TaxTMI 
TaxTMI 
2022 (8) TMI 489
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.... Lalit Parihar, Advocate, submitted that the petitioner company is involved in various commercial activities and established a captive power plant for the purpose of its own consumption and the consumption of its sister concern "Guljag Gases Pvt. Ltd." He submitted that both the companies are closely held and the Board of Directors belong to same family. The industrial units of both the companies are located within the same chunk of land bearing Khasra No.166 at Village Palari Khichiyan, District Jodhpur. Thus, as per Shri Johari, the consumption of electricity by sister concern Guljag Gases Pvt. Ltd., has to be treated as consumption of captive power and not as sale and hence, the same cannot be subjected to electricity duty. The impugned action of the respondents in demanding electricity duty from the petitioner on the premise that the petitioner company, indulged in sale of electricity to Guljag Gases Pvt. Ltd., is totally unjustified and illegal and hence, the impugned demand notices and so also, the orders passed by the Appellate Authority and Revisional Authority, affirming the demand of electricity duty vide impugned demand orders, deserve to be struck down. Shri Johar....
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.... petitioner on the energy sold to Guljag Gases Pvt. Ltd.. He placed reliance on the following judgments in support of his contentions and implored the Court to dismiss the writ petition and affirm the assessment orders and so also, the orders passed by the Appellate Authority and the Revisional Authority :- (1) Collector of Central Excise & Ors. Vs. Solaris Chemtech Ltd. & Ors. reported in (2007) 7 SCC 347 and, (2) Maruti Suzuki Limited Vs. Commissioner of Central Excise, Delhi III reported in (2009) 9 SCC 193. We have given our thoughtful consideration to the submissions advance at bar and have gone through the material available on record. The relevant statutory provision, i.e. Section 3 of the Rajasthan Electricity Duty Act, 1962, is reproduced hereinbelow for the sake of ready reference :- "3. Electricity duty on energy consumed.- There shall be levied for, and paid to, the State Government on the energy consumed by consumer or by a person other than a supplier generating energy for his own use or consumption a duty (hereinafter referred to as the "electricity duty") computed at such rate as may be fixed by the State Government from time to time....
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.... Act 35 of 1952); (b) Whether prospectively or retrospectively the electricity duty on the energy consumed by or in respect of any municipal board or council or Panchayat or Panchayat Samiti or other local authority for the purpose of or in respect of public street lighting; subject however, in the case of clause (a), to the condition that any reduction or remission so made shall not be applicable to energy consumed in respect of any premises used for commercial or residential purposes." A bare perusal of the statutory provision, makes it clear that exemption from payment of electricity duty on energy consumption, is available to a person other than a supplier generating electricity for "his/its own use or consumption". During the course of arguments, a pertinent query was put to learned Senior Counsel Shri Johari as to whether the petitioner company and Guljag Gases Pvt. Ltd. to whom, the electricity generated by the petitioner company was supplied, are different entities under the provisions of Income Tax Act to which, Shri Johari candidly conceded that both are separate juristic persons under the Income Tax and allied statutes. Another pertinent query ....
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....y linked up together. Renusagar has in reality no separate existence apart from and independent of Hindalco. Thus persons generating and consuming energy are the same. Therefore, by lifting the corporate veil Hindalco and Renusagar should be treated as one concern and Renusagar's power plant must be treated as the own source of generation of Hindalco. Renusagar should therefore, be liable to duty on that basis." Thus, the facts being under consideration of Hon'ble the Supreme Court in the case of Renusagar Power Co. Ltd., were totally distinguishable from the case at hand because neither of the two companies i.e. M/s Guljag Industries Ltd. and Guljag Gases Pvt. Ltd., was incorporated so as to act as a power source of the other. The facts under consideration of Hon'ble the Supreme Court in the case of A.P. Gas Power Corporation Ltd. (supra), are closer to the facts of the case at hand. That was also a case of sister concerns. Hon'ble the Supreme Court, considered the controversy 'in extenso' and held as below :- "48. As a result of the discussions held above and the findings as recorded by us, the position that emerges is that participating industries and the indu....