B.P.DAS, J & R.N.BISWAL, J. W.P.(C) NOS.5413 OF 2005, 13287/2004, 4202/2004, & O.J.C. Nos.966 of 2001 & 2682 of 2002.( Decided on 06.05.2010) M/S. INDIAN METALS & FERRO ……………….. Petitioner ALLOYS LTD. & ANR. .Vrs. STATE OF ORISSA & ANR . ……………..Opp.Parties ((With batch of Cases). CONSTITUTION OF INDIA, 1950 – ART.226. For Petitioners – M/s. S.S.Das, Miss A.Dutta, B.R.Das, S.Modi, K.Behera & D.Tripathy. For Opp.Parties – M/s. N.C.Panigrahi, S.R.Panigrahi, N.K.Tripathy & G.S.Dash. For Petitioners – M/s. Manoj Mishra, P.K.Das & d.Mishra. For Opp.Parties – M/s,.N.C.Panigrahi,S.R.Panigrahi, N.K.Tripathy & G.S.Dash. For Petitioners M/S- Jayanta Das ,A.N Das,A.N.Pattnaik, N.Sarkar ,E.A .Das,B.P Sahu ForOpp.Parties –M/S. N.C.Panigrahi,S.R.Panigrahi,N.K.Tripathi,G.S.Dash For Petitioners – B.K.Sharma,B.K.Dash,A.K.Mohanty,S.R.Mohanty ,S.K.Jee,K.A.Guru &R.K.Rath. ForOpp.Parties– M/S.N.C.Panigrahi, S.R.Panigrahi,N.K.Tripathi,G.S.Dash R.N.BISWALl,J. The facts and law involved in all the writ petitions being the same, albeit IMFA and NALCO raised some extra points of facts and laws, they are heard analogously and the following common judgment is passed thereon. 2. In all the writ petitions, the petitioners, all of whom generate energy for their own consumption, challenge the vires of the Orissa Electricity Duty Act, 1961 (hereinafter referred to as ‘the Act’) in so far as Sections 2, 3 and 5 thereof are concerned. They also challenge the notification No.7721-P-II-Ed.15/92 E wherein Electricity Duty was fixed @ 12 paise for a person not being licencee or board who generate such energy for his own use or consumption. They further challenged the Notification No.GRIDCO-ED- 3/2001-18237, dated 10.10.2001 issued by State Government in their Department of Energy, wherein electricity duty was increased from 0.12 paise to 0.20 paise per unit. According to the petitioners, the impugned impost is expressly on generation/production of electricity, which is beyond the scope and ambit of Entry 53, List-II of Schedule VII of the Constitution of India. In fact, it falls within the legislative field under Entry 84, List-I, Schedule-VII of the Constitution of India. The impost being beyond the legislative competence of the State Legislature, it is ab-initio void and non- est. The petitioners, who do not consume electricity pursuant to any supply, are not liable to pay the duty imposed. Furthermore, the petitioners being not consumers, as defined in Section 2 (c) of the Act, they are not liable to pay the same. If Section 3 (1) of the Act is allowed to sustain, it would amount to be an uncanalized, unguided and uncontrolled delegation of power on the Executive. The petitioners further question the validity of categorization of the consumers. The impugned enhancement is discriminatory, as it singles out the petitioners, who generate electrical energy from their captive power plants for their own consumption. In terms of Section 3 (ii) of the Act 1961, the impugned notification having not been laid before the State Legislature, it is wholly invalid in the eye of law. So, the petitioners pray to declare Sections 2, 3 and 5 of the Act ultra vires; to quash the notifications dated 25.4.1992 and 10.10.2001 prescribing payment of electricity duty to be paid by them and the demand notice for deposit of Electricity Duty @ 0.20 paise and to direct the opp. parties to refund the excess amount of Electricity Duty paid and for consequential relief. It is the further prayer of ICCL to set aside the order dated 14.5.2004 rejecting their claim as licensee. Similarly NALCO has further prayed to strike out the words “so however, that such notifications shall be without prejudice to the validity of any electricity duty levied or collected under the notifications,” from Section 3(ii)of the Act. 3. Opp. parties 1 and 2 in their joint counter affidavit contended that the impugned impost being on consumption of electrical energy, it is covered under Entry 53, List-II of Schedule VII of the Constitution as such the State Legislature is competent to legislate thereon. The Notification dated 25.4.1992 and 10.l0.2001 prescribing payment of Electricity Duty by the petitioners is most rational and reasonable. Similarly, situated units have been paying the enhanced electricity duty without any grumble. The petitioners were paying Electricity Duty @ 0.12 paise per unit with effect from 25.4.1992. After long 10 years, it was enhanced to 0.20 paise. In the meantime, tax rate in the other Government Sectors has been increased manifold. In a welfare State, the revision in the rate of tax is inevitable to