[Cites 64, Cited by 0]
Jharkhand High Court
M/S. Pali Hill Breweries Private ... vs The State Of Jharkhand on 5 January, 2026
Author: Rajesh Shankar
Bench: Rajesh Shankar
2026:JHHC:39-DB
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(T) No.3228 of 2021
-----
M/s. Pali Hill Breweries Private Limited, a company incorporated
under the Indian Companies Act, 1956, having its registered office
at Ground Floor, Mandaliya Nagar, Bariatu Road, Ranchi through
its Director and authorized signatory Mr. Manoj Kumar Sahu, son
of Late Ambika Prasad Sahu, resident of 78B Burdwan Compound,
P.O. and P.S. Lalpur, Town and District-Ranchi, Jharkhand-
834001.
..........Petitioner.
-Versus-
1. The State of Jharkhand.
2. Secretary-cum-Commissioner, State Tax Department, Government
of Jharkhand, Project Building, Dhurwa, P.O. and P.S.
Jagannathpur, District-Ranchi.
3. Jharkhand Bijli Vitran Nigam Limited, through its Managing
Director, having its office at Engineers' Bhawan, Dhurwa, P.O. and
P.S. Jagannathpur, District-Ranchi.
........... Respondents.
-----
With
W.P.(T) No. 3374 of 2021
-----
M/s Brahmaputra Metallics Limited, a company incorporated under
the Indian Companies Act, 1956, having its administrative office
at 401, Commerce Tower, Opp. GEL Church Complex, Main Road,
P.O.-G.P.O., P.S.-Hindpiri, Ranchi-834001, Jharkhand, and its
works at Village Kamta, Block-Gola, P.O. and P.S.-Gola, District-
Ramgarh, through its Director and authorised signatory Mr. Aarsh
Sahu, son of Kumud Prasad Sahu, aged about 39 years, resident
of 80, Burdwan Compound, P.O. and P.S.-Lalpur, Town and
District-Ranchi-834001, Jharkhand.
..........Petitioner
Versus
1. State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government
of Jharkhand, Project Building, Dhurwa, P.O. and P.S.-
Jagannathpur, District-Ranchi, Jharkhand-834001.
3. Joint Commissioner of State Tax (Administration), Hazaribagh
Division, Hazaribagh, P.O. and P.S.-Hazaribagh, District-
Hazaribagh.
4. Deputy Commissioner of State Tax, Ramgarh Circle, Ramgarh,
P.O. and P.S. Ramgarh, District-Ramgarh.
5. Assistant Commissioner of State Tax, Ramgarh Circle, Ramgarh,
P.O. and P.S.-Ramgarh, District-Ramgarh.
........... Respondents
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-----
With
W.P.(T) No. 3499 of 2021
-----
M/s Ramkrishna Forgings Limited, a company incorporated under
the Indian Companies Act, 1956, having its registered office at 23,
Circus Avenue, 9th Floor, P.O. and P.S.-Circus Avenue, District-
Kolkata, Kolkata-700017, West Bengal, and having its
administrative office at Plot No. M-15, 16 and NS-26, Phase VII,
Industrial Area, Adityapur, P.O. and P.S.-Adityapur, District-
Saraikela-Kharsawan, Jharkhand-832109, through its Vice-
President (Finance) and authorised signatory, Mr. Rahul Kumar
Bagaria, son of Bishnu Binod Bagaria, aged about 43 years,
resident of Aditya Syndicate, 326C, Block-3, Adityapur-II, Post
Office-R.I.T., District-Saraikela-Kharsawan, Jharkhand-831014.
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government
of Jharkhand, Project Building, Dhurwa, P.O. and P.S.-
Jagannathpur, District-Ranchi, Jharkhand-834001.
3. Jharkhand Bijli Vitran Nigam Limited through its Managing
Director, having its office at Engineers' Bhawan, Dhurwa, P.O. and
P.S.-Jagannathpur, District-Ranchi, Jharkhand-834 004.
4. Tata Steel Utilities and Infrastructure Services Limited (formerly
known as Jamshedpur Utilities and Services Company
Limited/JUSCO), through its Managing Director, having its office
at Sakchi Boulevard Road, Northern Town, Bistupur, P.O. and P.S.-
Bistupur, Town-Jamshedpur, District-East Singhbhum, Jharkhand-
831001.
