Case Law Details
Southern Ferro Ltd. Vs State of Karnataka (Karnataka High Court)
In respect of electricity supplied to the consumers by a non-licensee through a licensee, the electricity tax payable is on the units of the electricity supplied. Obviously, the unit of electricity supplied is the indicator of the quantum of electricity consumed and since the electricity was procured through Open Access Source, electricity tax can be calculated only on the rates at which the electricity was procured from the Open Access Source.
It is not in dispute that electricity that is purchased through Open Access Source is not a purchase which is shrouded in mystery. In fact, it is the admitted case of both parties that electricity is purchased through an electricity exchange where the consumer makes a purchase on the previous day at the rate prevailing in the exchange and at the end of the month, the units of electricity sold by the consumers is intimated to the State Load Dispatching Centre. It can, therefore, be easily gathered as to the quantum of electricity purchased by the consumer and the rate at which the consumer had purchased the electricity. It is quite obvious that electricity tax would have to be levied and collected at a particular rate at which the consumers had purchased the electricity from the electricity exchange.
If the argument of the State is accepted that electricity tax is payable at the rate at which the licensee sell the electricity to consumers, it would fundamentally defeat the very purpose for which the electricity reforms were initiated which enabled the consumers to procure electricity from private purchasers and through Open Access Source. It is to be borne in mind that the person who sells the electricity would necessarily pay the wheeling and access charges to the licensee and the seller of electricity would be basically using the infrastructure of the licensee and paying for the distribution. The licensee, therefore, would have no preferential right.
Learned Additional Advocate General vehemently contended that the validity of Sections 3 and 4 of the Act had been upheld in W.P.No.14434/2016 and connected matters disposed of on 04.10.2016 and therefore, the petitioner could not challenge the demand notice.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
