M/S Shroff Enterprises vs The State Of Jharkhand
2021 Latest Caselaw 4060 Jhar

                                     1

           IN THE HIGH COURT OF JHARKHAND AT RANCHI

                           W. P. (T) No. 1282 of 2021
                                     With
                           W. P. (T) No. 1283 of 2021
                                      With
                           W. P. (T) No. 1300 of 2021
                                      With
                           W. P. (T) No. 1303 of 2021

              M/S Shroff Enterprises, a partnership Firm having its office, Central
              Plaza, Near Police Station, P.O. & P.S.- Deoghar District-Deoghar,
              through its Authorised Partner, Shri Abhay Kumar Shroff Son of Late
              Hanuman Prasad Shroff, Aged about 75 years, resident of Laxmi
              Niwas, Purana Mina Bazar, P.O. and P.S.- Deoghar, District-Deoghar,
              State - Jharkhand PIN 814112 ...          Petitioner (In all cases)
                                   Versus
           1. The State of Jharkhand,
              Through the Secretary-cum-Commissioner, Commercial Taxes
              Department, having its office at Project Building, Dhurwa, P.O. &
              P.S. Dhurwa, District-Ranchi, PIN-834004
           2. Deputy Commissioner of Commercial Taxes,
              Deoghar Circle, Deoghar, P.O. & P.S.-Deoghar, District-Deoghar,
              PIN-814112

           3. Assistant Commissioner of State Tax,
              Deoghar Circle, Deoghar, P.O. & P.S.-Deoghar, District-Deoghar,
              PIN-814112
           4. Punjab National Bank,
              A nationalized Bank, through its Branch Manager, Court Road Branch
              having its Office at Court Road, Deoghar, P.O. & P.S. - Deoghar,
              District-Deoghar, PIN-814112.

           5. Jharkhand Bijli Vitran Nigam Limited (JBVNL)
              A company duly registered under the provisions of the companies Act,
              1956, having its registered office at Engineering Bhawan, P.O.
              Dhurwa, P.S. Hatia, District-Ranchi, through its Chairman and
              Managing Director.         ...     ...     Respondents (In all cases)

                                         ---

CORAM: HON'BLE MR. JUSTICE APARESH KUMAR SINGH HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

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For the Petitioner : Mr. M.S. Mittal, Senior Advocate Mr. Vishnu Deo Bhagat, Advocate Mr. Salona Mittal, Advocate For the respondent No. 1 to 3 : Mr. A.K. Yadav, G.A. I For the respondent No. 4 : Mr. P.A.S. Pati, Advocate For the respondent No. 5 : Mr. Manoj Kumar, Advocate

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8/28.10.2021 Heard Mr. M.S. Mittal, learned senior counsel appearing on

behalf of the petitioner along with Mr. Salona Mittal, Advocate.

2. Heard Mr. A.K. Yadav, learned counsel appearing on behalf of the respondent-state and Mr. Manoj Kumar, learned counsel appearing for the JBVNL.

3. These writ petitions have been tagged together as common question of law are involved in all the cases and they relate to different periods.

                Writ petition number               Period
                W.P. (T) No. 1300 of 2021          2014-15
                W.P.(T) No. 1303 of 2021           2015-16
                W.P. (T) No. 1283 of 2021          2016-17
                W.P. (T) No. 1282 of 2021          2017-18

4. These writ petitions have been filed challenging the order of assessment dated 22.05.2020 for the respective period passed by the Respondents, whereby the petitioner has been directed to pay electricity duty on the amount of electricity energy consumed by the petitioner and penalty has also been imposed for not getting itself registered under the provisions of Jharkhand Electricity Duty Act and the Rules framed thereunder. The petitioner has also challenged the demand notice and the order of attachment of its bank account arising out of the order of assessment in each case. The assessment order, demand notice and the order of attachment of the bank account for realisation of the demand have been annexed in the writ petitions. Further prayer has been made for issuance of an appropriate writ directing that the Respondents have no authority in law to demand and recover the electricity duty from the petitioner who is only a consumer of electricity and not a Licensee.

