INDIAN ALUMINIUM COMPANY LTD Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) These writ petitions were referred to Division Bench by a learned single Judge of this Court. The petitions are filed by Indian Aluminium Company Ltd., (referred hereinafter as 'the petitioner') and one of its Shareholders. The substance of the several reliefs sought, is, to restrain the enforcement of revised rates of electricity tax with effect from 18-8-1981 and/or, for a direction to the first respondent to reimburse the petitioner of the amounts paid which is in excess of the rate of 3% of the invoice amount as specified in clause 6(c) of the Agreement between the parties. The other prayers are all incidental or ancillary to the basic relief sought, by the petitioner.

(2.) The plea of the petitioner is as follows : In the year 1966 the Government of Mysore had undertaken the Sharavathi Valley Hydro Electric Project in the State and had plans for the construction of a hydroelectric generating system to generate a large quantity of electric power. At this point of time the respondent State was anticipating a large surplus of power. In view of the fact that aluminium requires large amount of power for its manufacture, the 2nd respondent Board and the State invited and/or encouraged the petitioner to establish the said factory at Belgaum. At all material times Karnataka Electricity (Taxation on Consumption) Act 1959 (hereinafter referred as 'the Taxation Act') was and is in force. This law imposed a tax on the units of electricity consumed every month. The tax was calculated, as per Sec- tion-3, at a rate not exceeding six paise per unit of energy as may, by notification, be specified by the State Government and different rates may be specified in respect of different classes of consumers. Other provisions of this Taxation Act relating to certain formulas, to determine the units of consumption, payment of tax etc., need not be referred here. In March 1966, a tripartite agreement was entered into between the petitioner, the State Government and the Board, terms of which provide for the supply of electricity to the petitioner's factory at Belgaum, the rate to be applied for the price of electricity supplied and the other matters. Clause 6(c) of this agreement provided for the levy and payment of electricity tax. It limited the tax or duty liability of the petitioner to 3% of the invoice amount during the first 25 years period and thereafter to 6% of such invoice amount during the next 25 years period. The clause, further stated that,

(3.) It is unnecessary to refer to the statement of objections filed on behalf of respondents 2 to 5 (the Board and its Officers). It was in fact admitted by the counsel for the Board that the Board is not affected by the reliefs sought by the petitioner in the writ petitions.