GI POWER CORPORATION LIMITED Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) Petitioner is a power generating company. In respect of each month's tax liability under the Electricity (Taxation on Consumption) Act of 1959 (for short, hereinafter called as the 'Act 1959'), separate assessments are made and demand notice is issued for payment of tax in respect of supply of energy by the petitioner to two private companies. The petitioner aggrieved by the said demands has filed the above writ petitions. The petitioner entered into an agreement with the first respondent dated 05th May 2000 vide Annexure-'D' for generating power by setting up wind energy plant at Gogudda, Gopalpura Village, Hiriyur Taluk, Chitradurga District. The petitioner also entered into an agreement with KPTCL pursuant to Clause 4 of Annexure-'D' for transmission and supply of energy vide Annexure-'E' dated 17.07.2000. The terms of Annexure-'E' permit the petitioner to supply energy to industrial consumers with whom the KPTCL has finalized the energy selling agreements. It is pursuant to Annexure-'E', the petitioner is selling energy to two industrial consumers with whom KPTCL has an agreement. It is the contention of the respondents that the petitioner although a generating company when supplying energy to the two private industrial consumers is liable to pay tax under the Act 1959. The petitioner, however seriously disputes the liability to pay the tax under the Act 1959.

(2.) The Indian Electricity Act of 1910 a pre-constitutional statute regulated the activities of generation, transmission and supply of energy. The Indian Electricity Act of 1910 was found to be inadequate to the changing needs. Therefore. Electricity (Supply) Act of 1948 was enacted. With the advent of globalization, an era of intensive private sector participation in power generation began. The compelling need for drastic reformation with regard to power generation and supply, tariff and creation of independent regulatory body was felt, in order to answer the said needs, Karnataka Electricity Reform Act of 1999 (for short 'Act of 1999') is enacted. Later on, the Indian Electricity Act of 2003 (for short 'Act of 2003') came to be enacted.

(3.) The Section 70 of Act of 1999 declares that the provisions of Act are supplemental to Act of 1999 and Electricity (Supply) Act, 1948 to the extent the provisions, are not in conflict with the said two Central enactments. In the event of conflict, it declares that provisions of Act of 1999 would prevail.