STATE OF ANDHRA PRADESH Vs. NATIONAL THERMAL POWER CORPORATION LIMITED
LAWS(SC)-2002-4-55
SUPREME COURT OF INDIA (FROM: ANDHRA PRADESH)
Decided on
April 22,2002
STATE OF ANDHRA PRADESH
Appellant
VERSUS
NATIONAL THERMAL POWER CORPORATION LIMITED
Respondents
Referred Judgements :-
BENGAL IMMUNITY COMPANY LIMITED VS. STATE OF BIHAR [REFERRED]RAM NARAIN SONS LIMITED VS. ASST COMMISSIONER OF SALES TAX [REFERRED]
TATA IRON AND STEEL CO LIMITED BOMBAY VS. S R SARKAR [REFERRED]
JIYAJEERAO COTTON MILLS LIMITED BIRLANAGAR GWALIOR VS. STATE OF MADHYA PRADESH [REFERRED]
CALCUTTA GAS COMPANY PROPRIETARY LIMITED VS. STATE OF WEST BENGAL [REFERRED]
BURMAH SHELL OIL STORAGE AND DISTRIBUTION COMPANY OF INDIA LIMITED BELGAUM VS. BELGAUM BOROUGH MUNICIPALITY BELGAUM [REFERRED]
COMMISSIONER OF SALES TAX MADHYA PRADESH INDORE VS. MADHYA PRADESH ELECTRICITY BOARD JABALPUR [REFERRED]
BALABHAGAS HULASCHAND KELURAM RAMKARAN VS. STATE OF ORISSA [REFERRED]
MANGANESE ORE INDIA LIMITED VS. REGIONAL ASSISTANT COMMISSIONER OF SALES TAX JABALPUR [REFERRED]
ENGLISH ELECTRIC COMPANY OF INDIA LIMITED ENGLISH ELECTRIC CO OF INDIA LIMITED ENGLISH ELECTRIC COMPANY OF INDIA LIMITED VS. DEPUTY COMMERCIAL TAX OFFICER:DEPUTY COMMERCIAL TAX OFFICER:GOVERNMENT OF TAMIL NADU [REFERRED]
UNION OF INDIA VS. K G KHOSLA AND COMPANY LIMITED [REFERRED]
SHIV DUTT RAI FATEH CHAND OM PRAKASH SHEO PRAKASH VS. UNION OF INDIA [REFERRED]
SAHNTEY STEEL AND PRESS WORKS LIMITED VS. COMMERCIAL TAX OFFICER [REFERRED]
INDIAN ALUMINIUM CO VS. STATE OF KERALA [REFERRED]
XXTH CENTURY FINANCE CORPORATION LIMITED VS. STATE OF MAHARASHTRA [REFERRED]
Cited Judgements :-
NATIONAL ORGANIC CHEMICAL INDUSTRIES LTD VS. STATE OF MAHARASHTRA [LAWS(BOM)-2004-1-74] [REFERRED TO]K K VYAS VS. STATE OF CHHATTISGARH [LAWS(CHH)-2011-4-15] [REFERRED]
M/S. BRAHMOS AEROSPACE PRIVATE LIMITED VS. THE STATE OF MAHARASHTRA [LAWS(BOM)-2017-1-31] [REFERRED TO]
NAZ FOUNDATION VS. GOVERNMENT OF NCT OF DELHI [LAWS(DLH)-2009-7-1] [REFERRED TO]
BHARATI AIRTEL LTD VS. STATE OF ASSAM [LAWS(GAU)-2016-9-4] [REFERRED TO]
STERLING AGRO INDUSTRIES LTD. VS. STATE OF M.P. [LAWS(MPH)-2014-7-38] [REFERRED TO]
MOHD. RAFI, PROPRIETOR, R. B. TRADING COMPANY VS. STATE OF M. P. AND OTHERS [LAWS(MPH)-2003-4-133] [REFERRED TO]
M P POWER TRADING CO LTD VS. LANCO AMARKANTAK POWER PVT LTD [LAWS(MPH)-2008-6-27] [REFERRED TO]
M/S. ASIAN ALLOYS LIMITED AND ORS. VS. STATE OF PUNJAB AND ORS. [LAWS(P&H)-2013-9-315] [REFERRED TO]
CAIRN INDIA LIMITED & ANOTHER VS. THE STATE OF RAJASTHAN & OTHERS [LAWS(RAJ)-2016-7-258] [REFERRED TO]
STATE OF WEST BENGAL VS. KESORAM INDUSTRIES LIMITED [LAWS(SC)-2004-1-84] [REFERRED TO]
M/S VISHNU SUGAR MILLS LTD. VS. STATE OF BIHAR WITH [LAWS(PAT)-2012-7-106] [REFERRED TO]
JINDAL STAINLESS LTD.& ANR. VS. STATE OF HARYANA & ORS. [LAWS(SC)-2016-11-11] [REFERRED TO]
M P CEMENT MANUFACTURERS ASSOCIATION VS. STATE OF MADHYA PRADESH [LAWS(SC)-2003-12-78] [REFFERED TO (PARA 18) 8.]