meet the increasing burden on the State Exchequer. In Central Government Undertakings like RSP, NTPC and State Government undertakings like OHPC and OPGC are paying Electricity Duty @ 0.20 paise per unit. It is the further case of the opp. parties that as per Section 3 (1) (d) of 1961 Act, Electricity Duty is being levied at different rates on different types of consumers. Accordingly, the electricity duty @ 20 paise per unit cannot be said as arbitrary and unjustified. The classification being reasonable, there is no violation of any constitutional provision. The notification was laid before the State Legislature in the session held on 10.12.2004. Accordingly, the opp.parties prays to dismiss the writ petitions. 4. In view of the nature of dispute, it would be prudent to give the historical background of Legislation on Electricity Duty in the State of Orissa. Duty on consumption of electrical energy was first introduced by the Orissa Electricity (Duty) Act, 1961, which came into force on 14.10.1961. Under Section 3 thereof, the duty was payable on rate charged at different percentage basis. In Orissa Electricity (Duty) Amendment Act, 1986, section 3 of the Principal Act was amended and electricity duty was fixed in the schedule of the Act prescribing different rates for different categories of consumers. The next amendment was introduced in the year, 1992, in which, Section 3 of the Act was fully substituted and legislature delegated powers to the State Government to levy duty on different types of consumers. On the basis of the said amended provision, the notification dated 10.10.2001 was issued, wherein the petitioners were to pay 20 paise per unit instead of 12 paise, which they were paying earlier. 5. At the outset, it was argued by learned counsel for the petitioners that the impugned impost is expressly on generation of electricity, which is beyond the scope and ambit of Entry-53, List-11 of Schedule-VII to the Constitution of India. In fact, it falls under Entry 84, List-1 of Schedule-VII of the Constitution and as per Article 246 (1) thereof, Parliament has exclusive power to legislate thereon. Entry 84 of List 1 of Schedule VII enumerates duties of excise on tobacco and the other goods manufactured or produced in India except alcoholic liquors for human consumption, opium, Indian hemp and other narcotic drugs and narcotics. Since the petitioners-company generate/manufacture electrical energy from their captive power plants and electrical energy comes under the category of goods, duty can be imposed in respect of generation of electrical energy by the Parliament and not the State Legislature. As such, the impugned impost is ab-initio, void and non-est in the eye of law. On the other hand, Mr. N.C. Panigrahi, learned senior counsel appearing for opp. parties contended that as per Article 246 (3) of the Constitution, State Legislature can impose tax on the consumption of electricity, under Entry 53, Schedule VII of the State list. He further contended that Orissa Electricity Act was passed in the year, 1961. There was no challenge to it till these cases were filed in the year, 2004. So, at such a belated stage, it cannot be challenged. 6. Taxes on consumption or sale of electricity with reference to Entry 53 of Schedule VII, List II should be read as ‘taxes on consumption or sale for consumption of electricity within the State. Sale of electricity for consumption outside State is subject to provision of Entry 92-A of the List. Since tax is imposed under the impugned Act on consumption of electricity in side the State, State Legislature is competent to pass such an Act. It cannot be held the impugned Act imposes duty on generation or production of electricity as submitted by learned counsel for the petitioners. In the decision Jiyajeerao Cotton Mills Ltd., Birlanagar, Gwalior vs. State of Madhya Pradesh, AIR 1963 SC 414 (V- 50 C-54), the appellant, a Textile Mill owner was generating electricity for running his mills. Under the provisions of the Central Provinces and Berar Electricity Duty Act, 1949 as amended by the Madhya Pradesh Taxation Laws amended Act, 1956 the Government of Madhya Pradesh levied upon the appellant electricity duty on consumption. One of the grounds taken by him before the apex court 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 even 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 apex court turned down the argument, holding as follows:- “(6) It is difficult to see 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 its consumption. If a 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 the duty prescribed by the Act”. [ Similarly, in the case of M/s. Orient paper and Industries Ltd. vs. Orissa Electricity Board and others 67 (1989) CLT 693, it was held that the State legislature can impose duty on consumption of electricity under Entry 53 list-II of the VII schedule of the constitution of India. So, it is cleared that electricity duty can be imposed on consumption of electrical energy by the State legislature under Entry 53 list-II of the VII schedule of the constitution of India. 