, its benefit cannot be denied. The assessees relied on Hemraj Goverdhan Dass v. Govt. of India1978 (2) ELT J 350 (SC), where it was held that: "............We are unable to accept the contention put forward on behalf of the respondents as correct. On a true construction of the language of the notifications dated July 31, 1959 and April 30, 1960 it is clear that all that is required for claiming exemption is that the cotton fabrics must be produced on power-looms owned by the co-operative society. There is no further requirement under the two notifications that the cotton fabrics must be produced by the co-operative society on the power-looms "for itself". It is well established that in a taxing statute there is no room for any int....
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....e order of the Assistant Collector of Central Excise of Baroda dated November 26, 1962 and the appellate order of the Collector of Central Excise dated November 12, 1963." 19. The assessees emphasized that once the prescribed certificates were issued by the buyers (electricity companies) to them certifying that the goods were purchased for use in Delhi directly in the generation/ distribution of electrical energy in Delhi under a license granted under 1910 Act, the benefit cannot be denied on the ground that the provider of the certificate is not eligible for the concession. Reliance was placed on the decisions of the Supreme Court in Chunni Lal Parshadi Lal v. Commissioner of Sales Tax, D.P. Lucknow, (1986) 62 STC 112; State of Madras v. Radio & Electricals Ltd, 1966 Supp SCR 198; ITC Ltd v. Collector Central Excise, (2004) 7 SCC 591. 20. Further, the assessees contended that the findings of the tribunal in the impugned order, that on a comparison of the objectives of the two legislation i.e. the 1910 Act and the 2003 Act, showed that they were enacted with different objectives is fallacious. It was urged that the General Clauses Act provides that when an Act which repeals the e....
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....the 1910 Act, and they cannot be treated as deemed licensee nor is a clear-cut deeming fiction created in law extending them to be deemed licensees under the law. 23. It is submitted that the provision on the lines of the Supply Act was not enacted subsequently or for that matter any other deeming fiction thereby the distribution companies were headed out to be deemed licensee has been enacted. The exemption/deduction was available to the sellers to any undertaking supplying electrical energy under a license or sanction granted or deemed to have been granted under the 1919 Act. NCT argues that the DISCOM whom the assessees had supplied to were never granted license under the provisions of 1910 Act. It is argued that neither the DERC Act nor the Electricity Act contained a deeming fiction thereby the licenses granted under the DERC or the Electricity Act are deemed licensees under the Indian 1910 Act. The licenses to the abovesaid distribution companies were granted under the DERC Act and Electricity Act and in the absence of any deeming fiction in those Acts, the benefit of said Rule 11 (XII), was not available. 24. It was argued that in a taxing law one has to look merely at wha....
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.... urged that references to repealed provisions must be construed to be references to the provision so re-enacted. He relied on the judgment of this court in Commissioner of Income Tax v KRBL Ltd. 2012 Online SCC Del 6054, where it was held that: "9. There is one more way of looking at the controversy. The SIL scheme was undisputedly notified under the Foreign Trade (Development and Regulation) Act 1992. Section 28(iiia) brings the profits of sale of license granted under the Imports (Control) Order, 1995, made under the Imports and Exports (Control) Act, 1947, to charge under the head "business". The Imports and Exports Control Act, 1947 stood repealed on the enactment of Foreign Trade (Development and Regulation) Act of 1992. Under Section 8 of the General Clauses Act, 1897 where any Central Act made after the commencement of the General Clauses Act, repeals and re-enacts, with or without modification, any provision of the former enactment, then references in any enactment or in any instrument to the provisions, so repealed shall, unless a different intention appears, be construed as references to the provisions so re-enacted. 10. The effect of this is that under Clause (iiia) ....
