AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 1250
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....facts leading to these appeals are that the assessee-company is engaged in the distribution of power in the state of Rajasthan. The assessee-company purchases power from the generating company namely the Rajasthan Rajya Vidhyut Utpadan Nigam Ltd. (RVPN) and sells it to the consumers. The power from the generation point to the consumers is transmitted through the transmission network of RVPN. The assessee-company has entered into a "transmission service agreement" with RVPN for the transmission of power. The Jodhpur Vidyut Vitran Nigam Ltd., the assessee (hereinafter referred as Jd.V.V.N.L.) is a Company incorporated under the Companies Act 1956 on 19-06-2000 as a 100% Government company in consonance with a mandate prescribed under the Raja....
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....of electricity industry, promoting competition therein, protecting interest of consumers and supply the electricity to all areas, rationalization of electricity tariff etc. 2.2 The Statement of Objects and Reasons appended to the Electricity Act, 2003 provided inter alia as under: "1.3 Over a period of time, however, the performance of State Electricity Boards has deteriorated substantially on account of various factors. For instance, though power to fix tariffs vests with the State Electricity Boards, they have generally been unable to take decisions on tariffs in a professional and independent manner and tariffs determination in practice has been done by the State Governments. Cross-subsidies have reached unsustainable levels. A....
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....g and dispatch of electricity. Section 31 mandates the State Governments to establish a State Load Dispatch Centre for discharging the specified functions. The observations of the A.O. in this case were as under: "1. The payment made by the assessee to RVPN is a payment of technical service liable for deduction of tax at source u/s 194J inter alia for the following reasons. 2. The title of the agreement itself speaks that whatever work is being done by the RVPN for the assessee is service. 3. Transmission of electricity is a technical service in itself as it requires constant involvement of technical system consisting of sophisticated instruments and technical ability and knowledge to operate and manage the system. All these requir....
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....hyut Prasaran Nigam Ltd. for transmission of electricity through its transmission line from the generation point to its distribution point. 2.7 Transmission Utility - Section 39 of the Electricity Act, 2003 provides that the State Government may notify a Government Company as a State Transmission Utility. In pursuance to this the State Government has notified RVPN to be a State Transmission Utility. As per this section, the function of the State Transmission Utility is to ensure development of any efficient, coordinated and economical system of intra-state transmission lines for smooth flow of electricity from generating station to load centers. As a part of its duty it is also to maintain and operate the system in an efficient, co-ordina....
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....as RVPN. Thus when all the parties involved with generation to distribution of electricity are to comply with direction of State Load Dispatch Centre and Regulatory Commission ensuring integrated grid operation and for achieving the maximum economy and efficiency in the operation of the power system in the State, the question of any person given service to another does not arise. As a transmission licensee, the RVPN is to comply with the technical standard of operation and maintenance of transmission lines in accordance with the Grids Standard as may be specified by the Authority. The operation and maintenance of transmission lines by RVPNL and the user of these lines by assessee for transmitting energy does not result into any technical se....
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....at the payment of transmission/wheeling/SLDC charge is reimbursement of the cost ….". 5.1 The ITAT Jaipur Bench further held that: "The Chennai Bench of ITAT in case of Singapore Airlines Ltd Vs. ITO 7 SOT 84 [Chennai] on the issue of levy of interest u/s 201(1A) has held as under: The Gujarat High Court held that if the revenue is permitted to levy interest u/s 201(1A) of the Act, even in a case where the person liable to pay tax has paid the tax on the date due for the tax the revenue would derive undue benefit or advantage by getting interest on the amount of tax which had already been paid on the due date. According to the Gujarat High Court such a position cannot be permitted. The CBDT has also clarified in the Circular ....