........... Respondents
-----
With
W.P.(T) No. 3734 of 2021
-----
1. M/s RSB Transmissions (India) Limited, a company incorporated
under the Indian Companies Act, 1956, having its administrative
office at Plot No. NS-14(P), 15 to 26, Phase-6, & Phase-7, & Ward
No. 7, Adityapur Industrial Area, Gamharia, Town-Jamshedpur,
P.O. and P.S.-Adityapur, District-Saraikela-Kharsawan, Jharkhand-
832108, through its Assistant General Manager, Mr. S.M.
Nausherwan, son of SM Jalaluddin (Late), aged about 54 years,
resident of Gulab Bagh Colony Phase-1, Pardih Road, P.O. and
P.S.-Mango, Jamshedpur, District-East Singhbhum, Jharkhand
831012.
..........Petitioner
Versus
2
2026:JHHC:39-DB
1. State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department,
Government of Jharkhand, Project Building, Dhurwa, P.O. and
P.S.-Jagannathpur, District-Ranchi, Jharkhand-834001.
3. Tata Steel Utilities and Infrastructure Services Limited (formerly
known as Jamshedpur Utilities and Services Company
Limited/JUSCO), through its Managing Director, having its office
at Sakchi Boulevard Road, Northern Town, Bistupur, P.O. and P.S.-
Bistupur, Town-Jamshedpur, District-East Singhbhum, Jharkhand-
831001.
..........Respondents
-----
With
W.P.(T) No. 3829 of 2021
-----
1. M/s RSB Transmissions (India) Limited, a company incorporated
under the Indian Companies Act, 1956, having its administrative
office at Plot No. NS-14(P), 15 to 26, Phase-6, & Phase-7, & Ward
No. 7, Adityapur Industrial Area, Gamharia, Town-Jamshedpur, P.O.
and P.S.-Adityapur, District-Saraikela-Kharsawan, Jharkhand-832
108, through its Assistant General Manager, Mr. S.M. Nausherwan,
son of SM Jalaluddin (Late), aged about 54 years, resident of Gulab
Bagh Colony Phase-1, Pardih Road, P.O. and P.S.-Mango,
Jamshedpur, District-East Singhbhum, Jharkhand 831012.
..........Petitioner
Versus
1. State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. and P.S.-Jagannathpur,
District-Ranchi, Jharkhand-834001.
3. Jharkhand Bijli Vitran Nigam Limited through its Managing Director,
having its office at Engineers' Bhawan, Dhurwa, P.O. and P.S.-
Jagannathpur, District-Ranchi.
..........Respondents
-----
With
W.P.(T) No. 4035 of 2021
-----
1. M/s. Usha Martin Limited, a company incorporated under the Indian
Companies Act, 1956, having its registered office at 2A, Shakespeare
Sarani, 'Mangal Kalash', P.O. and P.S.-Shakespeare Sarani, District-
Kolkata, West Bengal-700071, and having its works at Tatisilwai, P.O.
and P.S.-Tatisilwai, District-Ranchi, PIN Code-835 103, through its
Assistant Vice President, Mr. Nand Kishore Patodia, aged about 70
years, son of Late Ramdeo Patodia, resident of Deputy Para, P.O. and
P.S.-Lalpur, District-Ranchi, PIN-834001.
..........Petitioner
3
2026:JHHC:39-DB
Versus
1. State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. and P.S.-Jagannathpur,
District-Ranchi, Jharkhand-834001.
3. Joint Commissioner of State Tax (Administration), Ranchi Division,
having its office at Commercial Taxes Department, Court Compound,
P.O.-Kutchery, P.S.-Kotwali, District-Ranchi, 834001.
4. Deputy Commissioner of State Tax, South Circle, Ranchi, having its
office at Commercial Taxes Department, Court Compound, P.O.-
Kutchery, P.S.-Kotwali, District-Ranchi, 834001.
5. Assistant Commissioner of State Tax, South Circle, Ranchi, having its
office at Commercial Taxes Department, Court Compound, P.O.-
Kutchery, P.S.-Kotwali, Ditrict-Ranchi, 834001.
..........Respondents
-----
With
W.P.(T) No. 4077 of 2021
-----
1. M/s. BMW Industries Limited, a company incorporated under the
Indian Companies Act, 1956 having its registered Office at 119, 3 rd
Floor, Park Street, White House, Kolkata, West Bengal-700 016 and
having its administrative office at M-1, Large Sector, Gamharia,
Saraikela-Kharsawan Industrial Area, P.O. and P.S.-Gamharia,
District-Saraikela-Kharsawan, Jharkhand-832108, through its
registered signatory Mr. Prahlad Kumar, son of Mewalal, aged about
51 years, resident of House No. 46, Sankosai, Road No. 3, Dimna
Road, Mango, P.O. and P.S.-Mango, Town-Jamshedpur, and District-
East Singhbhum, Pin Code-831012.
