CIVIL Appeal No 582 of 1960
Appeal from the judgment and order dated February 5 1959 of the Madhya Pradesh High Court Gwalior Bench at Indore in Civil Misc
Case No 11 of 1959
A V Viswanatha Sastri Rameshwar Nath section N Andley and P L Vohra for the appellant
B Sen B K BNaidu and I N Shroff for the respondent
284 1961
October 31
The Judgment of the Court was delivered by MUDHOLKAR J
This is an appeal on a certificate of fitness granted by the High Court of Madhya Pradesh under article 133 1 a of the constitution
The appellant is a textile mill at Gwalior in Madhya Pradesh
It generates electricity for the purpose of running its mills and for other purpose connected therewith
It does not sell electrical energy to any person
Under the provisions of the Central Provinces and Berar Electricity Duty Act 1949 No 10 of 1949as amended by the Madhya Pradesh Taxation Laws Amendment Act 1956 Act No 7 of 1956 the Government of Madhya Pradesh levied upon the appellant electricity duty amounting to Rs 278417 for a certain period
The appellant paid it under compulsion and thereafter preferred a writ petition to the High Court of Madhya Pradesh under article 226 of the Constitution in which it challenged the validity of the levy on two grounds
The first ground was that upon a proper construction of section 3 of the C P  Berar Electricity Duty Act 1949 as amended by the Madhya Pradesh Taxation Laws amendment Act 1966 the appellant would not be liable to pay any duty at all
The second ground was that if the Act permitted the levy of duty on electricity consumed by the producer himself it was ultra vires the Constitution because in substance it would be a duty of excise which can be levied only by Parliament under Entry 84 of List I and that oven if it was not excise duty it was beyond the competence of the Madhya Pradesh legislature to levy it in the absence of any appropriate entry in List II
The petition was summarily rejected by the High Court but upon an application made by the appellant it granted to it certificate of fitness as already stated
285 Mr Viswanatha Sastri has reiterated before us the same grounds which were urged in the High Court
For the purpose of appreciating the first ground it would be useful to reproduce the terms of B 3 of the Act
The section runs thus Levy of duty on sale or consumption of electrical energy Subject to the exceptions specified in Section 3 A every distributor of electrical energy and every producer shall pay every month to the State Government at the prescribed time and in the prescribed manner a duty calculated at the rates specified in the Table below on the units of electrical energy sold or supplied to a consumer or consumed by himself or his employees during the preceding month
Table Rates of Duty i Electrical energy supplied for consumption for lights fans of any other appliances normally connected to a lighting circuit
6 nP per unit of energy
ii Electrical energy supplied for purposes other than those specified in item i above
1 nP per unit of energy
This is the charging section
It is not disputed by Mr Sastri that under this provision a producer of electrical energy is made liable to pay duty for the units of electrical energy consumed by himself
He however contends that rates of duty have been prescribed in the Table below section 3 only with respect to electrical energy supplied for consumption to others and that no rates have been prescribed with 286 respect to electrical energy consumed by the producer himself
Section 2a of the Act defines consumer
The definition so far as relevant runs thus  Consumer  means any person who consumes electrical energy sold or supplied by a distributor of electrical energy or a producer    Producer  as defined section 2d 1 of the Act means a person who generates electrical energy at a voltage exceeding hundred volts for his own consumption or for supplying to others
If we read the two definitions together omitting the non essentials consumer  would include  any person who consumes electrical energy supplied by a person who generates electrical energy for his own consumption
under section 3 a person who generates electrical energy over hundred volts for his own consumption is liable to pay duty on the units of electrical energy consumed by himself
A producer consuming the electrical energy generated by him is also a consumer that is to say he is a person who consumes electrical energy supplied by himself
The Table prescribes rates of duty payable with respect to electrical energy supplied for consumption and therefore the levy on the appellant falls squarely within the Table under section 3 of the Act and Ms Viswanatha Sastri s argument is devoid of substance
It is difficult to see how the levy of duty upon consumption of electrical energy can be regarded as duty of excise falling within Entry 84 of List I
Under that Entry what is permitted to Parliament is levy of duty of excise on manufacture or production of goods other than those excepted expressly by that entry
The taxable event with respect to a duty of excise is manufacture or production
Here the taxable event is not production or generation of electrical energy but 287 its consumption
If producer generates electrical energy and stores it up he would not be required to pay any duty under the Act
It is only when he sells it or consumes it that he would be rendered liable to pay any duty prescribed by the Act
The Central Provinces and Berar Electricity Act was enacted under Entry 48B of List II of the Government of India act 1935
The relevant portion of that Entry read thus Taxes on the consumption or sale of electricity   Entry 53 of List II of the Constitution is to the same effect
The argument of Mr Sastri is that the word consumption should be accorded the meaning which it had under the various Act including the Indian Electricity Act 1980
Under that Act and under the various Provincial and Act consumption of electricity mean according to him consumption by persons other than producers and that both in the Government of India Act any under the Constitution the word consumption  must be deemed to have been used in the Fame sense
The Acts in question deal only with a certain aspect of the topic  electricity and not with all of them
Therefore in those Acts the word consumption they have a limited meaning as pointed out by learned counsel
But the word consumption has a wider meaning
It means also use up spend etc
The mere fact that a series of laws were concerned only with a certain kind of use of electricity that is consumption of electricity by persons other than the producer cannot justify the conclusion that the British Parliament in using the word consumption in Entry 48B and the Constituent Assembly in Entry 53 of List he wanted to limit the meaning of consumption in the same way
The language used in the legislative entries in the Constitution must be interpreted in a broad way so as to give the widest amplitude of power to the legislature to legislate and not in a narrow and pedantic sense
we 288 cannot therefore accept either of the two grounds urged by or
Viswanatha Sastri challenging the vires of the Act
The appeal fails and is dismissed with costs


Summary:
The appellant mill produced electricity over 100 volts exclusively for its own consumption
It challenged the levy of the electricity duty by the Government of Madhya Pradesh 1  283 under the C P and Berar Electricity Act as 1949 by the Madhya Pradesh Act 7 of 1956 on the grounds firstly that on proper construction of section 3 of the Act it was not liable to pay any duty at all as the Table of rates did not prescribe any rate for electricity consumed by producers and secondly the levy of duty on electricity consumed by producer himself being in substance an excise duty could be levied only by the Parliament under Entry 84 List I
If it was not an excise duty the levying of it was beyond the competence of the State Legislature in the absence of any appropriate Entry in the List  Held that on a combined reading of the definition of consumer  in section 2a and producer  in section 2d 1 of the C P  Berar Act 10 of 1949 a producer consuming the electrical energy generated by him is also a consumer as he consumes electrical energy supplied by himself falls squarely within the Table under section 3 of the Act prescribing rates of duty payable by a consumer and is therefore liable to pay duty thereunder
Held further that the present Act for levy of duty upon consumption of electric energy was enacted under Entry 45B of the List II of the Government of India Act 1935 corresponding to Entry 53 of List II of the Constitution where as the levy of duty of excise on manufacturer production of goods by Parliament is under Entry 84 of List I The taxable event with respect to a duty of excise is manufacture  or production  and not consumption  the levy upon consumption of electric energy cannot be regarded as duty of excise falling within Entry 84 of List I Held also the language used in the Legislative Entries in the Constitution must be interpreted in a broad way so as to give the widest amplitude of power to the Legislature to legislate and not in a narrow and pendantic sense