5. The particulars of the impugned judgements are as under: -

Writ petition        Assessment             Demand noticeOrder of attachment of
                     order                               bank account
W.P. (T) No. 1300 of 22.05.2020             Memo no 2119 Letter no. 8438 dated
2021                        (Annexure-10)   dated 23.05.2020    22.01.2021
                                            (Annexure-11)       (Annexure-14)
W.P.(T) No. 1303 of 22.05.2020              Memo no 2120 Letter no. 8539 dated
2021                        (Annexure-10)   dated 23.05.2020    22.01.2021
                                            (Annexure-11)       (Annexure-13)


W.P. (T) No. 1283 of 22.05.2020          Memo no 2121 Letter no. 8540 dated
2021                  (Annexure-10)      dated 23.05.2020    22.01.2021
                                         (Annexure-11)       (Annexure-13)
W.P. (T) No. 1282 of 22.05.2020          Memo no 2122 Letter no. 8541 dated
2021                  (Annexure-10)      dated 23.05.2020    22.01.2021
                                         (Annexure-11)       (Annexure-15)

6. The learned senior counsel appearing on behalf of the petitioner has submitted that the impugned order of assessment has been passed treating the petitioner as a consumer of bulk supply of electricity from JBVNL. It has been alleged that the petitioner being consumer of bulk supply of electricity has not got itself registered under the provisions of Jharkhand Electricity Duty Act and Rules framed thereunder and accordingly not paid electricity duty under the said Act and consequently the impugned assessment order for each period has been passed assessing electricity Duty and imposing penalty. The learned senior counsel has submitted that though the impugned order of assessment is an ex-parte order, but the assessing Authority ought to have applied its mind while treating the petitioner as a consumer of bulk supply of electricity, in as much as the petitioner is admittedly having a shopping complex and is receiving electricity supply from JBVNL under High Tensions Agreement and is accordingly consuming the electricity. The learned counsel has referred to the agreement dated 13.04.2010 with JBVNL and as per the schedule attached to the agreement, the purpose for which the supply is given is 'market complex' at single point of supply and as per para 2 of the schedule to the agreement, the petitioner is only a consumer of electricity and not a reseller. The learned counsel submits that the Authority while passing the order has failed to consider that as per the provisions of Bihar Electricity Duty, Act, 1948 and the rules framed thereunder, the term bulk supply was never defined. Subsequently in the year 2011, vide Notification dated 24.06.2011, the term bulk supply has been defined for the first time which reads as under:

"Rule 2(ba). "Bulk Supply" means supply of energy to such

industrial units, mines or commercial consumers who are supplied with the high tensions energy connection for their respective premises."

7. Learned senior counsel further submits that subsequently there was another notification amending the rules and consequently the term "commercial consumer" has been deleted from the definition of bulk supply. He submits that it appears that the Authority while passing the impugned order has not taken note of the subsequent amendment in the rules vide S.O. 4 dated 18.06.2012, whereby the definition of "bulk supply" has been amended. The term "commercial consumer" having been deleted, the term bulk supply is confined only to industrial and mining consumers who are supplied with high tension voltage supply services for their respective premises. Learned counsel has also produced a copy of the Gazette Notification of the aforesaid Notification18.06.2012. Rules S.O. 4 dated 18.06.2012 amending rule 2 clause (ba) reads as under:-

2(ba). "bulk supply" means, supply of energy to such industrial and mining consumers who are supplied with the high tensions voltage supply services for their respective premises."

8. The learned counsel for the petitioner has also submitted that even in the counter affidavit filed by the respondents, they have referred to the amendment in rule dated 08.10.2011 and the definition of bulk supply thereunder, and have totally ignored the subsequent amendment in rule dated 18.06.2012, which reflects that the Authority who passed the order was either not aware or has totally ignored the amendment dated 18.06.2012. Learned counsel submits that on this short point, the writ petitions may be disposed of as the entire basis for passing the impugned order by ignoring the notification dated 18.06.2012 and treating the petitioner as a consumer of bulk supply of electricity, is ex-facie perverse and suffers from wrongful assumption of jurisdiction calling for interference in writ jurisdiction. The learned counsel submits that in the present writ petitions, the liability of the petitioner under any other provision of the Electricity Duty Act is not involved.

9. Learned counsel appearing on behalf of the State as well as JBVNL while defending the impugned order have submitted that the petitioner never appeared before the Authority and having not appeared before the Authority, ex-parte orders were passed and there is alternative remedy of appeal against the impugned orders of assessment. However, during the course of hearing, they could not dispute that the Authorities are supposed to suo moto apply the provisions of law and mere non-appearance of the petitioner cannot be a reason to ignore the aforesaid amendment in the definition of "Bulk Supply", as amended in the year 2012. However, it is not in dispute that the term "bulk supply" as per the definition as amended in the year 2012 in confined to industrial and mining consumers.

10.During the course of argument, the learned counsel for the respondents have been confronted with the specific question as to how the petitioner has been booked by the term recipient of bulk supply of electricity, but they were not in a position to satisfy this court particularly with reference to the subsequent amendment in the rules vide SO 4 dated 18.06.2012. It is also not in dispute that even in the counter affidavit, the respondents have referred to the Rules of 2011 and there is no reference to the Rule of 2012 whereby the definition of bulk supply has been amended and the term commercial consumer has been deleted in the year 2012. Learned counsel has submitted that although the impugned orders have been passed treating the petitioner as receiver of bulk supply of electricity, but the petitioner could be liable to pay the electricity duty under other provisions of the Act and therefore the present writ petitions, at best, be confined only to point regarding treating the petitioner as receiver of bulk supply of electricity.