2. M/s BMW Iron & Steel Industries Limited, a company incorporated
under the Indian Companies Act, 1956 having its registered Office at
119, 3rd Floor, Park Street, White House, Kolkata West Bengal-700016
and having its administrative office at M-1, Large Sector, Gamharia,
District-Seraikela-Kharsawan, Jharkhand-832108, through their
authorised signatory Mr. Prahlad Kumar, son of Mewalal, aged about
51 years, resident of House No. 46, Sankosai, Road No. 3, Dimna
Road, Mango, P.O. and P.S.-Mango, Town-Jamshedpur, and District-
East Singhbhum, PIN Code-831012.
3. M/s. Nippon Cryo Pvt. Ltd., a company incorporated under the Indian
Companies Act, 1956 having its registered Office at Plot No. 2, Large
Sector, Adityapur Industrial Area, Tata Kandra Main Road, Adityapur,
Jamshedpur, District-Saraikela-Kharsawan, Jharkhand-832108,
through their authorized signatory Mr. Prahlad Kumar, son of
Mewalal, aged about 51 years, resident of House No. 46, Sankosai,
Road No. 3, Dimna Road, Mango, P.O. and P.S.-Mango, Town-
Jamshedpur, and District-East Singhbhum, Pin Code-831012.
4
2026:JHHC:39-DB
..........Petitioners
Versus
1. State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government
of Jharkhand, Project Building, Dhurwa, P.O. and P.S.-Jagannathpur,
District-Ranchi, Jharkhand-834001.
3. Tata Steel Utilities and Infrastructure Services Limited (formerly
known as Jamshedpur Utilities and Services Company
Limited/JUSCO), through its Managing Director, having its office at
Sakchi Boulevard Road, Northern Town, Bistupur, P.O. and P.S.-
Bistupur, Town-Jamshedpur, District-East Singhbhum, Jharkhand-
831001.
........... Respondents
-----
With
W.P.(T) No. 4108 of 2021
-----
M/s Rungta Mines Limited, a Company registered under the Indian
Companies Act, 2013, having its Corporate Office at Rungta House,
Chaibasa, P.O. and P.S.-Chaibasa, District-West Singhbhum through
its Authorised Signatory namely, Sakaldev Kumar, aged about 57
years, son of Late Ayodhya Kumar, resident of E-2, Panchwati Nagar,
Sonari, Jamshedpur, P.O. and P.S. Sonari, East Singhbhum
(Jharkhand), PIN-831011.
..........Petitioner
Versus
1. The State of Jharkhand, through its Secretary-cum-Commissioner,
Commercial Taxes Department, Government of Jharkhand, Project
Building, Dhurwa, P.O. and P.S. Jagannathpur, District-Ranchi,
834001.
2. The Joint Commissioner of Commercial Taxes and Goods and Services
Tax (Administration), Head Quarters having its office at Project
Building, Dhurwa, P.O. and P.S.-Jagannathpur, District-Ranchi,
834001.
3. The Joint Commissioner of Commercial Taxes and Goods and Services
Tax (Administration), Jamshedpur Division, having its office at
Sakchi, P.O. and P.S. Sakchi, Jamshedpur, District-East Singhbhum,
831001.
4. The Deputy Commissioner of Commercial Taxes and Goods and
Services Tax, Chaibasa Circle, having its office at Chaibasa, P.O. &
P.S. Chaibasa, District-West Singhbhum, 833201.
........... Respondents
-----
With
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2026:JHHC:39-DB
W.P.(T) No. 4968 of 2021
-----
Association of DVC HT Consumers of Jharkhand through its President
Mr. Hari Krishna Budhia, S/o Late Shri R.K. Budhia, aged about 76
years, R/o Dipatoli, P.O.-Sadar, P.S.-Sadar, District-Ranchi,
Jharkhand and having its office at Kalyani Apartment, 1 st Floor,
Gandhi Chowk, P.O. & P.S. Giridih, District-Giridih, Jharkhand.
..........Petitioner
Versus
1. State of Jharkhand, through Chief Secretary, Government of
Jharkhand, Project Building, Dhurwa, P.O.-Dhurwa, P.S.-
Jagannathpur, District-Ranchi, Jharkhand.
2. The Principal Secretary, Law Department, Government of Jharkhand,
Project Building, Dhurwa, P.O.-Dhurwa, P.S.-Jaganathpur, District-
Ranchi, Jharkhand.
3. The Secretary - cum - Commissioner, State Tax Department,
Government of Jharkhand, Project Building, Dhurwa, P.O.-Dhurwa,
P.S.-Jagannathpur, District-Ranchi, Jharkhand.
