TaxTMI 
TaxTMI 
2025 (4) TMI 2120
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....ellant would mainly contend that the TANGEDCO is the major beneficiary with procurement of power from the second respondent to the tune of around 2,200 MW of thermal power, by virtue of various Power Purchase Agreements entered between the TANGEDCO and N.L.C. India Limited. It is mainly contended that the writ Court has relegated the appellant to approach the Central Electricity Regulatory Commission (for short, "the CERC") for adjudication of issues. The CERC has no jurisdiction to adjudicate the income tax related issues and therefore the writ Court ought to have adjudicated the merits of the case. The appellant is paying the admitted arrears of several thousand crores of rupees and the DISCOMS like TANGEDCO have to face serious consequences towards regulation of power supply in case of non-payment of the disputed dues. The debit note raised by the second respondent through PRAAPTI Portal is unsustainable, on the ground that it is a time barred claim, no prior intimation or consultation or consent of the appellant has been made nor the details regarding the income tax arrears have been stated. The unilateral debit note raised in the PRAAPTI Portal is not only bereft of details, b....
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....tertained or allowed if it is found legally not recoverable in a regular suit or any other regular proceeding such as arbitration, on account of law of limitation." 6. The learned Senior Counsel Mr.Arvind P.Datar appearing on behalf of the N.L.C. India Limited would oppose by stating that the powers of the Central Commission is traceable. Thus the writ Court is right in relegating the appellant to approach the CERC. The Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2001 was notified on 26.03.2001 and came into force with effect from 01.04.2001. As per clause 2.12 of the said Regulations, tax on income from core activity of the generating company, if any, is to be computed as an expense and shall be recoverable by the generating company from the beneficiaries. Thus the second respondent is well within its powers to claim income tax paid by it. In the present case, the N.L.C. India Limited availed the beneficial one time scheme announced by the Income Tax Department and settled the income tax demands to the Department and thereafter raised the said income tax claim by uploading the same in the PRAAPTI Portal. Thus there is no infirmity. As....
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....sion. Provided that in case of any objections by the beneficiaries to the amounts claimed on account of income-tax or Foreign Exchange Rate Variation, the generating company or the transmission licensee, as the case may be, may make an appropriate application before the Commission for its decision." 11. As per the above provision, the second respondent is entitled to recover income tax and foreign exchange rate variation from the beneficiaries, without making any application before the Commission. However, in case of any objection by the beneficiaries to the amounts claimed on account of income tax, the generating company or the transmission licensee, as the case may be, may make an appropriate application before the Commission for its decision. 12. In the present case, the second respondent-N.L.C. India Limited filed Petition No.135/MP/2023 under Section 79(1)(a) and (f) of the Electricity Act, 2003 and the CERC disposed of the petition on 10.07.2023 observing as follows:- "8. The interim orders of the Hon'ble High Courts, as aforesaid, are still continuing. Further, the main prayer of the Writ Petitioners, for a declaration that the debit notes generated b....
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....the Electricity Act could be adjudicated upon only by the civil court and not by the Central Commission. 29. As per these decisions, where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution. In fact, clause 1.7 of the Regulations 2001 empowers the generating company for recovery of Income Tax from the beneficiaries even without filing a petition before the Central Commission. If any objection is raised by the beneficiary with regard to quantum of the amount by way of reimbursement of income tax, the generating utility may file an appropriate petition before the Central Commission for recovery. Thus, the right of the Corporation to file a petition for reimbursement of income tax before the Central Commission where the beneficiary omitted to make a reimbursement of income tax as due, is a statutory right available to the Corporation under Regulations. It, therefore, follows that the Central Commission possesses the right not only to entertain such an application but also dispose the same in accordance with law by doing such acts which are necessary for is execution."....
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.... such petition by the generating company before the CERC, the appellant would get ample opportunity to adjudicate all the issues including the issues relating to re-determination of tax, limitation, etc. Therefore, the appellant will be getting an opportunity to defend their case before the CERC and thus the writ Court has rightly relegated the parties to approach the CERC. 17. Further it is stated that on account of raising of debit note/invoice to the tune of Rs.184 Crores towards income tax, the Power Grid connectivity of TANGEDCO would not be disturbed and rather the generating company would approach the CERC for adjudication of issues in order to determine the liability. In view of the said submission, the apprehension of the appellant that there is a possibility of electricity crisis on account of disconnection throughout the State need not be considered. Since the income tax demand is relating to several assessment years, the issues are to be determined and merely on the ground of non-payment of income tax arrears to the tune of Rs.184 Crores, the respondents cannot effect disconnection of electricity, which would cause great prejudice to the appellant. 18. Moreover, t....