7. Next, it was submitted by learned counsel for the petitioners that Section 3 of the Act empowers the State Government to impose electricity duty at such rate not exceeding 25 paise per unit by issuing notification from time to time. By invoking power under sub-section (2) of Section 12 of the Act, the State Government has framed Orissa Electricity Duty Rules, 1961, but there is no guideline for imposing duty while giving effect to Section 3 of the Act. There is also no administrative instruction to that effect. So, according to learned counsel for the petitioners, in absence of any Rules or guidelines, the matter is left to the total discretion of the Energy Secretary, who can pick and choose the category of consumers and decide the rate of duty by notification, particularly when there is no provision for appeal or revision in the Act, against such notification. There being excessive delegation of power, the notification can be arbitrary, unreasonable and discriminatory of which the impugned notifications are examples. On the other hand, Mr. Panigrahi, learned Senior counsel appearing for the opp. parties contended that guidelines have been provided under Section 3 itself by fixing the maximum duty @ 25 paise per unit and by providing that the notification should be laid before the State Legislature as soon as the same is issued for a total period of fourteen days and if during the said period, the State Legislature makes modification therein, the notification shall thereafter have effect only in such modified form. 8. In the case of Pandit Banarsi Das Bhanot v. State of Madhya Pradesh AIR 1958 SC 909, it has been held that the authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as, selection of persons on whom the tax is to be paid, the rate at which it is to be charged in respect of different classes of goods and the like. In the case of N.K. Papiah and Sons v. Excise, Commissioner and another AIR 1975 SC 1007, it has been held that the laying of rules before the legislature is controlling power on the delegated legislation. The legislature may also retain its control over its delegate by exercising its power of repeal of the Act. So, it can not be said that there was no guidelines. 9. Learned counsel appearing for the petitioners, next submitted that as per Section 3 (ii) of the Act, all notifications issued by the State Government from time to time under sub-section (1) should be laid before the State Legislature as soon as may be for a period of 14 days, which may be comprised in one or more sessions. The notification dated 10.10.2001 even though was issued on 10.10.2001 itself, it was laid before the State Legislature in the year, 2004. In the case of General Insurance Council and others vs. State of Andhra Pradesh and others, AIR 2007 (SC) 2696, so also in the case of Ibrahim Ahmad Batti vs. State of Gujarat and others, AIR 1982 (SC) 1500, it was held by the Apex Court that “as soon as ” means, do it within a shortest possible time. According to learned counsel for the petitioners, it is the established principle of law that if a statute requires a thing to be done in a particular manner, it must be done in that manner. The statute in the present case requires that the notification should be placed before the Assembly as soon as it is issued. The executive authority, which is a creature under the statute, cannot stall the statutory provision and obstruct the process of the statute. In this context, Mr. Panigrahi learned senior counsel contended that the notification was laid before the State legislature in the sessions held on 10.12.2004. As required under laws, since it could not be laid before the Assembly for 14 days, it was again re-laid on 7.3.2005. The aforesaid fact of laying before the Legislative Assembly sufficiently established that the rates of duty as amended vide notification No.18237 dated 10.10.2001 was accepted and approved by the State Legislature. Moreover, laying the notification before the Assembly is directory and not mandatory. Violation of the said principle does not invalidate the notification. In support of his submissions, Mr. Panigrahi relied on the decisions Atlas Cycle Industry Limited v. State of Haryana, AIR 1979 (SC), 1149, M/s. Indian Aluminum Co. Ltd. v. State, AIR 1992, Orissa, page 100, and Orissa Consumers Association v. OERC 2004 (ii) OLR 673. 