ASSISTANT ENGINEER (D1), AJMER VIDYUT VITRAN NIGAM LIMITED VS. RAHAMATULLAH KHAN [LAWS(SC)-2020-2-64] [REFERRED TO]
M/S MAGADH SUGAR & ENERGY LTD. VS. STATE OF BIHAR [LAWS(SC)-2021-9-86] [REFERRED TO]
SRI BHARGAVI AGRO TECH VS. ASSISTANT COMMISSIONER (CT), KAKINADA, EAST GODAVARI [LAWS(APH)-2014-10-60] [REFERRED TO]
LARSEN AND TOUBRO LTD. VS. STATE OF ANDHRA PRADESH AND ORS. [LAWS(APH)-2015-9-16] [REFERRED TO]
BABA AND SONS TRADELINK CO. VS. STATE OF CHHATTISGARH AND OTHERS [LAWS(CHH)-2010-10-44] [REFERRED TO]
SURYACHAKRA SPINNING MILLS P LTD VS. STATE OF TAMIL NADU [LAWS(MAD)-2006-7-247] [REFERRED TO]
COMMISSIONER OF COMMERCIAL TAXES VS. N.K. PODUVAL & CO. [LAWS(KER)-2013-10-142] [REFERRED TO]
NATIONAL HYDRO-ELECTRIC POWER CORP LTD VS. STATE OF J&K [LAWS(J&K)-2004-10-18] [REFERRED TO]
NTPC LTD SIDHI VS. COMMISSIONER MUNICIPAL CORPORATION SINGRAULI [LAWS(MPH)-2012-2-117] [REFERRED TO]
VIJAYA STEELS LIMITED, KALLANAYAKANAHALLI, ANCHEPALYA POST, KUNIGAL TALUK, KUNIGAL VS. BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED, BENGALURU AND OTHERS [LAWS(KAR)-2016-10-16] [REFERRED TO]
TRIVENI ENGINEERING AND INDUSTRIESLTD VS. STATE OF U P [LAWS(ALL)-2005-5-209] [REFERRED TO]
MOHD ISMAIL AHMED VS. STATE OF CHHATTISGARH AND OTHERS [LAWS(CHH)-2011-4-79] [REFERRED TO]
HINDALCO INDUSTRIES LTD VS. GUJARAT ENERGY TRANSMISSION CORPORATION LIMITED [LAWS(GJH)-2008-10-226] [REFERRED TO]
ASHOK IRON WORKS PVT LTD VS. H V BALACHANDRA [LAWS(SC)-2009-2-36] [REFERRED TO]
SHEEN GOLDEN JEWELS (INDIA) PVT. LTD. VS. STATE TAX OFFICER(IB)-1, INVESTIGATION BRANCH [LAWS(KER)-2019-1-148] [REFERRED TO]
MY HOME CEMENT IND.LTD VS. TRANSMISSION CORPN.OF AP LTD [LAWS(TLNG)-2023-8-13] [REFERRED TO]
SOUTHERN PETROCHEMICAL INDUSTRIES CO LTD VS. ELECTRICITY INSPECTOR AND E T I O [LAWS(SC)-2007-5-192] [REFERRED TO]
GTN ENTERPRISES LIMITED VS. SUPERINTENDENT REGULATED MARKET COMMITTEE [LAWS(MAD)-2011-10-118] [REFERRED TO]
ACC LIMITED VS. STATE OF KARNATAKA [LAWS(KAR)-2019-11-85] [REFERRED TO]
BUISHI YADA MOTORS VS. STATE OF ARUNACHAL PRADESH [LAWS(GAU)-2003-7-19] [REFERRED TO]
UNITED MANUFACTURING CO. VS. STATE OF BIHAR [LAWS(PAT)-2008-3-35] [REFERRED TO]
KARTAR SINGH VS. PUNJAB STATE ELECTRICITY BOARD [LAWS(P&H)-2014-3-442] [REFERRED TO]
STATE OF UTTAR PRADESH VS. UNION OF INDIA [LAWS(SC)-2003-2-112] [REFERRED]
OSAW AGRO INDUSTRIES PVT. LTD. VS. STATE OF PUNJAB [LAWS(P&H)-2007-8-72] [REFERRED TO]
E.C.E. INDUSTRIES LIMITED VS. STATE OF PUNJAB [LAWS(P&H)-2007-12-66] [REFERRED TO]
RELIANCE INDUSTRIES LIMITED VS. STATE OF U P [LAWS(ALL)-2012-9-9] [REFERRED TO]
M/S PASHUPATI CASTINGS LTD. VS. STATE OF U.P. [LAWS(ALL)-2014-1-22] [REFERRED TO]
BHARTI AIRTEL LTD VS. STATE OF KARNATAKA [LAWS(KAR)-2009-1-32] [REFERRED TO]
DEEPAK SPINNERS LIMITED VS. STATE OF MADHYA PRADESH AND ANOTHER [LAWS(MPH)-2017-8-123] [REFERRED TO]
B S SUNDARAVADIVEL MUDALIAR AND SONS VS. STATE OF M P [LAWS(MPH)-2003-4-1] [REFERRED TO]
SARASWATHI AGENCIES VS. SALES TAX APPELLATE TRIBUNAL MAIN BENCH CHENNAI [LAWS(MAD)-2008-10-240] [REFERRED TO]
RANGA REDDY DISTRICT PRADESH PANCHAYAT RAJ DEPARTMENT HYDERABAD VS. STATE OF A P [LAWS(APH)-2004-1-74] [REFERRED TO]
RANGA REDDY DISTRICT PRADESH PANCHAYAT RAJ DEPARTMENT HYDERABAD VS. STATE OF A P [LAWS(APH)-2004-1-74] [REFERRED TO]
RANA SUGARS LTD. VS. STATE OF PUNJAB [LAWS(P&H)-2013-9-65] [REFERRED TO]
