CIVIL WRIT JURISDICTION CASE No.2483 of 1998 In the matter of an application under Article 226 of the Constitution of India. NATIONAL THERMAL POWER CORPORATION LIMITED (A Government of India Enterprise), having its registered office at NTPC Bhawan, `SCOPE’ Complex, 7, Industrial Area, Lodhi Road, New Delhi – 110 003, through the General Manager, Kahalgaon Super Thermal Power Project, at & Police Station – Kahalgaon, District Bhagalpur ……Petitioner Versus 1. THE STATE OF BIHAR through the Commissioner of Commercial Taxes, Government of Bihar, Finance (Commercial Taxes) Department, Patna 2. Commercial Taxes Officer (In-charge), Bhagalpur Circle, Bhagalpur 3. The Union of India through the Secretary, Ministry of Power, New Delhi 4. Central Electricity Authority through its Chairman having its office at `Sewa Bhawan’, R K Puram, New Delhi 5. Eastern Region Electricity Board through its Member Secretary, 14- Golf Club Road, Tolleyganj, Calcutta -700 033 6. West Bengal State Electricity Board through its Chairman, having its office `Vidyut Bhavan’, Block –DJ, Section –II, Salt Lake City, Calcutta -1 7. Orissa State Electricity Board through its Chairman, `Vidyut Bhawan’, Bhuvaneshwar – 781 007 8. Grid Corporation of India Limited, through its Chairman-cum- Managing Director, Janpath, `Vidyut Bhawan’, Bhuvneshwar -751 007 9. Government of Sikkim, through the Secretary, Department of Power, Kazi Road, Gangtok …………….. Respondents ********* For the Petitioner : Mr. Vikash Jain, Sr. Advocate For the State : Mr. Ahsanuddin Amanullah Government Advocate no.IX Mr. Arun Kumar Prasad Asstt. Counsel to GA no.IX Mr. Piyush Lall Asstt. Counsel to AAG III ********** P R E S E N T THE HON'BLE MR. JUSTICE SUDHIR KUMAR KATRIAR THE HON'BLE MR. JUSTICE SAMARENDRA PRATAP SINGH S K KATRIAR, J. This writ petition is directed against the order dated 12.2.98 (Annexure 11), passed by the learned Commercial Taxes Officer (In-charge), Bhagalpur Circle, Bhagalpur, as also the order dated 23.3.98 (Annexure 26/1), passed by the learned Commercial Taxes Officer (In-charge), Bhagalpur Circle, Bhagalpur. Annexure 11 has been passed in purported exercise of powers of assessment under the Bihar 2 Electricity Duty Act 1948 (hereinafter referred to as the Duty Act), read with the Bihar Electricity Duty Rules 1949 (hereinafter referred to as the Duty Rules). Annexure 26/1 seeks to revise the order marked Annexure 11, and is passed in purported exercise of powers under section 19 (1) of the Bihar Finance Act 1981 (hereinafter referred to as the Finance Act). The respondents have placed on record their counter affidavit and have supported the impugned action. 2. A brief statement of facts essential for the disposal of the writ petition may be indicated. The petitioner is a public sector undertaking of the Union of India and has set up a thermal power project for generation of electricity at Kahalgaon, close to the township of Bhagalpur, in the State of Bihar. The present proceeding relates to imposition and realization of duty in terms of section 3 of the Duty Act, surcharge in terms of section 3A of the Act, and the consequential incidents. The proceedings are with respect to the financial year 1994- 1995. The petitioner manufactures, generates and sells electricity power at its unit at Kahalgaon part of which is sold outside the State of Bihar, part of which is sold within the State of Bihar, and the balance is consumed by itself for maintenance of its factories, offices, and residential premises. The petitioner had submitted its return under the Duty Act, and was assessed to duty in terms of section 3 of the Duty Act by the impugned order marked Annexure 11, leading to the present writ petition. The duty was assessed as per the schedule framed in terms of section 3 of the Duty Act which was enforced with effect from 22.8.93. During the pendency of the present proceeding, respondent no.2 felt that appropriate portion of the schedule was not applied in the petitioner’s case resulting in assessment and quantification of duty at a lower slab. Consequently, he issued show-cause notice dated 7.3.98 (Annexure 15). The petitioner had shown cause to the same and defended Annexure 11. On a consideration of the materials before him, respondent no.2 passed the impugned order marked Annexure 26/1, whereby tax was assessed 3 and quantified at the higher slab, followed by the demand notice. In view of the Pendente Lite development, the petitioner filed IA No.12499 of 1998, seeking to challenge the validity of the same. It was allowed by order dated 3.11.98, whereby the petitioner was permitted to challenge the validity of Annexure 26/1, and the consequential demand notice. It may further be stated that the learned single Judge of this Court passed the following order on 8.12.98:- “This application will be heard by a Division Bench. All the respondents including Central Government have appeared, therefore, no notice need be issued. 2. In the meantime, I modify the interim order dated 10.11.1998 to the extent that proceeding with regard to the year 1995-96, 1996-97 and 1997-98 may continue, but no final order shall be passed. So for the period from 19.4.1998 onwards, the Corporation shall keep separate account, but will not be obliged to deposit. 3. Having regard to the urgency of the matter, parties are at liberty to move the Hon’ble the Chief Justice for fixing an early date of hearing. 