IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No.62/2007 Reserved on.20.3.2008 Decided on.5.4.2008 National Hydro Electric Power Corporation & another. …Petitioners. Versus State of Himachal Pradesh and others. …Respondents Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1.yes For the petitioners : Mr. K.D. Shreedhar, Advocate. For the respondents Mr. Vivek Thakur, Additional Advocate General for respondents No. 1,2,4 and 5. Mr. Baldev Singh, Advocate for respondent No.3. Rajiv Sharma, J. The brief facts necessary for the adjudication of this petition are that the petitioner-corporation had approached this Court by way of CWPs No. 562/1989, 375/1991 and 1410/1993. These three writ petitions were disposed of on 5.10.1994. The judgment dated 5.10.1994 passed in these writ petitions reads thus: “After hearing arguments of the learned counsel for the parties for some time, it was stated before us by Mr. Shiv Pujan Singh, learned counsel for respondents 1 and 2, on instructions from Chief 1 Whether the reporters of Local Papers may be allowed to see the judgment? yes 2 Electrical Inspector, respondent No.2, that the petitioners will not be charged electricity duty on electricity consumed by them for generating stations, sub-stations and works directly connected with the generation, transmission and distribution of energy, under the Himachal Pradesh Electricity (Duty) Act, 1975 as amended upto date. The learned counsel submits that this concession will not cover electricity consumption by the petitioners in their offices, colonies and other works, not directly connected with generation, transmission or distribution of electricity. The aforesaid statement fully satisfies the petitioners. It is, however, submitted that this may be made a rule of this court. There is no reason why the statement, as aforesaid, should not be accepted as authentic and made a rule of this court. Under the circumstances, accepting the aforesaid statement, it is directed that the petitioners will not be charged electricity duty on the energy consumed by them for generation stations, sub-stations and works directly connected with the generation, transmission and distribution of energy. The demands issued against the petitioners will accordingly be corrected. The petition accordingly stands disposed of. No costs.” Immediately after the judgment dated 5.10.1994, respondent No.4 sent a communication dated 27.10.1994 to the Superintending Engineer (OP) Circle HPSEB, Dalhousie observing therein that the petitioner-corporation was liable to pay electricity duty for electricity consumed by Chamera and Barasuil projects in their offices, colonies and other works which were not directly connected with the 3 generation, transmission and distribution of electricity. The Superintending Engineer (OP) Circle, HPSEB, Dalhousie was requested that the electricity duty be worked out since 1989 to date and be got deposited in the Government Treasury. The copy of the same was also addressed to the Assistant Electrical Inspector, Regional Office, Dalhousie. The relevant extract of the text sent to Assistant Electrical Inspector reads thus: “As per the judgment of the court, Electricity Duty is not chargeable from the NHPC for generating stations, sub stations and work directly connected with the generation, transmission and distribution of energy. NHPC is however liable to pay electricity duty on the energy consumed in their offices, colonies and other works not directly connected with the generation, transmission or distribution of electricity. He is therefore advised to obtain the detail of Electricity Duty recoverable from Chamera and Biarasuil Projects since 1989 to date and intimate to this office so that the steps to release the government revenue are taken at the appropriate level.” The Chief Electrical Inspector i.e. respondent No.4 also sent a letter to the Superintending Engineer on 23.11.1994 requesting him to make efforts to recover the electricity duty on the basis of the year 1989. The Assistant Electrical Inspector informed the Manager Electrical (Dam), Chhana More on 12.12.1994 to deposit a sum of Rs. 59,05,188/- and another sum of Rs. 9,68,182/- towards the electricity duty. The Chief Engineer Incharge of the petitioner-corporation informed the Chief Electrical Inspector on 27.3.1995 that the project 4 had already paid electricity duty amounting to Rs. 54,81,958.20 paisa whereas duty payable as per the directions of the High Court worked out was Rs. 22,84,361.30, therefore, the project had paid in excess and thus a refund of Rs. 31,97,596.90 paisa was claimed. The Chief Electrical Inspector sent a letter to the Chief Engineer Incharge Chamera Hydro Electric Project on 15.5.1995 informing him that the demand for refund of Rs. 31,97,596.90 paisa was illogical. The Sub Divisional Officer, Electrical Sub Division, HPSEB, Dalhousie has called upon the Chief Engineer (E) of the petitioner-corporation to deposit a sum of Rs. 64,11,402.40 paisa vide letter dated 31.10.1996. The Chief Electrical Inspector i.e. respondent No.4 called upon the General Manager of the petitioner-corporation to deposit a sum of Rs. 64,11,402.40 paisa on 22.12.1998. The Chief Engineer (E&M) of the petitioner-corporation informed the Chief Electrical Inspector on 27.1.1999 that no electricity duty was payable and to the contrary the petitioner-corporation was entitled to refund of Rs. 31,97,596.90 paisa. The Chief Electrical Inspector sent a communication to the Manager (Electrical) of the petitioner-corporation on 6.12.2001 to deposit a sum of Rs. 64,11,402.40 paisa towards electricity duty. The Under Secretary (Power) to the Government of Himachal Pradesh also sent a letter dated 27.12.2001 to the Manager (Electrical) to deposit a sum of Rs. 64,11,402.40 paisa. The Chief Electrical Inspector on 5.2.2002 again requested the petitioner-corporation to deposit a sum of Rs. 64,11,402.40 paisa. The Chief Electrical Inspector sent a letter to the Secretary (MPP& Power) to the Government of Himachal Pradesh on 22.1.2003 impressing upon the 5 State to ensure that the petitioner-corporation deposits the outstanding amount of electricity duty with the HPSEB. The Chief Electrical Inspector vide communication dated 16.3.2004 again impressed upon the petitioner-corporation to deposit the amount. The same request was reiterated on 4.3.2006 by the Chief Electrical Inspector. The HPSEB also sent a communication to the Land Acquisition Collector, Chamba, District Chamba on 12.7.2006 to effect recovery of Rs. 64,11,402.40 paisa by way of arrears of land revenue from the petitioner-corporation. The Deputy Commissioner returned the case to the Superintending Engineer (OP) Circle on 14.9.2006. Mr. K.D. Shreedhar, Advocate had strenuously argued that as per the judgment of this Court rendered in CWPs No. 562/1989, 375/1991 and 1410/1993 dated 5.10.1994 his clients are not liable to pay any amount as demanded by the respondents. He also contended that his clients are entitled to a refund of Rs. 31,97,596.90 paisa. He further contended that the Chief Electrical Inspector is one of the statutory authorities who is to decide the matter as per Rule 11 of the Himachal Pradesh Electricity (Duty) Rules, 1975, but in the present case the Chief Electrical Inspector has become party a seeking refund of the electricity duty on behalf of the State through HPSEB. Lastly Mr. K.D. Shreedhar had submitted the Secretary (MPP & Power) could not enter into correspondence with the petitioner-corporation since he had to hear the appeal under rule 11 of the Rules. 6 Mr. Vivek Thakur, learned Additional Advocate General appearing on behalf of respondents No.1,2,4 and 5 had strenuously argued that the petitioner-corporation had misconstrued the judgment rendered by this Court on 5.10.1994 and the petitioners are liable to pay a sum of Rs.64,11,402.40 paisa. Mr. Baldev Singh, Advocate appearing on behalf of respondent No.3 had adopted the arguments of the learned Additional Advocate General. I have heard the learned counsel for the parties and have also perused the record carefully. It will be pertinent at this stage to take into consideration few important sections of the Himachal Pradesh Electricity (Duty) Act, 1975 (hereinafter referred to as the Act for brevity sake). Section 2 of the Act is a dictionary clause which defines expression “Board”, “consumer”, “energy”, “prescribed”, “unit” and “competent authority”. Section 3 of the Act is a charging section which reads thus: ”3. Levy of electricity duty on consumption of energy.- (1) there shall be levied and paid to the State Government on the energy consumed a duty to be called the “Electricity Duty” in the prescribed manner and computed at the following rates:- (i) in case of domestic consumers at the rate of 5 paise per unit; and (ii) in case of other category of consumers at the rate of 10 paise per unit: Provided that if the energy is partly used for category (i) and partly for category (ii), above, the highest rate of duty applicable will be levied. (2) Nothing in sub-section (1) shall apply to the consumption or sale of energy which is,- (i) consumed by the State Government; or 7 (ii) consumed by or sold to the Government of India for consumption by the Government; or (iii) consumed or sold for the construction, maintenance or operation of any railway by the Government of India or a railway company operating that railway; or (iv) consumed by the Board for generating stations, sub-stations, works directly connected with the generation, transmission and distribution of energy. (3) For the purpose of computing the electricity duty under this section, the consumption shown by the meters starting after the first meter reading date after the commencement of this Act shall be taken into account.” Section 4 of the Act provides that the electricity duty shall be collected and paid to the State Government by the Board or a person who generates energy for his own consumption (or person who supplies energy to a consumer), as the case may be. Section 7 of the Act provides for imposition of penal duty. The mechanism for recovery of duty is prescribed under section 8 of the Act. Section 9 of the Act empowers the Board to disconnect supply for non-payment of electricity duty. Section 12 of the Act empowers the State Government to frame rules. The State Government had framed the rules called “Himachal Pradesh Electricity (Duty) Rules, 1975 (hereinafter called as the Rules for brevity sake). Rule 5 of the Rules being relevant to decide the present lis is reproduced below, which reads thus: “Collection and payment of duty.- (1) They duty leviable under sub-section (1) of section 3 of the Act on the energy supplied by the Board to a consumer 8 shall be collected by the Board along with the monthly bills for the energy supplied and shall be deposited in Government Treasury, sub-Treasury or a scheduled Bank of India, half yearly i.e. in April and October every year. (2) The Board shall- (a) deposit such duty in the Government Treasury under the Head 043-Taxes on duty on Electricity Taxes on consumption and sale of Electricity. (b) send the duplicate copy of the Treasury challan to the Electrical inspector to Government of Himachal Pradesh: Provided that if duty has been paid by a consumer in respect of consumption of energy in excess of what is payable under the Act the Board shall authorize the refund of the excess duty to be paid to the consumers concerned by adjustment in subsequent bill or bills or by payment in cash where the consumer ceases to take supplies: Provided that in case the Board is unable to include the amount of duty in the bill immediately following the enforcement of the Act, for want of time, he may do so in the next bill.” Rule 11 of the Rules provides the mechanism for resolving disputes between the Board and the consumer. Rule 11 reads thus: “11. Disputes between the Board and the consumer – In the case of a dispute between the Board and a consumer regarding the liability of the consumer for the payment of the duty or exemption therefrom, the Electrical Inspector shall decide the matter. An appeal against the order of the Electrical Inspector shall lie within three months from the date of the 9 order to Secretary, Multipurpose Projects and Power to the State Government.” It is in this backdrop that the present lis is to be adjudicated upon. The three CWPs No. 562/1989, 375/1991 and 1410/1993 were decided by this Court on 5.10.1994. The judgment rendered in CWP No. 562/1989 has already been reproduced hereinabove. The Chief Electrical Inspector sent a communication to the Superintending Engineer (OP) Circle, HPSEB, Dalhousie requesting him to realize the electricity duty from the petitioner-corporation. The Assistant Electrical Inspector sent a communication to the Manager of the petitioner-corporation on 12.12.1994 for depositing the electricity duty. The petitioner-corporation in sequel to the letters received from the Chief Electrical Inspector claimed refund of Rs. 31,97,596.90 paisa instead of depositing the amount as directed. The Chief Electrical Inspector sent a communication to the petitioner-corporation on 15.5.1995 stating therein that the claim for the refund of Rs. 31,97,596.90 paisa was not tenable. It was for the first time on 31.10.1996 that the Sub Divisional Officer, Electrical Sub Division, HPSEB, Dalhousie directed the Chief Engineer (E), Chamera Hydro Electric Project to deposit the outstanding amount of Rs. 64,11,402.40 paisa. The Chief Electrical Inspector again entered into correspondence with the petitioner-corporation on 22.12.1998 and 6.12.2001. The FC-cum-Secretary (Power) to the Government of Himachal Pradesh also sent a communication to the Manager (Electrical) of the petitioner-corporation on 27th December, 2001 to deposit the outstanding amount. The Chief Electrical Inspector again 10 sent a communication to the Manager (Electrical) on 5.2.2002 to deposit the outstanding amount. The Chief Electrical Inspector sent a letter to the Secretary (MPP & Power) on 22.1.2003 impressing upon the State Government to recover the outstanding amount of Rs. 64,11,402.40 paisa. Respondent No.4 again sent a communication to the functionaries of the petitioner-corporation on 16.3.2004 and 4.3.2006 with regard to non-payment of electricity duty. The HPSEB i.e. respondent No.3 also sent a letter to the Deputy Commissioner, Chamba to ensure the recovery of the outstanding amount on 12.7.2006. The case was returned by the Deputy Commissioner to the HPSEB on 14.9.2006. What emerges from the narration of above enumerated facts is that the Chief Electrical Inspector had entered into prolonged correspondence with the functionaries of the petitioner-corporation for the deposit of