BHARATI AIRTEL LTD Vs. STATE OF ASSAM

JUDGEMENT

(1.) THE levy of electricity duty under the Assam Electricity Duty Act, 1964 (hereinafter referred to as the -Duty Act-) is challenged by the petitioner companies, who generate electricity during power failure, to continue the operation of their cellular phone service. As the taxable event under Section 3(1)(c) of the Duty Act, is on generation of electricity, the petitioners question the legislative competence of the State, to levy tax on power produced by them afor captive consumption, by referring to the relevant entries in the lists of the Seventh Schedule to the Constitution of India. The burden of electricity duty on cellular phone service provider is contended to be discriminatory since, unlike the power companies, who are subject to such electricity duty, the cellular companies/ or those providing infrastructure support to them, do not supply electricity on commercial basis, to others. Since uninterrupted cellular service is essential for their business module, the operators are compelled to arrange back up generation of electricity on account of failure of the State's power company to provide uninterrupted power supply, notwithstanding the obligation under Section 43 of the Electricity Act, 2003, on the licencee company. Moreover according to the petitioners, the respondents have failed to prescribe a practical mechanism for realization of electricity duty and accordingly it is contended to be unworkable. One peripheral issue arise out of the exemption limit of 25 KVA and the petitioners seek exemption conferred upon this category, under the govt. notification dated 7.5.2013.

(2.) WE have heard Mr. M.K. Choudhury, the learned Sr. counsel appearing for the petitioner in the WP(C) No.710/2010. The learned advocate Mr. M. Sarma, represents the petitioner in the WP(C) No.3938/2010. The petitioners in the WP(C) Nos.1446/2010 and 1427/2010 respectively, have amalgamated on 03.06.2010 into M/s ATC Telecom Infrastructure Pvt. Ltd. and they are represented here by Mr. M. Choudhury, the learned counsel. The respondents are represented by Mr. D. Saikia, the learned Addl. Advocate General, Assam, assisted by the Govt. advocates Mr. B. Choudhury and Mr. B. Gogoi.

(3.) FOLLOWING the decision to abolish the central excise duty on electricity w.e.f. 01.10.1984, the States were to be compensated for the resultant loss of revenue. With this objective, electricity duty was imposed on the licenced power company who supply electricity to the consumers on tariff basis. But through the charging Section 3(1)(c) in the Duty Act, those who generate electricity for self-consumption, were also made liable to pay electricity duty.