4. With the aforesaid, the I.A. in question is disposed of.” 3. While assailing the validity of the impugned order, learned counsel for the petitioner, in his elaborate submissions, submits that respondent no.2 is not a recognized authority under the Duty Act and, therefore, has had no authority to pass the impugned order. He next submits that the Duty Act is a self-contained code and it was, therefore, wholly impermissible for respondent no.2 to resort to the Finance Act. He submits in the same vein that Annexure 26/1 has been passed in purported exercise of powers under section 19(1)(b) of the Finance Act which is borrowing the provisions of an enactment inapplicable in the present case and wholly impermissible in law. He next submits in the alternative that for the sake of argument without considering the position that even if it were permissible to borrow and apply the provisions of section 19 of the Finance Act to the proceedings under the Duty Act, ingredients of section 19(1)(b) are not satisfied and, therefore, could not have been applied to the facts and circumstances of the present case. He submits that respondent no.2 has at no stage found that the petitioner was guilty of omission in supply of the relevant particulars, or 4 suppression of material facts, which alone could have given the jurisdiction to revise the order marked Annexure 11. He relies on the judgment of the Supreme Court in 1971 ITR 831, at page 834 (Bankipur Club vs. Commissioner of Income Tax, Bihar & Orissa). He has also taken us through the statements in the counter affidavit made in rebuttal of the same. He also submits that Annexure 26/1 is a malafide action in law and is an ante-dated order. He has also analyzed the varies entries in the schedule in an effort to satisfy us that the order marked Annexure 11 is the only appropriate order, and the impugned order applies a higher slab in a most illegal and arbitrary manner. He submits in the same vein that the plant in question was under construction during the period in question and, therefore, the lower rates were applicable. He also relied on the provisions of section 3A of the Duty Act in an effort to establish that the surcharge leviable thereunder is consequential and is, in the circumstances of the case, unjustified. Learned counsel for the petitioner wraps up his submissions by stating that the power of review exercised to produce Annexure 26/1, and adjudicated the wide issues thereunder, is obviously beyond the narrow scope of review jurisdiction. 4. Learned counsel for the respondents has opposed the writ petition. He submits that Annexure 11 had also imposed duty on inter- State sales of power which has been declared to be beyond the purview of the Duty Act and, therefore, does not Pro Tanto contest the position. He relies on the Constitution Bench judgment of the Supreme Court State of Andhra Pradesh v. National Thermal Power Corporation [(2002) 5 SCC 203]. He raises a preliminary objection as to the maintainability of the present writ petition. In his submission, on the own showing of the petitioner, his statutory appeal is still pending, and the issues raised are basically of facts and should be contested there. He next submits that the petitioner never raised the question of jurisdiction and the authority of respondent no.2 to deal with the present subject matter before the 5 learned first authority. He submits that the question of jurisdiction is a mixed question of law and facts, and should be raised before the same authority in the first instance. He has taken us through the Duty Act and the Finance Act in an effort to establish that both the enactments, being State Legislations, are supplemental to each other. He further submits that Annexure 26/1 does not adjudicate any original issue, seeks to correct the errors apparent on the face of the record, and is within the sweep of review jurisdiction. He submits that the schedule appended to the Act, enforced with effect from 22.8.93, is alone applicable to the facts and circumstances of the present case. 5. We have perused the materials on record and considered the submissions of learned counsel for the parties. On a perusal of the scheme and the detailed provisions of the Duty Act, we are convinced that it is a self-contained code and it is therefore impermissible for the authorities thereunder to borrow any provision of the Finance Act. Law is settled by a long line of cases that an authority has to act within the four corners of the statute which has created him, and conferred the power to administer the provisions of the Act. 6. The preamble of the Act states that it is an Act for the levy of a duty on the sales and consumption of Electrical Energy in the State of Bihar. Section 2 spells out the definitions. Section 3 is the charging section, and is headed `Incidence of duty’. Sub-section (2) enumerates the items or the circumstances whereunder duty under section 3 shall not be leviable. Section 3A provides for levy of surcharge under the circumstances mentioned therein. Section 4 is headed `Payment of duty’, and provides for payment of the duty by the assessee. Section 5 provides for obligation to keep books of account and to submit returns. Section 5A provides for consequences in the event of default in payment of duty. Section 6 provides for Inspecting Officers who have power of inspection of books of account and also have to act as Assessing Officer. Section 7 provides for recovery of duty like land revenue. Section 7A provides for 6 special mode of recovery. Section 8 provides for punishment in case of failure to keep books of account or to submit returns. Section 8A is headed `Compounding of offences’. Section 9 provides for power of State Government to grant exemptions. Section 9A is headed `Appeal’, and provides for statutory remedies for redressal of grievances of both the sides. Before we proceed further, we must clarify that section 9A is headed `Appeal’, and is deceptive. It is not confined to appeal, but provides for appeal, revision, review etc. Section 9B prohibits jurisdiction of courts. Section 9C is headed `Bar of legal proceeding’, and extends protection to the authorities acting in discharge of their duties under the Act. Section 9D provides for reference to the High Court. Section 10 provides for the rule-making powers, and the Schedule providing for the rates is at the foot of the Act. 6.1) In exercise of the powers under section 10 of the Act, the Government has framed the Duty Rules which is equally exhaustive and provides detailed procedure for effective administration of the provisions of the Act. Luckily and happily, Section 14 is appropriately worded and is headed `Appeal, Revision, and Review’. 