ASHOK LEYLAND LIMITED VS. STATE OF TAMIL NADU [LAWS(SC)-2004-1-1] [REFERRED TO]
TAMILNADU PETROPRODUCTS LIMITED VS. THE ASSISTANT COMMISSIONER (CT), FAST TRACK ASSESSMENT CIRCLE II [LAWS(MAD)-2016-8-2] [REFERRED TO]
MITSUBISHI CORPORATION VS. STATE OF KARNATAKA AND OTHERS [LAWS(KAR)-2011-9-252] [REFERRED TO]
KERALA STATE ELECTRONICS DEVELOPMENT CORPORATION LTD VS. STATE OF KERALA [LAWS(KER)-2003-11-75] [REFERRED TO]
RAJASHREE CEMENT VS. STATE OF KARNATAKA [LAWS(KAR)-2006-12-56] [REFERRED TO]
PTC INDIA LIMITED VS. JAIPRAKASH POWER VENTURES LTD [LAWS(DLH)-2012-5-660] [REFERRED TO]
K C NINAN VS. KERALA STATE ELECTRICITY BOARD [LAWS(SC)-2023-5-102] [REFERRED TO]
M/S. NTPC LIMITED VS. THE STATE OF BIHAR [LAWS(PAT)-2016-12-73] [REFERRED TO]
HISAR METAL INDUSTRIES LIMITED VS. STATE OF HARYANA AND ORS. [LAWS(P&H)-2014-5-675] [REFERRED TO]
TENZING MATCH WORKS VS. DEPUTY COMMISSIONER OF INCOME TAX [LAWS(MAD)-2019-7-118] [REFERRED TO]
GODAWAT PAN MASALA PRODUCTS I P LIMITED VS. UNION OF INDIA [LAWS(SC)-2004-8-138] [REFERRED TO]
GVK INDS LTD VS. INCOME TAX OFFICER [LAWS(SC)-2011-3-48] [DISTINGUISHED]
NATIONAL THERMAL POWER CORPORATION LIMITED VS. STATE OF BIHAR [LAWS(PAT)-2010-12-65] [REFERRED TO]
ODISHA POWER GENERATION CORPORATION LTD. VS. STATE OF ODISHA AND ORS. [LAWS(ORI)-2015-3-20] [REFERRED TO]
RIONS INDIA VS. STATE OF PUNJAB [LAWS(P&H)-2013-3-201] [REFERRED TO]
GVK INDS LTD VS. INCOME TAX OFFICER [LAWS(SC)-2010-3-51] [REFERRED TO]
STEEL AUTHORITY OF INDIA VS. STATE OF HARYANA AND ANR [LAWS(P&H)-2006-10-612] [REFERRED]
N C R CORPORATION INDIA PVT LTD VS. DEPUTY COMMISSIONER OF COMMERCIAL TAXES [LAWS(KAR)-2008-9-66] [REFERRED TO]
BIOCON LTD VS. STATE OF KARNATAKA [LAWS(KAR)-2011-3-2] [REFERRED TO]
PR COMMISSIONER OF INCOME-TAX-6 VS. NTPC SAIL POWER CO PVT LTD [LAWS(DLH)-2019-2-342] [REFERRED TO]
RCI POWER LIMITED CHENNAI VS. UNION OF INDIA [LAWS(APH)-2003-4-118] [REFERRED TO]
SAJJAN KUMAR SHARMA VS. COMMERCIAL TAX OFFICER [LAWS(CAL)-2003-4-37] [REFERRED TO]
JUDGEMENT
R.C.LAHOTI, J. -
(1.)THE High Court of Andhra Pradesh at Hyderabad, has, by its impugned judgment dated 11/04/1990, allowed the writ petition filed by the respondent National THErmal Power Corporation Ltd. (hereinafter 'NTPCL', for short) and declared that the levy of duty by the State of Andhra Pradesh on the sales of electrical energy generated by the Corporation-respondent No.1 at its thermal power station set up at Ramagundam, within the State of Andhra Pradesh and sold to the Electricity Boards of Karnataka, Kerala, Tamil Nadu and the State of Goa in pursuance of contracts of sales occasioning inter-State movement of electricity in incompetent and outside the power of State Legislature. Consequently, the tax levied and collected has also been held to be without authority of law, hence liable to be refunded in accordance with law. On a prayer made by the learned Advocate General on behalf of the State of Andhra Pradesh, the High Court certified that the case involves a substantial question of law as to the interpretation of Constitution under Article 132. THE appeal has been filed pursuant to the certificate so granted by the High Court. On 4-10-1991, a bench of two learned Judges directed the appeal to be placed for hearing before a Constitution Bench, as required by Clause (3) of Article 145 of the Constitution.
