Case: State of M.P. and Ors Vs. Birla Jute Manufacturing Co. Ltd. and Anr

4. Facts which are material for a proper consideration of the questions arising for our decision in the said appeal and writ petition, could be stated thus: M/s Birla Ltd. has set up several industries all over the country for the manufacture and sale of consumable goods. One of such industries set up by M/s Birla Ltd. is M/s Satna Cement Works with limestone mines at one place and a cement factory at another place, in the State of Madhya Pradesh. Huge limestone boulders extracted from the mines known as dhokas are broker into small sized limestones known as gittis for being used as raw material for the manufacture of cement in the cement factory by a limestone crusher erected in a premises located at thed of limestone mines to which the Mines Act applies. For the electrical energy consumed by the limestone crusher in that premises at, the Government of Madhya Pradesh levied duty under Section 3 of the 1949 Act at a rate calculated under Item (1) of the table below that section and raised demands thereon, against M/s Birla Ltd. Such levies and demands were refuted by M/s Birla Ltd. by contending that it was liable for levy of duty on electrical energy consumed for breaking dhokas into gittis by the limestone crusher in the premises atd only at a rate calculated in Item (2) of the Table to Section 3 of the 1949 Act, notwithstanding the applicability of the Mines Act to the said premises, in that that premises had to be regarded as a factory for fixing the rate of duty payable on electrical energy consumed therein because of inclusive meaning of factory given in Explanation (c) to Section 3 of the 1949 Act itself. Since the Government of Madhya Pradesh persisted in its demands made against M/s Birla Ltd., the latter filed a writ petition, Misc. WP No. 520 of 1980 in the Madhya Pradesh High Court challenging the said levies and demands. A Division Bench of the High Court taking the aid of Explanation (c) to Section 3 of the 1949 Act, quashed the levies and demands challenged by M/s Birla Ltd., by upholding the contention that its liability to pay duty was only at the rate calculated under clause (2) of the Table to Section 3 of the 1949 Act, by its judgment and order dated2 rendered in that writ petition. It is the correctness of that judgment and order which has been under challenge in the present appeal filed by the State of Madhya Pradesh, its Electrical Adviser and Regional Accounts Officer of the Madhya Pradesh Electricity Board  5. While, the correctness of the said judgment and order of the High Court in the present appeal was pending consideration and decision by this Court, the State of Madhya Pradesh enacted and brought into force the aforesaid Validation Act. What has been impugned in the present writ petition by M/s Birla Ltd. is the constitutional validity of that Validation Act

Reasoning:
8. As seen from Section 3 above, duty leviable thereunder and payable to the State Government every month on electrical energy sold or supplied or consumed during the preceding month is required to be calculated at the rate per unit specified in the Table given below that section. As per the Table, duty payable for the electrical energy sold or supplied for consumption varies from item to item, depending upon the purpose for which it is consumed. When Item (1) of the Table is seen, the rate of duty payable for electrical energy sold or supplied for consumption in a premises covers premises used for business, trade or commercial purposes or for purposes of professional pursuits other than for flour mills. Because of the Explanation (b) to the section which says that for the purpose of the sections used for business, trade, commercial purposes or for purpose of professionalshall include the premises used for the purpose of minesto which the Mines Act, 1952applies, any premises in or adjacent to a mine which is used for processing the mineral extracted from the mine, becomes the premises covered under Item (1) of the Table. When Item (2) of the Table is seen, the rate of duty payable for electrical energy sold or supplied for consumption in a premises covers a factory, because of Explanation (c) which says that for the purpose of the section factory not only means a factory registered under the Factories Act, 1948, but also includes a premises used for the purpose of industries which require raw materials for carrying on the manufacturing process and prepare finished goods for sale. When Item (3) of the Table is seen, it refers to the rate of duty payable on electrical energy sold or supplied for purposes of illumination on the occasion of marriages or other social functions. When Item (4) of the Table is seen, it refers to the rate of duty payable for electrical energy sold or supplied for consumption in a township or colony attached to a factory, mine or institution or a premises getting supply at high voltage or extra high voltage but not covered under Items (1) and (2) of the Table. The rates fixed in respect of electrical energy sold or supplied for consumption in a premises covered by Item (4) cannot be regarded as a premises covered by Item (1) or Item (2) of the Table because of the specific exclusion of those items, as mentioned in Item (4) itself. As seen from Item (5 of the Table, the rate of duty payable for electrical energy sold or supplied for premises or purposes covered thereunder cannot apply to premises or purposes covered in Items (1) to (4) of the Table because of their specific exclusion as mentioned thereunder. When the rates of duty leviable under various items in the Table are seen, each of them applies, according to the purpose for which electrical energy is sold or