4. Damodar Valley Corporation through its Chairman having its
registered office at DVC Towers, VIP Road, Kolkata, West Bengal and
also having its office at Damodar Valley Corporation Sub-Station,
GOMD-V, Ramgarh, P.O.+P.S.-Ramgarh, Dist.-Ramgarh, Jharkhand.
........... Respondents
-----
With
W.P.(T) No. 5429 of 2021
-----
M/s ESL Steel Limited (earlier known as Electrosteel Steels Limited),
a company registered under the Companies Act, 1956, having its
registered office at 801, Uma Shanti Apartments, Kanke Road,
Ranchi, P.O. Kanke, P.S. Gonda, District Ranchi and its Principal place
of business at Vill.-Siyaljori, P.O. Jogidih, opp-Bangaria, P.S.
Chandankiary, Bokaro, through its Deputy General Manager
(Accounts) Rajesh Kumar Pandey, aged about 50 years, Son of Late
Shambhu Pandey, Resident of Vastu Vihar-4, Phase-2, Road No. 5,
P.O. Chas, P.S. Chas, District Bokaro-827013.
..........Petitioner
Versus
1. The State of Jharkhand, through its Secretary-cum-Commissioner,
Commercial Taxes Department, Government of Jharkhand, having its
Office at Project Building, Dhurwa, P.O. and P.S.-Jagannathpur,
District-Ranchi, 834001.
2. Joint Commissioner of State Tax (Administration), Dhanbad Division,
Dhanbad, having its office at Commercial Taxes Building, Court
Compound, Dhanbad, P.O., P.S. & District-Dhanbad.
6
2026:JHHC:39-DB
3. Deputy Commissioner of State Tax, Bokaro Circle, Bokaro having its
office at Commercial Taxes Building, Court Compound, Bokaro, P.O.
& P.S. Bokaro Steel City, District-Bokaro.
........... Respondents
-----
With
W.P.(T) No. 120 of 2022
-----
M/s. Narayani Fuels Private Limited, a company incorporated under
the Indian Companies Act, 1956 having its registered office at 6/C,
Embassy Building, Theatre Road, Kolkata, West Bengal-700004 and
plant at Plot No. D-165, Kandra Industrial Area, Govindpur, District-
Dhanbad, through its Director Shri Satyabrat Sahay, aged about 29
years, son of Amarendra Kumar Sahay, resident of Savitri Bhavan,
Near Jagrit Mandir, Chiragora, Shamshan Road, Hirapur, P.O. and
P.S. Hirapur, Dhanbad, Jharkhand-826001.
..........Petitioner
Versus
1. State of Jharkhand, through the Secretary, Finance Department,
Govt. of Jharkhand, Ranchi, Project Building, Dhurwa, P.O. Dhurwa,
P.S.-Jagannathpur, District-Ranchi, Jharkhand 834001.
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O.-Dhurwa, P.S.-
Jaganathpur, District-Ranchi, Jharkhand-834001.
3. Damodar Valley Corporation, through its Chief Engineer (Commercial)
DVC Tower, VIP Road, Kolkata, P.O. and P.S.-Airport Road, District-
Kolkata, West Bengal-700054.
........... Respondents
-----
With
W.P.(T) No. 409 of 2022
-----
M/s. BMC Metalcast Private Limited, a company incorporated under
the Indian Companies Act, 1956, having its principal place of business
at A-18, 19, Phase-2, Adityapur Industrial Area, Adityapur, Seraikela-
Kharsawan, P.O. & P.S.-Adityapur, District-Jamshedpur-832108
through its Director and authorised signatory Mr. Deepak Dokania,
aged about 58 years, son of Dr. M Ram, resident of C/o BMC
Metalcast Pvt. Ltd., A-18, 19, Industrial Area, P.O. & P.S.-Adityapur,
District-Jamshedpur, Jharkhand-832108.
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S.-Jaganathpur,
District-Ranchi, Jharkhand-834004.
7
2026:JHHC:39-DB
3. Tata Steel Utilities and Infrastructure Services Limited (earlier known
as Jamshedpur Utilities and Services Company Limited), a Company
incorporated under the Companies Act, 1956 through its Managing
Director, having its registered office at Sakchi, Boulevard Road,
Northern Town, Bistupur, P.O. & P.S. Bistupur, District-Jamshedpur-
831001.