(2.)AT a point of time when this Court was seized of the appeal filed by the State of Andhra Pradesh, NTPCL moved a petition under Article 139A of the Constitution seeking withdrawal of Writ Petition No. 1941 of 1996 NTPCL v. State of Madhya Pradesh and others pending in the High Court of Madhya Pradesh at Jabalpur to this Court. The prayer was allowed vide order dated 13-10-1997 and on receipt of the records from High Court of Madhya Pradesh the same has been registered here as T-C-3/1998.
The State of Madhya Pradesh and newly formed State of Chhattisgarh with effect from 1-11-2000, during the pendency of the petition were noticed and the parties thereto have been heard analogously with the hearing in C.A. No. 3112/1990. However, for convenience sake we will refer to States of Madhya Pradesh and Chhattisgarh as State of M.P. only as admittedly until the formation of new State the two power stations in question were situated therein only.
Andhra Pradesh Electricity Duty Act, 1939 provides for levy of duty on certain sales and consumption of electricity by licensees in the State of Andhra Pradesh. The definition of the term 'licensee' specifically includes the National Thermal Power Corporation (Respondent No.1) or any other Corporation engaged in the business of supplying energy. Section 3 of the Act is the charging section, the relevant part whereof reads as under:-
"3. Levy of a duty in certain sales of electrical energy.- (1) Save as otherwise provided in sub-section (2), every licensee in the State of Andhra Pradesh shall pay every month to the State Government in the prescribed manner, a duty calculated at the rate of four paise per units of energy, on and in respect of all sales of energy except sales to the Government of India for consumption by that Government or sales to the Government of India or a railway company operating any railway for consumption in the construction, maintenance or operation of that railway effected by the licensee during the previous month, at a price of more than twelve paise per unit and on and in respect of all energy which was consumed by the licensee during the previous month for purposes other than those connected with the construction, maintenance and operation of his electrical undertaking and which, if sold to a private consumer under like conditions, would have fetched a price of more than twelve paise per unit.
Provided that no duty under this sub-section shall be payable on and in respect of sale of energy effected:-
(a) by the Andhra Pradesh State Electricity Board to any other licensee;
(b) by the National Thermal Power Corporation to the Andhra Pradesh State Electricity Board".
(3.)A bare reading of the provision shows that duty is leviable at the prescribed rate on 'all sales of energy' effected by the licensee during the previous months at a price of more than 12 paise per unit. Duty is also leviable on all energy consumed by the licensee. There are certain categories of sales and consumption saved and excluded from what would otherwise have been dutiable. However, in the present case, we are not concerned with those exclusions, nor with levy of duty on consumption. The limited question arising for our consideration is - whether sales of energy by NTPCL, the respondent No.1, to several Electricity Boards situated outside the State of Andhra Pradesh and to the State of Goa, attract the incidence of taxation under Section 3 of the Act.