consumed. Then, comes the proviso to the Table which declares that the electrical energy sold or supplied for consumption for any one purpose is used either wholly or partly, without the consent of the distributor of energy or producer of electricity, as the case may be, for consumption for any other purpose for which a higher rate of duty is chargeable, the entire energy sold or supplied shall be charged at the highest rate applicable. This, proviso, therefore, expressly states that the rates of duty leviable for electrical energy consumed by premises or purpose covered by more than one item, it is the highest rate fixed under them which is leviable where the consumer of electrical energy does not obtain the consent from the distributor of electrical energy or producer of electricity for change is such user. Hence, according to the proviso if consent is obtained by the consumer of electrical energy from the distributor of energy or producer of electricity for using electrical energy in premises of a factory covered by Item (2) it cannot be used for premises assured under Item (1) and if such thing is done without obtaining such consent, instead of lower duty payable for a premises covered under Item (2), higher duty for a premises covered under Item (1) becomes payable. In other words, proviso to the Table requires that a consumer of electrical energy must declare before such consumption as to the purpose for which it would be consumed in the sense whether it would be consumed for the propose covered under Item (1) or Item (2) or Item (3) or Item (4) or item (5) of the Table. The requirement of the proviso when is understood in the context of the provisions under different items, the purpose for which electrical energy is consumed, if falls under more than one item, the rate at which duty becomes leviable would be of the item for which highest rate of duty is fixed9. If regard is had to the aforesaid analysis of Section 3, its Table and Explanation, as to their ambit and applicability, can it be held that the rate of duty payable for electrical energy consumed in premises covered by Item (2) of Table to Section 3 of the 1949 Act is the rate provided for thereunder, even where for such premises (factory), the Mines Act is made applicable, is the question10. No doubt, as we have already pointed out a factory under clause (c) to the Explanation to Section 3 since includes premises used for purposes of industries which require raw materials for carrying on the manufacturing process and prepare finished goods for sale, the premises of M/s Birla Ltd. at thed of their limestone mines of the State of Madhya Pradesh where limestone bouldersdhokas extracted from the mines are broken into small pieces, i.e., gittis for being used in their cement factory or factory requiring raw material for carrying on the manufacturing process and prepare finished goods of cement for sale, falls within the description of premises covered by Item (2) of the Table to Section 3 of the 1949 Act. But the question ins when such premises also falls within the description of premises covered by Item (1) because of clause (b)(1) to the Explanation whether the duty payable for electrical energy used therein could only be what is payable for premises under Item (2) of Table to Section 3. Since a premises for which Mines Act is made applicable becomes a premises covered by Item (1) of Table to Section 3 of the 1949 Act which provides for highest rate of duty leviable for electrical energy consumed in such premises question of leviability of lower duty for such consumption merely because of that premises answering the description of premises in other item of the Table respecting which lower duty is leviable can never arise, for as we have pointed out already, when once highest rate under an item is leviable, lower rate leviable under other items is excluded. It is, therefore, our considered view that premises covered by Item (1) to the Table to which Mines Act is made applicable being the premises of M/s Birla Ltd. at theire gets covered by Item (1) of the Table and hence the duty payable for consumption of electrical energy in that premises shall be at the rate payable for the premises covered under Item (1) of the Table to Section 3 of the 1949 Act11. Hence, the view taken by the High Court in the judgment and order under appeal that the premises of M/s Birla Ltd. at thee being a factory premises covered by Item (2) of the Table to Section 3 of the 1949 Act, the payment of duty leviable in respect of electrical energy consumed in that premises is covered by Item (2) of the Table, becomes unsustainable and calls to be interfered with13. Although the learned counsel for the petitioners in the writ petitions sought to question the provisions of the Validation Act which purport to retrospective validate levy of duty on electrical energy consumed in their premises under the 1949 Act because of the view taken of Section 3 of the 1949 Act by the High Court in its judgment and order under the present appeal, the learned counsel for the State of Madhya Pradesh sought to support the sustainability of the Validation Act placing reliance on the decision of this court in Govt. of A.P. v. Hindustan Machine Tools Ltd. Where this Court had upheld the provisions of a Validation Act by which duty made payable in respect of a building premises retrospectively. Prima facie, the decision of this Court appears to support the stand of the learned counsel for the State. But, when the judgment and order of the High Court under the present appeal, which is sought to be made ineffective by the Validation Act, is held to be unsustainable by us in the present appeal, we find it unnecessary, to examine the constitutionality of the Validation Act