........... Respondents
-----
With
W.P.(T) No. 411 of 2022
-----
M/s. ASL Enterprises Limited, a company incorporated under the
Indian Companies Act, 1956 having its principal place of business at
M-9, 15 & 16, Phase-VI, Adityapur, Seraikela-Kharsawan, BECO More,
Gamharia, P.O. & P.S.-Adityapur, District-Jamshedpur, through one
of its Directors Mr. Ankit Goyal, aged about 35 years, son of Dilip
Kumar Goyal, resident of 2, Circuit House Area (East), Near XLRI,
Bistupur, P.O. & P.S.-Bistupur, District-Jamshedpur-831001.
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S.-Jaganathpur,
District-Ranchi, Jharkhand-834004.
3. Tata Steel Utilities and Infrastructure Services Limited (earlier known
as Jamshedpur Utilities and Services Company Limited), a Company
incorporated under the Companies Act, 1956 through its Managing
Director, having its registered office at Sakchi, Boulevard Road,
Northern Town, Bistupur, P.O. & P.S. Bistupur, District-Jamshedpur-
831001.
........... Respondents
-----
With
W.P.(T) No. 433 of 2022
-----
Amalgam Steel & Power Limited, (Formerly known as 'Adhunik Alloys
& Power Limited') having its registered office at Avani Signaturer, 4th
Floor, Unit 401A, 91A/1, Park Street, P.O. Park Street, P.S. Park
Street, District Kolkata (West Bengal) through its authorised
signatory, namely, Niraj Kumar Gupta, aged about 45 years, son of
Lae Prof, J.K. Gupta, resident of Shanti Kutir, Shukla Colony, Hinoo,
District Ranchi.
..........Petitioner
Versus
1. State of Jharkhand through Chief Secretary, Government of
Jharkhand, Project Building, Dhurwa, P.O. Dhurwa, P.S.
Jagannathpur, District-Ranchi, Jharkhand.
8
2026:JHHC:39-DB
2. The Principal Secretary, Law Department, Government of Jharkhand,
Project Building, Dhurwa, P.O.-Dhurwa, P.S.-Jaganathpur, District-
Ranchi, Jharkhand.
3. The Secretary-cum-Commissioner, Commercial Tax Department,
Government of Jharkhand, Project Building, Dhurwa, P.O.-Dhurwa,
P.S.-Jaganathpur, District-Ranchi, Jharkhand.
........... Respondents
-----
With
W.P.(T) No. 434 of 2022
-----
M/s Eefco Metals & Powders Private Limited (Unit-1), a company
incorporated under the Indian Companies Act, 1956, having its
principal place of business at Phase-1, A-16, Industrial Area,
Jamshedpur, Saraikela-Kharsawan, through its Director and
authorised signatory Mr. Rajesh Kumar, aged about 58 years son of
Late G.S. Rao, resident of D-114, Vijaya Heritage, Kadma, P.O. &
P.S.-Kadma, District-Jamshedpur, Jharkhand-831005.
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S.-Jagannathpur,
District-Ranchi-834004.
3. Tata Steel Utilities and Infrastructure Services Limited (earlier known
as Jamshedpur Utilities and Services Company Limited), a Company
incorporated under the Companies Act, 1956 through its Managing
Director, having its registered office at Sakchi, Boulevard Road,
Northern Town, Bistupur, P.O. & P.S.-Bistupur, District-Jamshedpur-
831001.
........... Respondents
-----
With
W.P.(T) No. 435 of 2022
-----
M/s Eefco Metals & Powders Private Limited (Unit-II), a company
incorporated under the Indian Companies Act, 1956, having its
principal place of business at Phase-3, Industrial Area, P.O. & P.S.-
Adityapur, District-Jamshedpur, through its Director and authorised
signatory Mr. Rajesh Kumar, aged about 58 years, son of Late G.S.
Rao, resident of D-114, Vijaya Heritage, Kadma, P.O. & P.S.-Kadma,
District-Jamshedpur, Jharkhand-831005.
..........Petitioner
Versus
1. The State of Jharkhand
9
2026:JHHC:39-DB
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S.-Jagannathpur,
District-Ranchi-834004.
3. Jharkhand Bijli Vitran Nigam Limited., a government of Jharkhand
undertaking through its Managing Director, having its office at
Engineers' Bhawan, Dhurwa, P.O. & P.S.-Jagannathpur, District-
Ranchi.
