STATE OF ANDHRA PRADESH Vs. NATIONAL THERMAL POWER CORPORATION LIMITED

JUDGEMENT

(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.

(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.