IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 09.12.2011 CORAM: THE HON'BLE MR.JUSTICE V.DHANAPALAN W.P.No.25811 of 2011 and M.P.Nos.1 to 3 of 2011 M/s.Mahendra Spinning Mills Private Limited, represented by its Director, No.15, New Damunagar, Puliakumam, Coimbatore-641 037. .. Petitioner Versus 1. The Government of Tamil Nadu, represented by its Secretary to Govt., Energy Department, Fort St.George, Chennai-9. 2. Tamil Nadu Electricity Board (TNEB), represented by its Chairman, 144, Anna Salai, Chennai-600 002. 3. Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), represented by its Chairman and Managing Director, 144, Anna Salai, Chennai-600 002. 4. The Superintending Engineer, Coimbatore Electricity Distribution Circle-South, Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), Tatabad, Coimbatore-641 012. .. Respondents Prayer: This Writ Petition is filed under Article 226 of the Constitution of India, praying for the issuance of Writ of Certiorari, to call for the records of the 2nd respondent culminating in his impugned proceedings bearing Circular Memo No.CFC/R/FC/R/D.No.131/ dated 5.7.2010, quash the same as being violative of the Tamil Nadu Tax on Sale or Consumption of Electricity Act, 2003 and also as unconstitutional. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner : Mr.Arun Anbumani For Respondents: Mr.M.Dig Vijayapandian, AGP for R1 Mr.G.Vasudevan for R2&R3 Mr.S.K.Rameswar for R4 ORDER Heard Mr.Arun Anbumani, learned counsel appearing for the petitioner and Mr.Dig Vijayapandian, learned Addl.Government Pleader, appearing for first respondent, Mr.G.Vasudevan, learned standing counsel for TNEB, appearing for second and third respondents and Mr.S.K.Rameshwar, learned counsel for fourth respondent. 2. In this Writ Petition, the petitioner has sought for Writ of Certiorari, to call for the records of the 2nd respondent culminating in his impugned proceedings bearing Circular Memo No.CFC/R/FC/R/D.No.131/ dated 5.7.2010, quash the same as being violative of the Tamil Nadu Tax on Sale or Consumption of Electricity Act, 2003 and also as unconstitutional. 3. The brief facts which led to the filing of the present writ petition are as follows: 3.1. The Accountant General (Audit) has pointed out that the E Tax is to be levied for the CC amount before deduction of the incentive allowed for power factor and night hour rebate as per the provisions of the Act and due to misinterpretation of the provisions of the Act, there was short collection of E Tax. In this regard, the Tamil Nadu Government (Energy Department) was requested to clarify whether the Electricity Tax has to be levied after deduction of incentive allowed for higher power factor and night hour rebate (or) before such deductions (of incentive allowed for power factor and night hour rebate) so as to get the audit objection raised by the AG Audit party to be dropped. The Energy Department/Tamil Nadu Government clarified that Section 2(7) specifically provides for the inclusion of power factor surcharge within the ambit of 'consumption charge' and it does not provide for the exclusion of the incentives given by the Licensee to the consumer for maintaining higher power factor and as such the incentive earned for maintaining higher power factor cannot be deducted from the consumption charges. Accordingly, based on such clarification, the Chief Financial Controller of Tamil Nadu Electricity Board, by the impugned communication, dated 5.7.2010 instructed to all the Superintending Engineers/Distribution Circles as well as the Chief Engineers/Distributions, to calculate the electricity tax before deduction of incentive allowed for power factor and night hour rebate in respect of HT services and before deduction of incentive allowed for high power factor in respect of LT CT/LT services and collect the same in all cases wherever due. https://hcservices.ecourts.gov.in/hcservices/ Pursuant to the impugned proceedings, dated 5.7.2010 of the second respondent, the Superintending Engineer, CEDC/S/Coimbatore by his proceedings in Lr.No.SE/CEDC/S.DFC/AO/REV/AS/F.IT/D../11, dated 24.10.2011, directed the petitioner to pay the short levied amount of Rs.67,205/- stating that on verification of HT Bills of the petitioner HT services, it is found that an amount of Rs.67,205/- from April 2003 to July 2010 was due by the petitioner. Aggrieved by the same, the petitioner has come forward with the present writ petition. 4. When the matter is taken up today for hearing, the learned counsel appearing for the petitioner would submit that the issue involved in the writ petition is covered by a decision of the Division Bench of this Court in W.P.No.25572 of 2011 and 26190 of 2011 and therefore, the learned counsel for the petitioner prays to pass similar orders in this writ petition. 5. In similar writ petition in W.P.No.25572 of 2011, the Division Bench of this Court in its order, dated 14.11.2011 has held as under in paragraphs 2 to 5: "2. We have heard Mr.N.L.Rajah, learned counsel for the petitioner and Mr.G.Vasudevan, learned counsel for the respondents 2 & 3. 3. It is the contention of Mr.Rajah that in terms of Section 9 of the Tamil Nadu Tax on Consumption or Sale of Electricity Act, the demand could be made only after a reasonable opportunity being given to the consumers and in any case the demand of electricity tax payable under the Act shall not be made beyond a period of four years. By virtue of the impugned circular, the members of the petitioner- Association apprehend that the demand could be made contrary to the provisions of Section 9 and for that reason, the petitioner-Association is constrained to challenge the circular. 