........... Respondents
-----
With
W.P.(T) No. 436 of 2022
-----
M/s BMC Ferrocaste Private Limited, a company incorporated under
the Indian Companies Act, 1956, having its principal place of business
at M-35, Phase-IV, Industrial Area, Adityapur, Saraikela-Kharsawan,
P.O. & P.S.-Adityapur, District-Jamshedpur-832108 through its
Director and authorised signatory Mr. Deepak Dokania, aged about
58 years, son of Dr. M Ram, resident of C/o-BMC Metalcast Pvt. Ltd.,
A-18, 19, Industrial Area, P.O. & P.S.-Adityapur, District-Jamshedpur,
Jharkhand-832108.
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S.-Jagannathpur,
District-Ranchi-834004.
3. Tata Steel Utilities and Infrastructure Services Limited (earlier known
as Jamshedpur Utilities and Services Company Limited), a Company
incorporated under the Companies Act, 1956 through its Managing
Director, having its registered office at Sakchi, Boulevard Road,
Northern Town, Bistupur, P.O. & P.S.-Bistupur, District-Jamshedpur-
831001.
........... Respondents
-----
With
W.P.(T) No. 437 of 2022
-----
M/s Highco Engineers Private Limited (Unit-1) a company
incorporated under the Indian Companies Act, 1956, having its
principal place of business at Phase-1, B-23 & 25, Industrial Area,
Adityapur, P.O. & P.S.-Adityapur, Jamshedpur, Saraikela-Kharsawan-
832109, through its one of the Directors, Mr. Rajiv Ranjan, age 51
years, son of Birendra Kumar Singh, resident of Flat No.-3412, Phase-
6, Vijaya Heritage Kadma, P.O. & P.S.-Kadma, District-Jamshedpur.
..........Petitioner
Versus
1. The State of Jharkhand
10
2026:JHHC:39-DB
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S.-Jagannathpur,
District-Ranchi-834004.
3. Tata Steel Utilities and Infrastructure Services Limited (earlier known
as Jamshedpur Utilities and Services Company Limited), a Company
incorporated under the Companies Act, 1956 through its Managing
Director, having its registered office at Sakchi, Boulevard Road,
Northern Town, Bistupur, P.O. & P.S.-Bistupur, District-Jamshedpur-
831001.
........... Respondents
-----
With
W.P.(T) No. 447 of 2022
-----
M/s Highco Engineers Private Limited (Unit-II) a company
incorporated under the Indian Companies Act, 1956, having its
principal place of business at G-7/8, Phase-I, Adityapur Industrial
Area, Adityapur, P.O. & P.S.-Adityapur, Jamshedpur, Saraikela-
Kharsawan-832109, through its one of the Directors, Mr. Tapas
Kumar Sahu, aged about 44 years, son of Anirudha Kumar Sahu,
resident of Flat No. 3513, Satmala, 6th Phase, Marine Drive, Kadma,
P.O. & P.S.-Kadma, Jamshedpur-831005.
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S.-Jagannathpur,
District-Ranchi-834004.
3. Tata Steel Utilities and Infrastructure Services Limited (earlier known
as Jamshedpur Utilities and Services Company Limited), a Company
incorporated under the Companies Act, 1956 through its Managing
Director, having its registered office at Sakchi, Boulevard Road,
Northern Town, Bistupur, P.O. & P.S.-Bistupur, District-Jamshedpur-
831001.
........... Respondents
-----
With
W.P.(T) No. 454 of 2022
-----
M/s Sai Sponge (India) Private Limited, a Company incorporated
under the Indian Companies Act, 1956, having its principal place of
business at Nawagaon, Jhinkpani, P.O. & P.S.-Jhinkpani, District-
Jamshedpur-833215 through its Director and authorised signatory
Mr. P Niraj Kumar Sandwar, aged about 54 years, son of Uday Kishore
Sandwar, resident of House No. 30, Kirsna Bihar, Road No. 3, Railway
Co-operative Colony, Barda Ghat P.O. & P.S.-Baghbera, District-
Jamshedpur, Jharkhand-831002.
11
2026:JHHC:39-DB
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S. Jagannathpur,
District-Ranchi-834004.
3. Jharkhand Bijli Vitran Nigam Ltd., A Government of Jharkhand
undertaking, through its Managing Director, having its registered
office at Engineering Building, HEC, Dhurwa, P.O. & P.S.-Dhurwa,
Distrtict-Ranchi-834004.
........... Respondents
-----
With
W.P.(T) No. 552 of 2022
-----
M/s Ami Enterprises Private Limited, a company incorporated under
the Indian Companies Act, 1956, having its principal place of business
at C-68, Phase-2, Adityapur Industrial Area, Adityapur, P.O. and P.S.-
Adityapur, Jamshedpur-832109 through its one of the Directors, Mr.