7. We entirely disagree with the submissions made by the learned Government Advocate that it is essential to supplant the Duty Act with the provisions of the Finance Act for effective administration of the former. In his submission, the Duty Act cannot be effectively administered without the aid of the Finance Act. There could not have been stronger circumstance to dispel the submission than the position that the Finance Act has since been repealed, and has been replaced, by the State Legislature by enactment of the Bihar Value Added Tax Act 2005. The Duty Act continues to be on the statute book and in force. We are, therefore, convinced that the Duty Act is a self-contained Act, and can operate on its own strength unaided by the provisions of the Finance Act. Once it is held that the Duty Act is a self-contained code, Annexure 26/1 having been passed under the provisions of section 19(1) of the Act 7 must be declared to be wholly illegal. This, however, does not conclude matters. 8. The respondents have taken the stand that Annexure 26/1, which seeks to modify Annexure 11, is under review jurisdiction. Section 9A of the Duty Act provides for the statutory remedies thereunder. Sub- section (4) provides for the forum of review. Section 9A is reproduced as a whole :- “9A. Appeal.- …………. …………… ……….. (4) Subject to such rules as may be prescribed, any order passed under this Act or the rules made thereunder may be reviewed by the authority passing it or by its successor-in-office.” This has to be read with rule 14 of the Duty Rules which is headed `Appeal, revision and review’, and the same is reproduced hereinbelow:- “14. Appeal, revision and review. – ………….. ……………… …………. (9) Where an authority reviews under sub-section (4) of section 9A, an order passed by it under the Act, or these rules, it shall record its reasons in writing for doing so. (10) Save with the previous sanction of the Commissioner recorded, in writing an order, other than order passed by the Commissioner, shall not be reviewed more than twelve months after the date of the passing of the order which is sought to be reviewed. (11) No authority below the rank of Commissioner, shall review an order which has been passed by its predecessors in office, except with the previous sanction of the Commissioner. Explanation.- For the purpose of this rule, the expression `Deputy Commissioner’ shall include `Additional Deputy Commissioner’.” It was, therefore, possible for respondent no.2 to review Annexure 11 by taking resort to the provisions of section 9A(4) of the Duty Act read with rule 14(9) of the Duty Rules. The question which yet survives for consideration is whether or not, in the facts and circumstances of the present case, Annexure 26/1 is within the sweep of the review jurisdiction. Law is well settled that an appeal or revision lies before a superior authority, and review lies before the same authority. Therefore, the Legislature as well as the courts have traditionally ascribed a very 8 narrow sweep to the review jurisdiction. If that were not so, the time- tested principle of appeal or revision before a higher authority would have been diluted, and the principle that nobody can sit in appeal over his own order can equally be given a go-by. On a perusal of Annexure 26/1, we are of the view that the errors sought to be corrected which allegedly appeared in Annexure 11, travelled beyond the narrow confines of review jurisdiction and impermissible in law, which renders Annexure 26/1 bad in law. 9. We are quite convinced that respondent no.2 passed the impugned order marked Annexure 26/1 in excess of his jurisdiction, but surely was a bona fide exercise of authority. The issues resolved by Annexure 26/1 are mixed questions of facts and law, application of the yardstick is always a crucial aspect of the matter, and has traditionally been the subject matter of keenly contested litigations. The same, therefore, could not have been resolved within the narrow confines of review jurisdiction. Furthermore, it is evident on a perusal of section 9A of the Duty Act read with rule 14 of the Duty Rules, that the State Government is not remediless if an order of the Inspecting Officer is not in accordance with law and against the Government. We are informed at the Bar that, in view of the interim orders passed by this Court, the assessments for the subsequent periods have not been taken up. It is, therefore, in the interest of justice of all concerned that Annexure 11 and Annexure 26/1 are set aside. 10. In the result, we allow this writ petition. The impugned order dated 12.2.98 (Annexure 11), and the order dated 23.3.98 (Annexure 26/1), and the consequential demand notice, are set aside. The matter goes back to the learned Inspecting Officer with a clear direction to him to act within the four corners of the Duty Act read with the Duty Rules. The concerned Inspecting Officer shall apply his mind afresh to the returns submitted by the petitioner, with further opportunity to file supplementary returns if permissible in law, and dispose of the matter 9 after affording reasonable opportunity of hearing to both the sides and in accordance with law. He shall arrive at a clear finding as to applicability of the relevant clause of the schedule. In the facts and circumstance of the case, there shall be no order as to costs. ( S K Katriar, J. ) Samarendra Pratap Singh, J. I agree. (Samarendra Pratap Singh,J.) Patna High Court, Patna The 14th of December 2010 AFR/ mrl