Appeal No 104 of 1970
From the Judgment and Order dated 23 10 1967 of the Patna High Court in Civil Writ Jurisdiction Case No 29966
LM Singhvi UP Singh and SN Jha for the Appellant
Sarjoo Prasad and US Prasad for the Respondent
The Judgment of the Court was delivered by KHANNA J
The short question which arises for determi nation in this appeal on certificate by Damodar Valley Corporation against the judgment of Patna High Court dis missing the writ petition filed by the appellant is whether the appellant is liable to pay electricity duty under Bihar Electricity Duty Act 1948 as amended by Bihar Electricity Duty Amendment Act 1963
The High Court answered the question in the affirmative against the appellant
The appellant is a corporation established under the for the development of the Damodar Valley in the States of Bihar and West Bengal
One of the functions of the appellant is the promotion and operation of schemes for the generation transmission and distribution of hydroelectric and thermal electrical energy
Bihar Electricity Duty Act 1948 Bihar Act 36 of 1948 hereinafter referred to as the principal Act was published in the Bihar gazette on October 1 1948
It was an Act for the levy of duty on the sales and consumption of electrical energy in the province of Bihar
Material part of sec tions
3 and 4
as they stood before the amendment made in 1963 read as under 3 Incidence of duty 1 There shall be levied and paid to the State Government on the units of energy consumed or sold excluding losses of energy in the transmission and transformation a duty at the rates specified in the First Schedule Provided that no duty shall be leviable on units of energy  i   ii  iii  iv   120 v consumed by or in respect of or sold for consumption in any a mine as defined in the Indian Mines Act 1923 b industrial undertaking except to the extent specified in the Second Schedule vi 2  4
Payment of duty  I  Every licensee shall pay every month to the State Government at the time and in the manner prescribed the proper duty payable under section 3 on the units of energy consumed by him or sold by him to the con sumer
2 Every licensee may recover from the amount which falls to be paid by the licensee as duty in respect of energy sold to the consumer
3  4  4a  5 
The principal Act was amended by Bihar Electricity Duty Amendment Act 1963 Bihar Act 20
of 1963 hereafter referred to as the amending Act
The amending Act received the assent of the President on December 4 1963 and was published on December 17 1963
By section 2 of the amending Act new section 3 was substituted for the old section 3
Material part of new section 3 read as under 3
Incidence of duty1 Subject to the provision of sub section 2 there shall be levied and paid to the State Government on the units of energy consumed or sold excluding losses of energy in transmission and transformation a duty at the rate or rates specified in the Schedule
2 No duty shall be leviable on units of energy a  b  c  d  e consumed by the Damodar Valley Corporation for the generation transmission or distribution of electricity by that Corporation f  3  121 Amendment was also made in the First Schedule of the principal Act
The relevant part of the sched ule read as under  THE SCHEDULE See section 3 RATES OF DUTY A For a mine or an industrial under Such rateor rates taking save in respect of its not exceeding 2 naya premises used for residential or paisa per unit of office purpose energy as may from time to time be fixed by the State Govern ment with the previ ous consent of the President by order in this behalf
In the writ petition the appellant prayed for quashing three notices dated February 10 1965 issued by the Superintendent of Commercial Taxes Giridih as also his orders dated March 24 and 29 1966
By the impugned notices the Superintendent of Commercial Taxes called upon the appellant to show cause as to why penal action under the princi pal Act as amended should not be taken against the appellant for having failed to get itself registered under that Act
The appellant was also called upon to apply for registration
By the impugned orders the Superintendent of Commercial Taxes directed
the appellant to pay electricity duty under the Act as amended
The case of the appellant was that it enjoyed immunity from payment of tax under clause 1 of article 288 of the Constitution
No law satisfying the requirement of clause 2 of article 288 it was contended had been made warranting the levy of such a duty
The High Court repelled this contention and we find no sufficient ground to take a different view
Article 288 of the Constitution reads as under 2881 Save in so far as the President may by order otherwise provide no law of a State in force immediately before the comencement of this Constitution shall impose or authorise the imposi tion of a tax in respect of any water or electric ity stored generated consumed distributed or sold by any authority established by any existing law made by Parliament for regulating or develop ing any inter State river or river valley
Explanation
The expression law of a State in force  in this clause shall include a law of a State passed or made before the commencement of this Constitution and not previously repealed notwithstanding that it or parts of it may not be then in operation either at all or in particular areas
2 The Legislature of a State may by law impose or authorise the imposition of any such tax as is mentioned in clause  1  but no such law shall have any effect unless it has after having been reserved for the consideration of the President received his assent and if any such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority the law shall provide for the previous consent of the President being obtained to the making of any such rule or order
 10 1003 SCI76 122 Article 288 grants exemption from tax under any law of a State in respect of any water or electricity stored gener ated consumed distributed or sold by any authority estab lished by any existing law or any law made by Parliament for regulating or developing any inter State river or river valley except in certain cases
According to clause 1 of the article this exemption would not be available in respect of such tax imposed under any law of a State in force immediately before the commencement of the Constitu tion if the President by order so provides
Although the principal Act is a pre Constitution law being an Act of 1948 no order was admittedly made by the President with drawing the exemption in respect of the appellant from levy of such tax under the principal Act
Indeed there was no question of issue of any such order because the principal Act did not provide for the imposition of electricity duty upon a corporation like the appellant
Clause v of the proviso
to sub section 1  of section 3 of the principal Act expressly stated that no duty shall be leviable on units of energy consumed by or in respect of or
sold for con sumption in any mine as defined in the Indian Mines Act or industrial undertakings except to the extent specified in the Second Schedule
The appellant is admittedly an industrial undertaking and as such was not liable
to pay electricity duty under the principal Act
The case of the respondentS is that the bar to the levy of the said duty was removed and the levy of the duty on the appellant was put on a sound legal basis as a result of the amendment made
in the principal Act by the amending Act of 1963
The amending Act we find satisfies the require ments of clause 2 of article 288
According to that clause the legislature of a State may by law impose or authorise the imposition of any tax mentioned in clause 1 of that article but no such law shall have any effect unless it has after having been reserved for the consider ation of the President received his assent and if any such law provides for the fixation of the rates and other inci dents of such tax by means of rules or orders to
be made under the law by any authority the law shall provide for the previous consent of the President being obtained to the making of any such rule or order
The amending Act of 1963 as already mentioned received the assent of the President before its publication
The exemption which was granted to mines and industrial undertakings from payment of elec tricity duty under the principal Act was withdrawn under the amending Act except to some extent with which we are not concerned
The new schedule substituted for the old sched ule by the amending Act prescribed the rates of duty for mines and industrial undertakings and it was provided that the rate of duty shall be such rate or rates not exceeding 2 naya paise per unit of energy as may from time to time be fixed by the State Government with the previous consent of the President by order in this behalf
It has been argued by Dr Singhvi on behalf of the appellant that the scheme of article 288 is to grant general exemption from the levy of tax in respect of any water or electricity stored generated consumed distributed or sold  by any authority established by any existing 123 law or any law made by Parliament for regulating or develop ing any inter State river or river valley
If any law made by a State legislature according to the submission seeks the imposition of any such tax such law should contain clear indication to that effect before it receives the assent of the President
The amending Act of 1963 ac cording to the learned counsel did not contain any such indication
This contention in our opinion is wholly devoid of force
Under proviso v to section 31 of the principal Act mines and industrial undertakings were exempt from levy of duty
This exemption stood withdrawn as a result of substitution of new section 3 for the old sec tion by the amending Act
The new charging section 3 1  roped in all industrial undertakings including the Damodar Valley Corporation for the purpose of levy of duty
Clause e of sub section 2 of new section 3 which was introduced by the amending Act of 1963
expressly granted exemption from levy of electricity duty on units of energy consumed by the appellant corporation for the generation transmission or distribution of electricity by that corporation
This provision
containing express reference to the appellant corporation clearly warrants the inference that in respect of units of energy not covered by clause e of sub section 2 of section 3 the exemption would not be available to the appellant
The contention advanced on behalf of the appel lant that the amending Act did not contemplate or contain indication regarding the imposition of electricity duty upon the appellant is plainly untenable for it would have the effect of Tendering clause e of sub section 2 of sec tion 3 to be wholly redundant
The courts it is well settled should be loath to accept an argument which would have the effect of rendering redundant the provision of a statute
Lastly it has been argued that though there has been an amendment of section 3 of the principal Act by its substitu tion by a new section under the amending Act of 1963 there has been no amendment of section 4 with the assent of the President
As such no liability to pay electricity duty can be fastened upon the appellant
This submission too is bereft of force
Section 3 as inserted by the amending Act of 19 63 is the charging section
According to clause 1 of that section subject to the provision of sub section 2 there shall be levied and paid to the State Government on the units of energy consumed or sold excluding losses of energy in transmission and transformation a duty at the rate or rates specified in the Schedule
The section thus deals with the incidence of duty and makes it clear that such duty has