10. In M/s. Atlas Cycle Industries Limited (supra), pursuant to Section 3 of Essential Commodities Act, Iron and Steel Control Order fixing maximum ceiling price on various categories of irons and steel was passed by the Central Government. Sub Section (6) of Section 3 of the Essential Commodities Act reads as follows:- “Every order made under this section by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament, as soon as may be, after it is made”. The point for consideration before the Supreme Court in the said case was whether laying down of the order of the Central Government, fixing maximum ceiling price on various categories of iron and steel including black plain iron sheets, before both Houses of Parliament was mandatory or merely directory. The Apex Court in Para 22 of their Judgment held as follows: “In the instant case, it would be noticed that sub-section (6) of Section 3 of the Act merely provides that every order made under Section 3 by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament, as soon as may be, after it is made. It does not provide that it shall be subject to the negativeor the affirmative resolution by either House of Parliament. It also does not provide that it shall be open to the Parliament to approve or disapprove the order made under Section 3 of the Act. It does not even say that it shall be subject to any modification which either House of Parliament may in its wisdom think it necessary to provide. It does not even specify the period for which the order is to be laid before both Houses of Parliament nor does it provide any penalty for non-observance of or non-compliance with the direction as to the laying of the order before both Houses of Parliament. It would also be noticed that the requirement as to the laying of the order before both Houses of Parliament is not a condition precedent but subsequent to the making of the order. In other words, there is no prohibition to the making of the orders without the approval of both Houses of Parliament. In these circumstances, we are clearly of the view that the requirement as to laying contained in sub-section (6) of Section 3 of the Act falls within the first category i.e. “simple laying” and is directory not mandatory.” Section 3 (ii) of Orissa Electricity (Duty) Act, reads as follows:- “All notifications that may be issued by the State Government from time to time under sub-section (1) shall, as soon as may be after they are issued, be laid before the State Legislature for a total period of fourteen days which may be comprised in one or more sessions and if during the said period the State Legislature makes modification if any, therein, the notifications shall thereafter have effect only in such modified form, so however, that such modifications shall be without prejudice to the validity of any electricity duty levied or collected under the notifications.” In this provision, the period of laying down before the Legislature has been specified. The Legislature can also modify the said order. If it is so modified, then the notification shall have effect only in such modified form. But no penalty has been prescribed for not laying down the notification before the State Legislature. A similar provision is there under Section 44 of the Orissa Survey and Settlement Act which reads as follows: “44.Rules to be laid before Assembly-All rules made under Section 43 shall, as soon as may be after they are made, be laid before the State Legislature for a total period of fourteen days which may be comprised in one or more sessions, and if during the said period the State Legislature makes any modifications therein, the rules shall thereafter have effect only in such modified form, so, however, that such modification shall be without prejudice to the validity of anything previously done under the rules. Here, the period of laying the order before the State Legislature is fixed and the legislature has also been vested with power to modify the Rules. In context of this provision, this Court held in the case of M/s. Indian Alluminium Company Ltd (Supra), as follows: “The Orissa Legislature never intended that the noncompliance of the requirement of laying the Rules as envisages in Section 44 of the Survey and Settlement Act would render the Rules invalid. In this view of the matter even after the Rules framed had