According to the facts found by the High Court, NTPCL, a Government Company, wholly owned by the Government of India, has set up several super thermal power stations in different parts of the country normally located near coal-pit heads. One such super thermal power station is set up in Ramagundam in Karimnagar District of the State of Andhra Pradesh. There are various transmission lines and sub-stations through which the power generated at Ramagundam station is transmitted to the purchasers. The power generated is fed into the southern grid and is made available to the several State Electricity Boards and the State of Goa. These facts are not in controversy and sufficient to be taken note of for the purpose of this appeal. During the course of hearing, by reference to certain documents, it was sought to be pointed out where the meters are located - within the State of M.P. or within the territories of buyer States or at both the places, by reference to reading whereof the quantum of energy sold, exported or imported is fixed and the price calculated. We do not propose to state the facts and contending submissions in that regard in details as it is unnecessary.
(2.)AT a point of time when this Court was seized of the appeal filed by the State of Andhra Pradesh, NTPCL moved a petition under Article 139A of the Constitution seeking withdrawal of Writ Petition No. 1941 of 1996 NTPCL v. State of Madhya Pradesh and others pending in the High Court of Madhya Pradesh at Jabalpur to this Court. The prayer was allowed vide order dated 13-10-1997 and on receipt of the records from High Court of Madhya Pradesh the same has been registered here as T-C-3/1998.
The State of Madhya Pradesh and newly formed State of Chhattisgarh with effect from 1-11-2000, during the pendency of the petition were noticed and the parties thereto have been heard analogously with the hearing in C.A. No. 3112/1990. However, for convenience sake we will refer to States of Madhya Pradesh and Chhattisgarh as State of M.P. only as admittedly until the formation of new State the two power stations in question were situated therein only.
Andhra Pradesh Electricity Duty Act, 1939 provides for levy of duty on certain sales and consumption of electricity by licensees in the State of Andhra Pradesh. The definition of the term 'licensee' specifically includes the National Thermal Power Corporation (Respondent No.1) or any other Corporation engaged in the business of supplying energy. Section 3 of the Act is the charging section, the relevant part whereof reads as under:-
"3. Levy of a duty in certain sales of electrical energy.- (1) Save as otherwise provided in sub-section (2), every licensee in the State of Andhra Pradesh shall pay every month to the State Government in the prescribed manner, a duty calculated at the rate of four paise per units of energy, on and in respect of all sales of energy except sales to the Government of India for consumption by that Government or sales to the Government of India or a railway company operating any railway for consumption in the construction, maintenance or operation of that railway effected by the licensee during the previous month, at a price of more than twelve paise per unit and on and in respect of all energy which was consumed by the licensee during the previous month for purposes other than those connected with the construction, maintenance and operation of his electrical undertaking and which, if sold to a private consumer under like conditions, would have fetched a price of more than twelve paise per unit.
Provided that no duty under this sub-section shall be payable on and in respect of sale of energy effected:-
(a) by the Andhra Pradesh State Electricity Board to any other licensee;
(b) by the National Thermal Power Corporation to the Andhra Pradesh State Electricity Board".
(3.)A bare reading of the provision shows that duty is leviable at the prescribed rate on 'all sales of energy' effected by the licensee during the previous months at a price of more than 12 paise per unit. Duty is also leviable on all energy consumed by the licensee. There are certain categories of sales and consumption saved and excluded from what would otherwise have been dutiable. However, in the present case, we are not concerned with those exclusions, nor with levy of duty on consumption. The limited question arising for our consideration is - whether sales of energy by NTPCL, the respondent No.1, to several Electricity Boards situated outside the State of Andhra Pradesh and to the State of Goa, attract the incidence of taxation under Section 3 of the Act.
According to the facts found by the High Court, NTPCL, a Government Company, wholly owned by the Government of India, has set up several super thermal power stations in different parts of the country normally located near coal-pit heads. One such super thermal power station is set up in Ramagundam in Karimnagar District of the State of Andhra Pradesh. There are various transmission lines and sub-stations through which the power generated at Ramagundam station is transmitted to the purchasers. The power generated is fed into the southern grid and is made available to the several State Electricity Boards and the State of Goa. These facts are not in controversy and sufficient to be taken note of for the purpose of this appeal. During the course of hearing, by reference to certain documents, it was sought to be pointed out where the meters are located - within the State of M.P. or within the territories of buyer States or at both the places, by reference to reading whereof the quantum of energy sold, exported or imported is fixed and the price calculated. We do not propose to state the facts and contending submissions in that regard in details as it is unnecessary.
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