Chandrakant Zatakia, aged about 71 years, son of Shri Jagjivandas
Zatakia, resident of House No. 22, Road No. 3, Contractors Area, P.O.
and P.S.-Bistupur, Sakchi Bistupur, District-Jamshedpur-831001.
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. and P.S.-Jagannathpur,
District-Ranchi, Jharkhand-834004.
3. Tata Steel Utilities and Infrastructure Services Limited (earlier known
as Jamshedpur Utilities and Services Company Limited), a Company
incorporated under the Companies Act, 1956 through its Managing
Director, having its registered office at Sakchi, Boulevard Road,
Northern Town, Bistupur, P.O. and P.S.-Bistupur, District-
Jamshedpur-83 001.
..........Respondents
-----
With
W.P.(T) No.553 of 2022
-----
M/s Sai Electrocasting Private Limited, a Company incorporated under
the Indian Companies Act, 1956, having its registered office at
Premlata, 3rd Floor, 39, Shakespeare Sarani, P.O.-Circus Avenue,
P.S.-Shaakespeare Sarani, District-Kolkata and its place of business
at Addi Banglow Road, Jhumri Tilaiya, P.O. and P.S.-Jhumri Tilaiya,
District-Koderma, through its one of the Directors Mr. Kavi Yagnik,
aged about 44 years, son of B.S. Yagnik, resident of G-2, Radhika
12
2026:JHHC:39-DB
Apartment, Plot No. 16, Bhura Patel Marg, Near Shalimar Bagh,
Chitrakoot Marg, Heerapura, P.O. & P.S.-Heerapura, District-Jaipur,
Rajasthan-302021.
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S. Jagannathpur,
District-Ranchi-834004.
3. Damodar Valley Corporation, a statutory body established under the
Damodar Valley Corporation Act 1948, having its office at 9HR6 +
2CP, Banjhidih, Jai Nagar, CD Block, P.O.-Koderma Thermal Power
Station, P.S.-Jai Nagar, District-Koderma, through its Managing
Director, having its office at 9HR6 + 2CP, Banjhidih, Jai Nagar, CD
Block, P.O.-Koderma Thermal Power Station, P.S.-Jai Nagar, District-
Koderma, Jharkhand.
........... Respondents
-----
With
W.P.(T) No. 554 of 2022
-----
M/s Hari Om Casting Company Private Limited, a Company
incorporated under the Indian Companies Act, 1956, having its
principal place of business at 743/A, Large Scale Industrial Area,
Gamharia, P.O. & P.S. Gamharia, District-Jamshedpur-832108
through its one of the Directors, Mr. Harendra Tiwari, aged about 50
years, son of Shri Jagdish Tiwary, resident of House No. 404, Hariom
Nagar, Road No. 4, Near Shiv Mandir, Adityapur, P.O. & P.S.
Adityapur, District-Jamshedpur-831013.
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S. Jagannathpur,
District-Ranchi-834004.
3. Tata Steel Utilities and Infrastructure Services Limited (earlier known
as Jamshedpur Utilities and Services Company Limited), a Company
incorporated under the Companies Act, 1956 through its Managing
Director, having its registered office at Sakchi, Boulevard Road,
Northern Town, Bistupur, P.O. & P.S.-Bistupur, District-Jamshedpur-
831001.
........... Respondents
-----
13
2026:JHHC:39-DB
With
W.P.(T) No. 555 of 2022
-----
M/s Accropoly Metal Industries Private Limited, a company
incorporated under the Indian Companies Act, 1956, having its
principal place of business at M-10(P), 4th Phase, Adityapur Industrial
Area, Gamharia, P.O. & P.S.-Gamharia, District-Jamshedpur, through
its one of the Directors, Mr. Deepak Goyal, aged about 53 years, son
of Shri Prem Prakash Goyal, resident of House No. 18, Road No. 9,
Near S.B.I; XLRI Branch, Circuit House Area, East Jamshedpur,
Sakchi, Bistupur, P.O. & P.S.-Bistupur, District-Jamshedpur-831001.
..........Petitioner
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S. Jagannathpur,
District-Ranchi-834 004.
3. Tata Steel Utilities and Infrastructure Services Limited (earlier known
as Jamshedpur Utilities Services Company Limited), a Company
incorporated under the Companies Act, 1956 through its Managing
Director, having its registered office at Sakchi, Boulevard Road,
Northern Town, Bistupur, P.O. & P.S. Bistupur, District-Jamshedpur
831001.
