COMMISSIONER OF INCOME TAX Vs. GODHRA ELECTRICITY COMPANY LIMITED

JUDGEMENT

(1.) THESE three references under s. 256(1) of the I.T. Act, 1961, raise a common question for determination in the backdrop of the following facts.

(2.) THE Government of Bombay granted a licence under the Indian Electricity Act, 1910, to a concern known a Lady Sulochna Chinubhai and Company on November 19, 1922, authorizing it to generate and supply electricity to the consumers in Godhra. The assessee is the successor of the said licensee. After the Electricity (Supply) Act, 1948, came into force, a rating committee was constituted under s. 57(2) thereof at the request of the assessee on January 19, 1950. On the recommendation of the said committee certain charges were fixed with effect from February 1, 1952. Thereafter the Electricity (Supply) Act was amended sometime in 1956. The assessee unilaterally increased the charges for motive power with effect from January 1, 1963, to 35np. per unit with a minimum of Rs. 7 per month for every installation. A few months thereafter, that is, on June 22, 1963, the assessee increased in the rates of motive power as well as for light and fans led to the institution of two Suits Nos. 152/63 and 50/64, in the Court of Civil judge (Senior Division) at Godhra. By the said two suits the consumers challenged the right of the assessee to unilaterally increase the charges for motive power and the rates for lights and fans as stated earlier. Those two representative suits were decided by the trial court in favour of the respective consumers. Against the said decision the assessee filed two separate appeals which were ultimately dismissed by the learned assistant judge, Panchamahals at Godhra. The assessees, therefore, filed two separate second appeals in this court which too were dismissed by a learned assistant single judge of this court on April 11, 1966, vide: Godhra Elec. Co. Ltd. v. Somlal [1967] 8 GLR 686. The assessee feeling aggrieved by the decision in the aforesaid two second appeals rendered by the learned single judge, preferred Letters Patent Appeal Nos. 42 and 43 of 1966 which were disposed of by a Division Bench of this court on December 3, 1968. The Division Bench of this court in the aforesaid two Letters Patent Appeals reversed the decrees passed in favour of the respective consumers and dismissed both the suits holding that under the Electricity (Supply) Act, as amended in 1956, the assessee was entitled to enhance the charge unilaterally subject to the conditions prescribed in the Sixth Schedule to the said Act. The respective consumers feeling aggrieved by the decision of the Division Bench of this court in the aforesaid two Letters Patent Appeals carried the matter to the Supreme Court. The Supreme Court its judgment dated February 26, 1969, affirmed the view expressed by the Division Bench of this court and consequently, dismissed both the appeals preferred by the respective consumers, vide: Jindas Oil Mills v. Godhra Electricity Co., : [1969]3SCR836 . The question which the Supreme Court was required to answer in the said two appeals was whether under the provisions of the Electricity (Supply) Act, as amended in 1956, the assessee was competent to unilaterally enhance the charges. The Supreme Court, after considering ss. 57 and 57A along with the Sixth Schedule to the said Act, came to the conclusion that the assessee was entitled in law to unilaterally enhance the charges as it had admittedly followed the procedure prescribed by law. After this decision of the Supreme Court upholding the right of the assessee to unilaterally enhance the charges or rates for motive power as well as for lights and fans, it is obvious that there was no impediment in the assessee recovering consumption charges from its consumers at the enhanced rate since the interim injunction no more held the field.

(3.) CERTAIN developments which took place subsequently and which are not brought out in the order of the income -tax Appellate Tribunal were mentioned to us in the course of hearing of these references. We may briefly set out those facts in respect of which there is no controversy.