11.Learned counsel for the petitioner in response to the argument of the respondent of alternative remedy has referred to the recent judgment passed by the Hon'ble Supreme Court reported in 2021 SCC Online SC 801 (Magadh Sugar & Energy Ltd. versus State of Bihar and others) and has referred to para 25,26, and 27 to submit that the Authority by the impugned order has assumed jurisdiction which they do not possess by treating the petitioner as

a consumer of bulk supply of electricity and accordingly the present writ petitions be decided on the basis of the reasons for assumption of jurisdiction which has been given in the impugned judgment which is ex-facie perverse and in total disregard to the amended rules of 2012 amending the definition of bulk supply of electricity.

Findings of this court

12.The point raised by the learned senior counsel for the petitioner in all these cases is a pure question of law touching upon the very jurisdiction of the assessing authority to treat the petitioner as a consumer of bulk supply of electricity and consequently impose electricity duty upon the petitioner and also impose penalty on account of not getting itself registered under the provisions of the Jharkhand Electricity Duty Act and the Rules framed thereunder. The aforesaid foundational fact that the petitioner is a commercial consumer of electricity in his shopping complex is not in dispute.

13.In view of the aforesaid circumstances, and considering the aforesaid judgement passed by the Hon'ble Supreme court in the case reported in 2021 SCC Online SC 801 (Magadh Sugar & Energy Ltd. versus State of Bihar and others) para 25 to 27 , the present writ petitions need not be dismissed on the grounds of alternative remedy, as pure question of jurisdiction is involved in these cases. Para 25 to 27 of the aforesaid judgement are quoted for ready reference:-

25. While a High Court would normally not exercise its writ jurisdiction under Article 226 of the Constitution if an effective and efficacious alternate remedy is available, the existence of an alternate remedy does not by itself bar the High Court from exercising its jurisdiction in certain contingencies. This Principle has been crystallized by this court in Whirpool Corporation v. Registrate of Trademarks, Mumbai and Harbanslal Sahni v. Indian Oil Corporation Ltd.. Recently, in Radha Krishan Industries v. State of Himachal Pradesh & Ors a two judge Bench of this Court of which one of us was a part of (Justice DY Chandrachud) has summarized the principles governing the exercise of writ jurisdiction by the High Court in the presence of an alternate remedy. This Court has observed:

28. The principles of law which emerge are that:

(i) The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well;

(ii) The High Court has the discretion not to entertain a writ petition. One of the restrictions placed on the power of the High Court is where an effective alternate remedy is available to the aggrieved person;

(iii) Exceptions to the rule of alternate remedy arise where (a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution ; (b) there has been a violation of the principles of natural justice ; (c) the order or proceedings are wholly without jurisdiction; or (d) the vires of a legislation is challenged;

(iv) An alternate remedy by itself does not divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though a ordinarily, a writ petition should be entertained when an efficacious alternate remedy is provided by law;

(v) When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion; and (vi) In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with."

(emphasis supplied)

26. The principle of alternate remedies and its exceptions was also reiterated recently in the decision in Assistant Commissioner of State

Tax v. M/s Commercial Steel Limited . In State of HP v. Gujarat

Ambuja Cement Ltd this Court has held that a writ petition is maintainable before the High Court if the taxing authorities have acted beyond the scope of their jurisdiction. This Court observed: "23. Where under a statute there is an allegation of infringement of fundamental rights or when on the undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess can be the grounds on which the writ petitions can be entertained. But normally, the High Court should not entertain writ petitions unless it is shown that there is something more in a case, something going to the root of the jurisdiction of the officer, something which would show that it would be a case of palpable injustice to the writ petitioner to force him to adopt the remedies provided by the statute. It was noted by this Court in L. Hirday Narain v. ITO [(1970) 2 SCC 355: AIR 1971 SC 33] that if the High Court had entertained a petition despite availability of alternative remedy and heard the parties on merits it would be ordinarily unjustifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies; unless the High Court finds that factual disputes are involved and it would not be desirable to deal with them in a writ petition."

27. The above principle was reiterated by a three-judge Bench of

this Court in Executive Engineer v. Seetaram Rice Mill . In that case, a show cause notice/provisional assessment order was issued to the assessee on the ground of an unauthorized use of electricity under Section 126 (1) of the Electricity Act 2003 and a demand for payment of electricity charges was raised. The assessee contended that Section 126 was not applicable to it and challenged the jurisdiction of the taxing authorities to issue such a notice, before the High Court in its writ jurisdiction. The High Court entertained the writ petition.