........... Respondents
-----
With
W.P.(T) No. 687 of 2023
-----
1. Jharkhand Industries and Trade Association having its registered
office at Lal Kothi Complex, Bank More, Dhanbad, P.O., P.S. & District
Dhanbad through its General Secretary and authorized signatory
Rajiv Kumar Sharma, aged about 53 years, Son of Shri Radhey Shyam
Sharma, Resident of Lal Kothi Complex, Bank More, Dhanbad, P.O,
P.S. & District-Dhanbad.
2. Kumardubi Steels Pvt. Ltd., a company incorporated under the Indian
Companies Act, having its registered office at Plot No. 329/30, Rajura,
Near Krishna Kanta, P.O.-Kumardubi, P.S.-Dhanbad, District-
Dhanbad through its Director and authorized signatory Sushil Singh,
aged about 61 years, Son of Ranvijay Singh, Resident of Kumardhubi
Bazar, Shiblibari South, Panchamahli, P.O., P.S., & District-Dhanbad.
3. Ridhi Sidhi Iron Pvt. Ltd; a company incorporated under the Indian
Companies Act, having its registered office at Mouza-Sirpuria,
Nikutimore, P.O.-Birsinghpur, P.S.-Dhanbad, District-Dhanbad
through its Director and authorized signatory Birendra Roy, aged
about 68 years, Son of Chandeshwari Roy, Resident of Nandalal
School Road, 153 Chirkunda Nirsa cum Chirkunda, P.O., P.S., &
District Dhanbad.
14
2026:JHHC:39-DB
..........Petitioners
Versus
1. The State of Jharkhand
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S. Jagannathpur,
District-Ranchi-834001.
3. Damodar Valley Corporation through its Chairman having its
registered office at Commercial Department (1st Floor), DVC, DVC
Towers, VIP Road, P.O. Beleghata H.O., P.S. Maniktala, District-
Kolkata, PIN-700054.
........... Respondents
-----
With
W.P.(T) No. 5053 of 2024
-----
Hindalco Industries Limited, having its registered office at 21 st Floor,
One Unity Center, Senapati Bapat Marg, Prabhadevi, Mumbai-400013
(Maharashtra) through its authorized signatory, namely Navnit Kumar
Srivastava, aged about-58 years, Son of Sri Amarchand Srivastava,
resident of SE 133 ADM, Hindalco Colony, Renukoot, P.O. Renukoot,
P.S. Renukoot, District-Sonbhadra, State-Uttar Pradesh.
..........Petitioner
Versus
1. The State of Jharkhand, through Chief Secretary, Government of
Jharkhand, Project Building, Dhurwa, P.O. Dhurwa, P.S.-
Jagannathpur, District-Ranchi, Jharkhand.
2. The Principal Secretary, Law Department, Government of Jharkhand,
Project Building, Dhurwa, P.O.-Dhurwa, P.S.-Jaganathpur, District-
Ranchi, Jharkhand.
3. The Secretary-cum-Commissioner, Commercial Tax Department,
Government of Jharkhand, Project Building, Dhurwa, P.O.-Dhurwa,
P.S.-Jaganathpur, District-Ranchi, Jharkhand.
........... Respondents
-----
With
W.P.(T) No. 3795 of 2025
-----
La Opala RG Limited, having its registered office at ECO Centre EM
Block EM-4 Sector-5 Near Techno India 803 & 804 8th Floor Kolkata-
700091 through its Authorised Person namely, Prabhash Kumar, aged
about 57 years, son of Late Rohin Prasad Panjiyara, resident of Village
Nijhri, P.O.-Bharatsila, P.S.-Sambhuganj, Tola Khesar, District-
Deoghar-814112.
..........Petitioner
Versus
1. The State of Jharkhand
15
2026:JHHC:39-DB
2. Secretary-cum-Commissioner, State Tax Department, Government of
Jharkhand, Project Building, Dhurwa, P.O. & P.S. Jagannathpur,
District-Ranchi-834001.
3. Jharkhand Bijli Vitran Nigam Limited through its Managing Director,
having its office at Engineers' Bhawan, Dhurwa, P.O. and P.S.-
Jagannathpur, District-Ranchi.
........... Respondents
-----
CORAM : HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJESH SHANKAR
-----
For the Petitioners : Mr. M.S. Mittal, Sr. Advocate
Mr. Kavin Gulati, Sr. Advocate
Mr. Bharat Rai Chandani, Advocate
Mr. Salona Mittal, Advocate
Ms. Lavanya Gadodia Mittal, Advocate
Mr. Yashdeep Kanhai, Advocate
Ms. Divya Choudhary, Advocate
Miss Amrita Sinha, Advocate
Mrs. Shweta Suman, Advocate
Miss Pragunee Kashyap, Advocate
Mr. Indrajit Sinha, