Case: State Of Kerala Vs. Indian Aluminium Co.Ltd.&amp; Anr

State Government to reduce the rate at which the duty is leviable on such consumer or to exempt such consumer from payment of duty subject to the terms and condition imposed by the Government. Section 4 of the Act is quoted below :- "4. Levy of Electricity Duty on consumers. - Every consumer belonging to any of the classes specified in column (2) of the Schedule shall pay every month to the Government in the prescribed manner a duty calculated at the rate specified against that class in column (3) thereof : Provided that in cases where the supply of energy to a consumer is regulated by an agreement entered into between the Government or the licensee and the consumer it shall be competent for the Government either to reduce the rate at which duty is leviable on such consumer or to exempt such consumer from payment of duty under this section subject to such terms and conditions as may be imposed by the Government." It is not disputed that State of Kerala has granted partial exemption in the matter of payment of duty to the company. It is not the case of State of Kerala that the exemption so granted has been annulled or abrogated or rescinded by any fresh Order. Therefore, so long as the exemption Order continued to remain in force, the Company was not liable to pay specified duty under Section 4 of the Kerala Electricity Duty Act. Neither the State Government nor the Board was within its rights to demand from the company electricity duty at the rate over and above what has been provided in the exemption Order. We are, therefore, of the opinion that the High Court was right in setting aside the demand of duty which was based without reference to the statutory exemption provided to the appellant-company. 7. In C.A. No. 155/1998, it was urged on behalf of the company that by virtue of sub-section (5) of Section 49 of the Act, the appellant company has been picked up for hostile discrimination and as such the said provision is violative of Article 14 of the Constitution. According to the learned counsel it is open to the Board to enter into a special agreement under the provisions of sub-section (3) of Section 49 with other similarly situated consumers, but the appellant-company alone been denied that benefit, and in future the appellant-company has been deprived of from entering into a special agreement under sub-section (3) of Section 49 of the Act. We find the argument of learned counsel is totally misplaced. We have seen in the earlier part of the judgment that the appellant-company was the only consumer with whom the Board had a special agreement when sub-section (5) was inserted in Section 49 of the Act, and, therefore, it was that agreement which was to be dealt with to enable the Board to collect the normal tariff under section (1) of Section 49 of the Act. This was done only to bring the appellant-company under the umbrella of uniform tariff. Thus, there was a reasonable basis for classification deducible from the objects and reasons to make the uniform tariff rate applicable to the appellant-company and to rescind the concessional rate which the appellant-company was enjoying. By the said provision the appellant-company was brought at par with the other similarly situated consumers. The appellant-company has been treated alike and the said amendment has made the Company liable to pay the electricity charges at normal tariff applicable to other similar situated consumers. By the Amendment Act, sub-section (3) of Section 49 has not been affected. It still exists in the Act and it is always open to the Board to enter into a special agreement under sub-section (3) of Section 49 of the Act with any consumer, including the appellant-company. So long as Section 49(3) remains in force, there is nothing to prevent the Board to exercise that power in favour of the consumers, including the appellant-company. However, this power under Section 49(3) is subject to sub-section (4) of Section 49 of the Act, whereby the said power has to be exercised without showing any undue influence to any consumer. Neither sub-section (3) nor sub-section (5) of Section 49 places any restriction on exercise of power of the Board to enter into a fresh agreement with the appellant-company in case the appellant-company makes out a case for supplying electricity at a concessional rates. Had the legislature intended that in future no special agreement was to be entered into under sub-section (3) of Section 49, the legislature could have very well omitted sub-section (3) of Section 49 of the Act, but has deliberately retained it with the result that, if in future circumstances demand, the Board can enter into a special agreement subject to the provisions of sub-section (4) of Section 49 of the Act. Sub-section (5) has been enacted only to rescind the agreement for supply of electricity at concessional rates incorporated in the special agreement prior to the Act of 1983 and it did not create any bar in future to enter into an agreement under Section 49(3) of the Act. The appellant-company, as