4. Mr.G.Vasudevan, learned counsel for the respondents 2 & 3, on the other hand, would submit that the impugned circular is only to clarify the provisions of Section 2(7) and inasmuch as the members of the petitioner- Association have not been issued with any demand, the writ petition is premature and is liable to be rejected. He would also submit that the writ petition at the instance of the Association is not maintainable, as the individual member could alone challenge. https://hcservices.ecourts.gov.in/hcservices/ 5. We have considered the above submissions. The fact remains that the impugned circular is one clarifying Section 2(7) of the Act with a further direction to the Superintending Engineers/Chief Engineers to demand the electricity tax from the consumers. However, the question is as to whether in terms of Section 9, at the time of demand, an opportunity of being heard is contemplated to the consumers and the demand could be made beyond a period of four years. These are all matters which are not available to the members of the petitioner- Association as of now till such time they are issued with the individual demand notice. In that view of the matter, the contention of Mr.G.Vasudevan that the writ petition is premature is well founded. Accordingly, we are not inclined to entertain the writ petition and the same is liable to be rejected. However, as we have found that by the impugned communication the respective officers have been directed to make the demands, till such time demands are made in terms of the provisions of the Act, the petitioner cannot question the circular as such on mere apprehension. It is always open to the members of the petitioner-Association to canvass all the points raised in this writ petition including the point that the demand cannot be made without opportunity and beyond a period of four years, before the authority by way of objections opposing the demand of electricity tax. Hence, the writ petition stands rejected. Consequently, M.P.Nos.1 to 3 of 2011 are also rejected. No costs." 6. In another similar writ petition in W.P.No.26190 of 2011, the Division Bench of this Court in its order, dated 14.11.2011 has held as under in paragraph 3: "3. The question as to whether the demand could be made for a period beyond four years prior to the date of demand and as to whether at the time of demand, the provisions of Section 2 (12) read with Section 3 relating to the net charge had been duly taken into consideration or not, are all matters not to be adjudicated at this point of time, for the simple reason that the impugned order is liable to be set side on https://hcservices.ecourts.gov.in/hcservices/ the sole ground that before such a demand is made, the petitioner-consumer has not been afforded an opportunity as required under Section 9 of the Act. ON the said ground alone, we are inclined to interfere with the impugned order. Accordingly, the Writ Petition is allowed, the impugned order will be treated as a show cause notice and the petitioner is at liberty to make objections on all the available grounds including the grounds which we have referred to in this order, in a period of 15 days from the date of receipt of a copy of this order before the third respondent. In the event such objections are received, the third respondent shall consider the same and after affording opportunity to the petitioner, pass a fresh order of demand. We also make it clear that in the event, the petitioner fails to make any objection within the period stipulated in this order, the third respondent is entitled to proceed further on the basis of the impugned demand. As we have directed that the impugned order shall be treated to be one of show cause notice, till such time final order is passed, in the event of receipt of objection as directed, the third respondent shall not disconnect the electricity service connection of the petitioner. We further make it clear that this order is with reference to the demand made in the impugned proceedings. With these observations and directions, the writ petition is allowed. Consequently, M.P.Nos.1 and 2 of 2011 are closed. No costs." 7. Following the above the Division Bench orders of this Court, this Writ Petition is disposed of, treating the impugned proceedings of the fourth respondent/Superintending Engineer, CEDC/S/Coimbatore by his proceedings in Lr.No.SE/CEDC/S.DFC/AO/REV/AS/F.IT/D../11, dated 24.10.2011, as a show cause notice and the petitioner is at liberty to make objections on all the available grounds within a period of 15 days from the date of receipt of a copy of this order before the fourth respondent. In the event such objections are received, the fourth respondent shall consider the same and after affording an opportunity of hearing to the petitioner, pass a fresh order of demand. It is also made clear that in the event, the petitioner fails to make any objection within the period stipulated in this order, the fourth respondent is entitled to proceed further on the basis of the impugned demand. As this Court directed that the impugned demand shall be treated as show cause notice, till such time the final order is passed, in the event of receipt of objection as directed, the fourth respondent shall not disconnect the electricity https://hcservices.ecourts.gov.in/hcservices/ service connection of the petitioner. No costs. Consequently, connected MPs are closed. Sd/ Asst.Registrar //True Copy// Sub.Asst.Registrar suk 1. The Government of Tamil Nadu, represented by its Secretary to Govt., Energy Department, Fort St.George, Chennai-9. 2. Tamil Nadu Electricity Board (TNEB), represented by its Chairman, 144, Anna Salai, Chennai-600 002. 3. Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), represented by its Chairman and Managing Director, 144, Anna Salai, Chennai-600 002. 4. The Superintending Engineer, Coimbatore Electricity Distribution Circle-South, Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), Tatabad, Coimbatore-641 012. 1 cc to Mr.S.K.Rameswar ,Standing Counsel, Sr.No.75796 W.P.No.25811 of 2011 & M.P.Nos.1 TO 3 /2011 bvr(co) pmk.4.1.2012 https://hcservices.ecourts.gov.in/hcservices/