the outstanding amount of electricity duty. The Chief Electrical Inspector has also written a letter to the State Government to ensure the recovery of the outstanding amount. The case of the petitioner-corporation was that in view of the judgment rendered by this Court on 5.10.1994, a sum of Rs. 31.97,596.90 paisa was paid in excess and the same was required to be refunded to the petitioner- corporation. It is evident from the language employed in section 4 of the Act that the electricity duty is to be collected and paid to the State Government by the Board or a person who generates energy for his own consumption (or person who supplies energy to a consumer) as the case may be. Section 8 of the Act provides that any duty under the Act or penalty imposed under section 7 which remains unpaid, 11 whether by a consumer to the Board or by the Board or a person generating energy for his own consumption to the State Government is recoverable as an arrear of land revenue or by deduction from amounts payable by the State Government to the Board or such person. Under section 9, the Board has the power to disconnect supply for non-payment of duty. Rule 5 of the Rules provides that the duty leviable under sub-section (1) of section 3 of the Act on the energy supplied by the Board to a consumer shall be collected by the Board along with the monthly bills for the energy supplied and shall be deposited in Government Treasury or a scheduled bank of India half yearly i.e. April and October every year. It is evident that there is a dispute between the petitioner- corporation and the State Government regarding the payment of electricity duty. The duty is to be collected by the Board. It was the Board, who has to realize the duty instead of office of the Chief Electrical Inspector. It is clear that the Chief Electrical Inspector had been directing the petitioner-corporation to deposit a sum of Rs. 64,11,402.40 paisa. The Chief Electrical Inspector could not direct the petitioner-corporation to deposit the amount in view of provisions of rule 11 of the Rules. It is stipulated in rule 11 as quoted above that in case of a dispute between the Board and a consumer regarding the liability of the consumer for the payment of the duty or exemption therefrom, the Electrical inspector shall decide the matter. In the present case, the Chief Electrical Inspector himself has become a party for realization of the electricity duty from the petitioner corporation. The Chief Electrical Inspector has to decide the dispute 12 between the Board and the consumer. In the present case, the petitioner-corporation is the consumer and Board had to collect the duty and if the Board was aggrieved by the non-payment of the outstanding electricity duty, the matter was required to be referred to the Chief Electrical Inspector for decision as per rule 11. The Board has not approached the Chief Electrical Inspector. The Chief Engineer (OP) also wrote a letter to the State Government as is evident from the correspondence as discussed hereinabove to impress upon the petitioner-corporation to deposit the amount. The Secretary (MPP & Power) has also directed the petitioner-corporation to deposit the amount. The Secretary (MPP & Power) could not do so since he has to hear the matter in appeal under rule 11. There is a provision for preferring an appeal against the order of the Electrical inspector within a period of 3 months from the date of the order passed by the Chief Electrical Inspector. The Board, if was aggrieved, by the non-payment of the electricity duty, should have approached the Chief Electrical Inspector under rule 11. The Chief Electrical Inspector was required to decide the matter under the provisions of rule. The Board i.e. respondent No.3 has not acted in accordance with law. The Chief Electrical Inspector i.e. respondent No.4 has abdicated his statutory duties by becoming a party to the lis by entering into direct correspondence with the petitioner-corporation as well as the State Government. The Secretary (MPP & Power) could not directly enter into correspondence with the petitioner-corporation since he has to decide 13 the appeal under rule 11 after the decision of the Chief Electrical Inspector. In view of the observations made hereinabove the Court is of the opinion that since there exists a dispute between the parties, the same is required to be adjudicated upon by the Chief Electrical Inspector. Consequently, the writ petition is disposed of by issuing the following mandatory directions: i) the parties are directed to approach the Chief Electrical Inspector within a period of 6 weeks from today to get the matter adjudicated upon. ii) the Chief Electrical Inspector wholly uninfluenced by the observations made hereinabove will decide the matter within a period of 3 months after the receipt of the petition. There shall be no order as to costs. ( Rajiv Sharma), Judge April 5, 2008 *Awasthi*