well as other similarly situated consumers, are entitled to enter into an agreement with the Board if circumstances so demand, so long as sub-section (3) of Section 49 is in force. Before the High Court, as well as here in this appeal, it was stated on behalf of the State that sub-section (5) of Section 49 has not taken away the right of the Board to exercise its power to enter into an agreement with the appellant-company if the circumstances so demand. Under such circumstances we do not find any merit in the contention that by the Amendment Act that it is open to the Board to enter into special agreement with other consumers while denying such benefit to the appellants-company. We, therefore, hold that sub-section (5) of Section 49 is not violative of Article 14 of the Constitution.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]On a perusal of(5) it is clear that by this amendment the agreement entered into between the company and the Board was not rescinded. What was rescinded, was the concessional rates at which the company was receiving electricity. The agreement, as a whole, was not rescinded. For other purposes it remained intact. It is also clear from the fact that, on insertion of(5) in Section 49 of the Act in the year 1983, no fresh agreement was entered into between the Board and the company and the old agreement continued. Had there been an abrogation of the entire agreement, the Board would not have supplied electricity to the company. At no point of time, the Board after passing of the Amendment Act stopped supplying electricity to the company or entered into any fresh agreement for supply ofare, therefore, of the view that by virtue of insertion of(5) in Section 49 of the Act the special agreement entered into between the Board and company as a whole was not annulled and only thing that was annulled was the agreement relating to rates of electricity payable by the company under the agreement and further the said Amendment Act did not in any manner affect the payment of duty by the Company at the concessionalIn C.A. No.find the argument of learned counsel is totally misplaced. We have seen in the earlier part of the judgment that thewas the only consumer with whom the Board had a special agreement when(5) was inserted in Section 49 of the Act, and, therefore, it was that agreement which was to be dealt with to enable the Board to collect the normal tariff under section (1) of Section 49 of the Act. This was done only to bring theunder the umbrella of uniform tariff. Thus, there was a reasonable basis for classification deducible from the objects and reasons to make the uniform tariff rate applicable to theand to rescind the concessional rate which thewas enjoying. By the said provision thewas brought at par with the other similarly situated consumers. Thehas been treated alike and the said amendment has made the Company liable to pay the electricity charges at normal tariff applicable to other similar situated consumers. By the Amendment Act,(3) of Section 49 has not been affected. It still exists in the Act and it is always open to the Board to enter into a special agreement under(3) of Section 49 of the Act with any consumer, including theSo long as Section 49(3) remains in force, there is nothing to prevent the Board to exercise that power in favour of the consumers, including theHowever, this power under Section 49(3) is subject to(4) of Section 49 of the Act, whereby the said power has to be exercised without showing any undue influence to any consumer. Neitherion (5) of Section 49 places any restriction on exercise of power of the Board to enter into a fresh agreement with thein case themakes out a case for supplying electricity at a concessional rates. Had the legislature intended that in future no special agreement was to be entered into under(3) of Section 49, the legislature could have very well omitted(3) of Section 49 of the Act, but has deliberately retained it with the result that, if in future circumstances demand, the Board can enter into a special agreement subject to the provisions of(4) of Section 49 of the Act.(5) has been enacted only to rescind the agreement for supply of electricity at concessional rates incorporated in the special agreement prior to the Act of 1983 and it did not create any bar in future to enter into an agreement under Section 49(3) of the Act. Theas well as other similarly situated consumers, are entitled to enter into an agreement with the Board if circumstances so demand, so long as(3) of Section 49 is in force. Before the High Court, as well as here in this appeal, it was stated on behalf of the State that(5) of Section 49 has not taken away the right of the Board to exercise its power to enter into an agreement with theif the circumstances so demand. Under such circumstances we do not find any merit in the contention that by the Amendment Act that it is open to the Board to enter into special agreement with other consumers while denying such benefit to theWe, therefore, hold that(5) of Section 49 is not violative of Article 14 of the Constitution.