BIHAR SUGAR MILLS ASSOCIATION Vs. STATE OF BIHAR

JUDGEMENT

(1.) In these writ petitions, the primary challenge is to the validity of the provisions contained in Section 3(1) of the Bihar Electricity Duty Act, 1948 (hereinafter referred to as the Act) and also regarding the validity of the notification issued by the State Government fixing the rate of duty payable by the various sugar mills and other organizations generating electricity in their own power plants. The Act was enacted for the levy of duty on the sale and consumption of electrical energy in the State of Bihar. Its validity was once challenged in the Patna High Court mainly on the ground of lack of legislative competence. In decision reported in Indian Aluminium Co. v. State of Bihar (1992 (1) PLJR 55), the validity of Section 3(2) of the Act was upheld by observing that the electricity duty imposed was a "tax" and not a "fee" and the State had the necessary legislative competence.

(2.) The petitioners have been paying the aforesaid duty without demur. While the matters stood thus, the Act was amended by the Bihar Electricity Duty (Amendment) Act, 2002, whereby the Schedule was deleted and Section 3(1) was amended. After such amendment, Section 3(1) reads as follows :

(3.) In accordance with the power conferred by Section 3(1) as amended, the Government issued a notification - S.O. No. 137 dated 21-10-2002, wherein it is notified that the levy of duty on consumption or sale of electrical energy mentioned in Column 2 of the Schedule shall be at the rate specified in column 3 of the Schedule. The schedule appellded to such notification is extracted hereunder : <FRM>NP(2)_29_AIR(PAT)_2010.htm</FRM> The validity of Section 3(1) as amended by such amendment Act, has been challenged by the Bihar Sugar Mills Association and others by filing CWJC No. 4613 of 2003. In the said writ petition, the demand notices issued by the Sales-tax Authorities are also challenged.