not been laid before the Assembly the same remained valid and therefore the authorities had jurisdiction to fix a fair and equitable rent in respect of nonagricultural land under the Rules in question.” Similarly, in the case of Orissa Consumers Association (supra) this court held that: “Where a statute directs that the rules shall be laid before the legislature whether direction is mandatory or directory depends upon several consideration notwithstanding the use of expression ”shall” and the requirement can be held to be directory, where no penalty is attached under the statute for non-laying of the Rules before the Legislature.” In the case at hand, no penalty has been attached to the relevant provision for non- laying of the notification before the State Legislature. There is also no provision to show that non-laying of the notification before the State Legislature would render the notification invalid. But, as we have stated earlier the impugned notification was laid before the State Legislature, albeit at a belated stage, so the notification dated 25.4.1992 and 10.10.2001 prescribing payment of electricity duty to be paid by the petitioners cannot be quashed. 11. Next, it was submitted by learned counsel for the petitioners that vide impugned notification dated 10.10.2001 the rate of electricity duty has been enhanced from 0.12 paise per unit to 0.20 paise, only in respect of the companies, those who generate energy for their own consumption. Charging higher rate of electricity duty upon the industries having captive source is discriminatory and violative of Article 14 of the constitution of India. The petitioners’ companies are all power intensive industries. As per the schedule appended to Orissa Electricity Duty Act, 1986 electricity was levied @ 0.18 paise on the power intensive industries and @ 0.12 paise on any person not being a licensee or Board, who generates such energy for his own use or consumption. The notification dated 25.4.1992 prescribed levy of duty @ 0.15 paise on power intensive industries. So, the intensive units gained @ 0.03 paise per unit. At the same time the captive generators were levied with same duty @ 0.12 paise. The notification dated 25.4.1992 has now been amended by notification dated 10.10.2001 whereby rate of duty payable by a person not being licensee or the Board who generates energy for his own use or consumption has been increased from 0.12 paise per unit to 0.20 paise –an increase by 67%. Under the circumstances, the duty now being levied on the consumers with their own captive source of energy is higher than the duty levied on the power intensive units who purchase electricity from the distribution companies. So, it was argued that the classification of power intensive industries having their own captive source of power and the power intensive industries who purchase energy from out source is arbitrary, unreasonable and discriminatory, as it bears no reasonable nexus with the object of the legislation. The petitioners’ industries, which are power intensive units cannot be discriminated only because they consume electricity from their own source. According to learned counsel for the petitioners, the impugned notification being violative of Article 14 of the constitution of India is liable to be struck out. In support of such submission, learned counsel for petitioners relied on the decision Indian Express News papers (Bombay) Pvt Ltd and others etc. etc. Vrs. Union of India and others, A I R 1986 S.C.515, The State of Kerala vs.Haji K.Haji K.Kutty Naha and others etc, AIR 1969 S.C. 378 (Vol-56 c-74), Ayurveda Pharmacy and another Vs. Tamilnadu AIR 1989 S.C.1230, Delhi Cloths and Gen. Mills Company Ltd. Vs. M.C.D and ORS 49 (1993) Delhi Law Times 83 and the decision in Associated Cement Company Ltd. vs. State of Chhattisgarh decided on 15.12.2006 by Chhattisgarh High Court, Mr. Panigrahi, learned senior counsel appearing for opp. parties contended that the classification was reasonable and as such there was no question of violation of Article 14 of the Constitution. 12. In the decision Indian Express News papers (Bombay) Private Ltd. and others (supra), the apex court held that classification of the newspapers small, medium and big for levying custom duty is not violative of Article 14 of the Constitution. So, this decision is not helpful to the petitioners. In the case of State of Kerala (supra), Kerala Buildings Tax Act (Act 19 of 1996) was challenged on the ground that it infringed Articles 13, 14 and 265 of the Constitution since Section 4 of the said Act, which was the charging section read