When the judgement of the High Court was appealed before this Court, it held that the High Court did not commit any error in exercising its jurisdiction in respect of the challenge raised on the jurisdiction of the revenue authorities. This Court made the following observations:

"81. Should the courts determine on merits of the case or should they preferably answer the preliminary issue or jurisdictional issue arising in the facts of the case and remit the matter for consideration on merits by the competent authority? Again, it is somewhat difficult to state with absolute clarity any principle governing such exercise of jurisdiction. It always will depend upon the facts of a given case. We are of the considered view that interest of administration of justice shall be better subserved if the cases of the present kind are heard by the courts only where they involve primary questions of jurisdiction or the matters which go to the very root of jurisdiction and where the authorities have acted beyond the provisions of the Act.

82. It is argued and to some extent correctly that the High Court should not decline to exercise its jurisdiction merely for the reason that there is a statutory alternative remedy available even when the case falls in the above stated class of cases. It is a settled principle that the courts/tribunal will not exercise jurisdiction in futility. The law will not itself attempt to do an act which would be vain, lex nil frustra facit, nor to enforce one which would be frivolous--lex neminem cogit ad vana seu inutilia--the law will not force anyone to do a thing vain and fruitless. In other words, if exercise of jurisdiction by the tribunal ex facie appears to be an exercise of jurisdiction in futility for any of the stated reasons, then it will be permissible for the High Court to interfere in exercise of its jurisdiction. This issue is no longer res integra and has been settled by a catena of judgments of this Court, which we find entirely unnecessary to refer to in detail..."

(emphasis supplied)

14.After hearing the learned counsel for the parties and considering the impugned orders of assessment passed by the Authority in all the cases, this court finds that the sole ground on which the impugned assessment orders have been passed is by treating the petitioner as receiver of bulk supply of electricity from JBVNL and on this basis, it has been alleged that the petitioner has not got itself registered under the provisions of Jharkhand Electricity Duty Act and the Rules framed thereunder and consequential assessment orders raising demands of electricity duty and penalty have been passed.

15.It is not in dispute that the petitioner is receiving electricity from JBVNL with respect to its Market (Shopping) Complex at Deoghar under high tension Tariff and is neither an industrial consumer nor a mining consumer but is a commercial consumer.

16.This court finds that the term 'bulk supply' was defined vide

Notification dated 08.10.2011, wherein the supply to industrial units, mines or commercial consumers under high tension energy connection were treated to be "bulk supply", but the definition of "bulk supply" was amended vide Notification No. S O 4 dated 18.06.2012 and the term "commercial consumer" stood deleted and consequently , the term "bulk supply" was confined to energy supplied to industrial units and consumers engaged in mining. Admittedly, the petitioner is neither an industrial consumer, nor a mining consumer.

17.The impugned orders of assessment in all the cases have been passed by treating the petitioner as a consumer of bulk supply of electricity . The respondents have failed to satisfy this court as to how the petitioner can be treated as a consumer of bulk supply of electricity on the face of the amended definition of "bulk supply" under notification No. SO 4 dated, 18.06.2012.

18.The impugned orders of assessment having been passed by treating the petitioner as a consumer of bulk supply of electricity is ex- facie perverse and has been passed in total disregard to the amended definition of "bulk supply" vide notification No. SO 4 dated, 18.06.2012. Consequently, the impugned orders of assessment suffer from wrongful assumption of jurisdiction by the assessing authority. It is also important to note that the counter affidavit filed in the present relies upon the definition of "bulk supply" as introduced in the rules vide aforesaid Notification dated 08.10.2011 and ignores the amended definition of "bulk supply" which stood amended by virtue of aforesaid notification dated 18.06.2012 whereby commercial consumers were omitted.

19.In the aforesaid facts and circumstances, the impugned order cannot be sustained in the eyes of law, as the petitioner cannot be treated as a consumer of bulk supply of electricity.

20. Accordingly, the impugned assessment orders as well as demand notices arising therefrom, which has been passed by treating the petitioner as a consumer of bulk supply of electricity are hereby set aside. Consequently, the subsequent actions taken by the respondents, including impugned orders of attachment of bank account of the petitioner are also set aside.

21.However, it is observed that this judgement is confined to the impugned action and consequent orders passed by the respondents assessing authority treating the petitioner as a consumer of bulk supply of electricity and is not a pronouncement on any other legal aspect which may otherwise bring the petitioner under any liability to get itself registered and pay electricity duty under any other provision of the Jharkhand electricity duty Act and the rules framed thereunder and in such circumstances , it will be open to the respondents to proceed against the petitioner as per law.

22. All pending I.A.s stands closed.

23.These writ petitions are allowed with the aforesaid observation.

(Aparesh Kumar Singh, J.)

(Anubha Rawat Choudhary, J.) Binit/