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....te by special leave, that since the repeal of the Factories Act, 1934, in the definition of Commercial Establishment in s. 2 clause 3, are included all clerical and other establishments of a factory without any exemption has therefore no force. 5. The Factories Act, 1948 defines a worker by s. 2(1) as meaning, "a person employed, directly or through any agency, whether for wages or not, in any manufacturing process or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process." And a factory is defined by s. 2(m) as meaning any premises including the precincts thereof wherein a specified number of workers on any day of the preceding twelve months is employed. By the combined operation of these definitions, persons employed in any manufacturing process or in cleaning any part of the machinery or part of the premises used for the manufacturing process or any other kind of work incidental to or connected with the manufacturing process or the subject of the manufacturing process are deemed to be workers in a factory. By the....
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....f, or in connection with, a railway; and (d) all ferries, ships, boats and rafts which are used on inland waters for the purposes of the traffic of a railway and belong to or are hired or worked by the authority administering the railway:" The 1989 Act defines the said expression in clause (31) of Section 2, which may also be set out: "(31) 'railway' means a railway, or any portion of a railway, for the public carriage of passengers or goods, and includes- (a) all lands within the fences or other boundary marks indicating the limits of the land appurtenant to a railway; (b) all lines of rails, sidings, or yards, or branches used for the purposes of, or in connection with, a railway; (c) all electric traction equipments, power supply and distribution installations used for the purposes of, or in connection with, a railway; (d) all rolling stock, stations, offices, warehouses, wharves, workshops, manufactories, fixed plant and machinery, roads and streets, running rooms, rest houses, institutes, hospitals, waterworks and water supply installations, staff dwellings and any other works constructed for the purpose of, or in connection with, railway; (e) all vehicles which....
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....0 SCC OnLine Guj 86 : (1980) 1 Guj LR 926] , Sant Ram [Sant Ram v. Delhi State, 1980 SCC OnLine Del 72 : (1980) 17 DLT 490] , Mata Sewak Upadhyay [Mata Sewak Upadhyay v. State of U.P., 1995 JIC 1168 (All)] and P. Ramakrishnan [P. Ramakrishnan v. State, 2010 SCC OnLine Mad 3215 : (2010) 1 LW (Cri) 848] and disapprove the view taken by the High Court of Allahabad in Pankaj Shukla [Pankaj Shukla v. Anirudh Singh, 2011 SCC OnLine All 2442 : (2011) 2 ADJ 472]." 32. The other decisions relied on were State v. Ratan Lal Arora, (2004) 4 SCC 590 and State v. A. Parthiban, (2006) 11 SCC 473. Ratan Lal Arora (supra) ruled that: "The argument overlooks the principles underlying Section 8 of the General Clauses Act. When an Act is repealed and re-enacted, unless a different intention is expressed by the legislature, the reference to the repealed Act would be considered as reference to the provisions so re-enacted." 33. Further, the counsel contended that the DISCOMs were licensees under the 2003 Act- in support of this, the assessees relied on Section 14 of the Electricity Act, 2003. In this regard, considering the purpose of the exemption under Rule 11(XII) read with the consolidation natu....
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....casion to impose interest under Section 27 of the DST Act and the same is liable to be accordingly set aside. Arguments on behalf of NCT 35. Counsel for NCT, Mr. Satyakam submitted that for the year 20032004, the assessees claimed to have sold electrical equipment to various undertakings such as the DISCOMs and they are companies engaged in generations/distribution of electricity in Delhi and that they filed return for the assessment year 2003 - 04 claiming deduction from his turnover sales made to above - said companies by relying upon Rule 11 (XII). He submitted that the NCT's position is that such sales were not to any undertaking which has a license or sanction granted or deemed to have been granted under the 1910 Act. The NCT submitted that the assessees' plea that DISCOMS were successors of DVB, does not advance their case, for, the exemption provisions are to be applied in their own terms. Rule 11 (XII) of the DST Rules, does not prescribe that exemption would be admissible to the successors of the licensees under the 1910 Act. 36. Further, the Counsel submitted that the judgment in the case of Suresh Jindal (supra) is not apt for the question of exemption under the DST A....