to be paid on the units of energy consumed or sold and at the rate or rates specified in the schedule
It is further made clear by the section that the duty is to be levied and paid to the State Government
As the duty is to
be levied on the units of energy consumed or sold it would follow that the duty would have to be paid by the consumer or seller as the case may be
Section 4 of the principal Act merely provides for the manner and mode of payment of the duty and we find no substance in the conten tion that unless section 4 of the principal Act was also re enacted with the assent of the President the liability for payment of duty cannot be fastened upon the appellant
124 What is required by clause 2 of article 288 is that the law made by the State legislature for imposing or authorising the imposition of tax mentioned in clause 1 shall have effect only if after having been reserved for the consideration of the President it receives his assent
Another requirement of that clause is that if such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority the law shall provide for the previ ous consent of the President being obtained to the making of any such rule or order
It is however not the effect of that Clause that even if the above mentioned two require ments are satisfied the provisions which merely deal with the mode and manner of the payment of the aforesaid tax should also receive the assent of the President and that in the absence of such assent the provisions
dealing with the incidence of tax which have received the assent of the President would remain unenforceable
Some other aspects were also dealt with by the High Court but in the light of the view we have taken in the matter it is not necessary to deal with those aspects
The appeal consequently fails and is dismissed but in the circumstances without costs
PBR Appeal dis missed


Summary:
The proviso v to section 31 of the Bihar Electricity Duty Act 1948 provided that no duty shall be leviable on units of energy consumed by or in respect of or sold for con sumption in any mine or industrial undertaking except to the extent specified in the Second Schedule
In 1963 section 3 of the Act was amended and a new section 3 was
substituted for the old section 3
Sub section 2e of the new section states that no duty shall be leviable on units of energy consumed by the Damodar Valley Corporation for the generation trans mission or distribution of electricity by that Corporation
Item A of the First Schedule as amended in 1963 states that for a mine or an industrial undertaking the duty leviable shall be at such rate or rates not exceeding 2 naya paise per unit of energy fixed by the State Government with the previous consent of the president
The Amending Act re ceived the assent of the President
In response to notices issued by the Superintendent of Commercial Taxes calling upon the appellant to pay elec tricity duty under the Act as amended the appellant contended that it enjoyed immunity from payment of tax under cl
1 of article 288 of the Constitution no law satisfying the requirement of cl
2 of article 288
having been made
warranting the levy of such duty
The High Court dismissed the appellant s writ petition
Dismissing the appeal to this Court HELD 1 What is required by cl
2 of article 288 is that the law made by the State legislature for imposing or authorising the imposition of tax mentioned in cl
1 shall have effect only if i after having been reserved for the consideration of the President it receives his assent and ii that if such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority the law shall provide for the previous consent of the President being obtained to the making of any such rule or order
It is however not the effect of that clause that even if these two requirements are satisfied the provisions which merely deal with the mode and manner of the payment of the tax should also receive the assent of the President and that in the absence of such assent the provisions dealing with the incidence of tax which have received the assent of the President would remain unenforceable
123 H 124 A B 2 The contention of the appellant that the amending Act did not contemplate or contain any indication regarding the imposition of electricity duty upon the appellant is plain ly untenable for it would have the effect of rendering section 32e to be wholly redundant
Under proviso v to section 31 of the Principal Act mines and industrial undertakings were exempt from levy of duty
This exemption stood with drawn as a result of substitution of new section 3 for the old section by the amending Act
The new charging section 31 roped in all industrial undertakings including the Damodar Valley Corporation for the purpose of levy of duty
Section 32e introduced by the Amending Act of 1963 expressly granted exemption from levy of electricity duty on units of energy consumed by the appellant for the generation transmission or distribution of electricity by that Corpora tion
This provision containing express reference to the appellant Corporation dearly warrants the inference that in respect of units of energy not covered by section 32e the exemption would not be available to the appellant
123 A B 119 3 There is no substance in the contention that unless section 4 of the principal Act was also re enacted with the assent of the President the liability for payment of duty cannot be fastened upon the appellant
Section 3 of the Amending Act which deals with the incidence of duty makes it clear that such duty has to be paid on the units of energy consumed or sold and at the rate or rates specified in the schedule
As the duty is to be levied on the units of energy consumed or sold it would follow that the duty would have to be paid by the consumer or seller as the case may be
Section 4 of the
principal Act merely provides for the manner and mode of payment of the duty
123 F G