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....ing a statute where its application may be called for. Nonetheless, the function of the courts is only to expound and not to legislate. Legislation in a modern State is actuated with some policy to curb some public evil or to effectuate some public benefit. The legislation is primarily directed to the problems before the legislature based on information derived from past and present experience. It may also be designed by use of general words to cover similar problems arising in future. But, from the very nature of things, it is impossible to anticipate fully the varied situations arising in future in which the application of the legislation in hand may be called for, and, words chosen to communicate such indefinite referents are bound to be in many cases lacking in clarity and precision and thus giving rise to controversial questions of construction. The process of construction combines both literal and purposive approaches. In other words, the legislative intention i.e. the true or legal meaning of an enactment is derived by considering the meaning of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to ....
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.... public interest so to do, he may, with the previous approval of the Central Government, exempt, by notification in the official Gazette, and subject to such conditions, if any, as he may impose any specified class of sales by any specified class of dealers from payment of the whole or any part of the tax payable under this Act. (2) If in respect of any sales which are exempt from payment of tax under sub-section (1), a breach of any of the conditions subject to which such exemption was granted is committed, the dealer responsible for such breach shall be liable to pay tax in respect of all such sales as if no such exemption had been granted." 39. Rule 11(XII) of the DST Rules prescribes the list of such other sales which may be deducted from the turnover by a dealer. Clause XII of Rule 11 which is relevant for the purposes of this writ is extracted below: - "Rule 11. Other sales which may be deducted from the turnover by a dealer: - In calculating his taxable turnover, a registered dealer may deduct from his turnover- (XII) Sales made to any undertaking supplying electrical energy to the public in Delhi, under a license or sanction granted or deemed to have been granted u....
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...., 3rd Edition, Volume VI (1954), defines 'undertaking' as: ".. though various ingredients make up an undertaking, the term describes not just the ingredients but the completed work from which earnings arise." The Law Lexicon Dictionary (Page 1932) defines' undertaking as: "as any business or any work or project which one engages in or attempts as an enterprise analogous to business or trade." 41. In P. Alikunju, M. A. Nazeer Cashew Industries v Commissioner of Income Tax (1987) 166 ITR 80, it was held that "undertaking means an enterprise, venture or engagement". In Ansal Housing and Construction Ltd. v Commissioner of Income Tax185 Taxman 74 (Del) "undertaking" was held to be the one that partakes the character of a business. Rustom Cavajee Cooper v. Union of India [AIR 1970 SC 564] also explained the meaning of undertaking in context of Banking Regulation Act, 1949 whereby in 1969 several banks were regarded as undertaking and were acquired by the government. 42. The assessee submitted that Parliament wisely prefixed "any" to undertaking as it never intended to restrict the benefit of Rule 11(XII) to a particular type of entity whether government or non-governm....
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....f the provision is unambiguous and if from the provision the legislative intent is clear, the Court need not call into aid the other rules of construction of statutes. The other rules of construction are called into aid only when the legislative intent is not clear." We have noticed that the Words "Any Undertaking" in respect of sales made to Electricity Undertakings has been used for the First time in the Bengal Finance (Sales Tax) Act of 1941. At that point of time the Electricity Act of 1948 was not in force. 44. In Shiv Shakti Co-operative Housing Society vs. Swaraj Developers AIR 2003 SC 2434, the Supreme Court observed: "It is a well settled principle in law that the Court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent." 45. In Union of India and another vs. Hansoli Devi and others 2002(7) SCC (vide para 9), the Supreme Court observed: lilt is a cardinal principle of construction of a statute that when the language of the statute is plain and unambiguous, then the court must give effect to the words used in; th....
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....the Supply Act, reproduced below: "The coordinated development of electricity in India on a regional basis is a matter of increasingly urgent importance for post-war re-construction and development. The absence of coordinated system, in which generation is concentrated in the most efficient units and bulk supply of energy centralized under the direction and control of one authority is one of the factors that impedes the healthy and economical growth of electrical development in this country. Besides, it is becoming more and more apparent that if the benefits of electricity are to be extended to semi-urban and rural areas in the most efficient and economical manner consistent with the needs of an entire region, the area of development must transcend the geographical limits of a municipality, a cantonment board or notified area committee, as the case may be. It has, therefore, become necessary that the appropriate Government should be vested with the necessary legislative powers to link together under one control electrical development in contiguous areas by the establishment of what is generally known as the 'Grid System'. In the circumstances of this country such a system....
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....f electricity to all areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto." 48. From the relevant provisions, it is clear that the Delhi Vidyut Board (DVB) was deemed to be a licensee under the 1910 Act. This is because the Delhi Electricity Control Order ("DECO") of 1959 was framed under provision of section 22 B of 1910 Act read with notification of Central Government dated 10.11.1959 to regulate transmission, distribution and utilisation of electricity and for maintaining the supply and securing equitable distribution of energy by all concerned in the Union Territory of Delhi. When functions to deal with electricity were delegated to Municipal Corporation of Delhi (MCD) under the Delhi Municipal Corporation Act 1957 as licensee, the Delhi Electricity Supply Undertaking (DESU) was functioning as undertaking of MCD and no Board was in existence. It was felt time and again that restrictions imposed under the provi....
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....manner as the Board was entitled to, prior to the effective date of the transfer." 50. In the DERC Rules, "Board" was defined to mean DVB constituted under Section 5 of the Supply Act; Rule 2(f) defined DISCOMs to mean as companies with the principal object of engaging in the business of distribution and supply of electricity in the area as specified in Part II of Schedule H. "Transferee" was been defined in Rule 2(r) to mean "GENCO", "TRANSCO", "DISCOMS" and "PPCL", in whom the undertaking or undertakings or the assets, liabilities, proceedings and personnel of the DVB stood transferred. 51. The said DISCOMs (M/s NDPL, M/s BSES Rajdhani Power Limited, BSES Yamuna Power Ltd etc) distributed electricity in Delhi during the relevant period and Delhi Transco Ltd. transmitted electricity in Delhi during the relevant period. Therefore, they were licensees - or at least deemed to be licensees under the 1910 Act. 52. This court in Suresh Jindal v. BSES Rajdhani 132 (2006) DLT 339(DB) while upholding its earlier judgment in the case of Suresh Jindal v. BSES Rajdhani, 126 (2006) DLT 49, held that the three distribution companies i.e. BSES Rajdhani, BSES Yamuna and NDPL are duly licensed ....
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....e the license of the respondent: Needless to state, the licensed area was the area assigned to the respondent. In terms of Section 26 of the Electricity (Supply) Act, 1948 read with Rule 10(2) of the Delhi Electricity Reforms (Transfer Scheme) Rules, 2001, powers and obligations of the licensee (OVB) under the Indian Electricity Act, 1910became the powers and obligations of the respondent. Further, as per the Delhi Electricity Reforms (Transfer Scheme) Rules, 2001 read with Section 14 and 15 of Delhi Electricity Reforms Act, 2000, respondent became the successor- in-interest of Delhi Vidyut Board in respect of the license held by Delhi Vidyut Board in relation to the areas earmarked for the respondent within which it had to supply electricity. Section 63 of the Delhi Electricity Reforms Act, 2000 clearly indicated that the provisions of Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 save in so far they were not inconsistent with the provisions of Delhi Electricity Reforms Act, 2000 would continue to prevail in the manner and to the extent provided in Sub-section (3) of Section 63. Vide Subsection(3) of Section 63, reference to State Electricity Board in the Ind....
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....sted in the Authority constituted under Section 70 of the Electricity Act, 2003. Power to be exercised by way of regulations framed. The language of Section 55 itself shows that till the regulations are framed the old regime continues." 53. This judgment was affirmed by Supreme Court-in the case of Suresh Jindal v. BSES Rajdhani Power Ltd. & Others (supra). This court is of the opinion that the status of DISCOMs as licensees (by virtue of operation of the DERC Transfer scheme rules) has been clearly established. The NCT had argued - in this court's opinion unconvincingly- that the context of Suresh Jindal (supra) was different, since the court had to consider if the power to inspect meters vested in the DISCOMs. The court is of opinion that the contextual backdrop of the decision cannot undermine the principle established by it, viz. that DISCOMs are licensees and performed the functions of the DVB. 54. A conjoint reading of the provisions shows that the Supply Act did not repeal the 1910 Act; instead it stipulated that the provisions of the Supply Act were in addition to and not in derogation of the 1910 Act. Therefore, the deeming provisions of the 1910Act continued to be in fo....
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.....2014. We, therefore, are unable to accept the submissions of the Appellant that the licence was valid for a period of one year only. It would be useful to refer to Section 16 of the Act under which aforesaid Specific Licence Conditions of TPC are formulated. 16. Conditions of licence.- The Appropriate Commission may specify any general or specific conditions which shall apply either to a licensee or class of licensees and such conditions shall be deemed to be conditions of such licence: Provided that the Appropriate Commission shall, within one year from the appointed date, specify any general or specific conditions of licence applicable to the licensees referred to in the first, second, third, fourth and fifth provisos to Section 14 after the expiry of one year from the commencement of this Act. Proviso to the aforesaid section very categorically enables the Regulatory Commission to specify general or specific condition of licence applicable to licensees referred to in the first to fifth proviso to Section 14 after expiry of one year after the commencement of that Act. Since as on the date of commencement of the Act, TPC became deemed licensee under the first proviso as its....
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....rnment may, by notification, authorise the State Electricity Board to continue to function as the State Transmission Utility or a licensee for such further period beyond the said period of one year as may be mutually decided by the Central Government and the State Government; (b) all licences, authorisations approvals, clearances and permissions granted under the provisions of the repealed laws may, for a period not exceeding one year from the appointed date or such earlier period, as may be notified by the Appropriate Government, continue to operate as if the repealed laws were in force with respect to such licences, authorisations, approvals, clearances and permissions, as the case may be, and thereafter such licences, authorisations, approvals, clearances and permissions shall be deemed to be licences, authorisations, approvals, clearances and permission under this Act and all provisions of this Act shall apply accordingly to such licences, authorizations, approvals, clearances and permissions; (c) the undertaking of the State Electricity Boards established under section 5 of the Electricity (Supply) Act, 1948 may after the expiry of the period specified in clause (a) be tra....
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....rs in that section, shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897, with regard to the effect of repeals." 58. By the Schedule to the Electricity Act, 2003, in Sl. No. 7, there is an express reference to the Delhi Electricity Reforms Act, 2000. Therefore, the provisions of the DERC Act, to the extent they were not inconsistent with the 2003 Act, continued, by reason of Section 185 (3). Therefore, the DVB's license devolved, for the purposes of its manifold activities, upon the concerned generation, transmission, and distribution companies (DISCOMs). These entities became licensees under Sections 172 and 185 of the 2003 Act. 59. In the decision of the Supreme Court in State of Kerala vs. Attesee (Agro Industrial Trading Corporation) AIR 1989 SC 222, where the context was whether the reference to a repealed enactment was found in an new law, whether the benefit or entitlement in the previous one, could be inferred to be part of the new law, it was held as follows: "3. These are the relevant statutory provisions. On these the question to be considered is: what is the effect of the mention of the definition of "cotton ....
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....d) where the amendment of the previous Act, either expressly or by necessary intendment, applies the said provisions to the subsequent Act" 60. From the reading of Rule 11(XII) it can be seen that a dealer is entitled to deduct the turnover of sales made by him to any undertaking supplying electrical energy to the public in Delhi under a license or sanction granted or deemed to have been granted under the Supply Act. Unlike an exemption granted through a notification, the effect of the rule is to exclude a species of transaction from calculation of taxable turnover. Several decisions have settled the principle of law that a subordinate legislation validly made becomes a part of the Act and should be read as such. 61. This proposition had been earlier stated as follows, in Bhuri Nath & Ors. vs. State of J&K & Ors1997 (2) SCC 745 which held that : "The guidelines framed by the Governor are by exercising the rule-making power under Section 24 of the Act. So they acquired the status as subordinate legislation and became integral part of the proviso to Section 19 of the Act." 62. Likewise, in State of U.P. v Babu Ram AIR 1961 SC 751; State of Tamil Nadu v Hind Stone AIR 1981 SC 711....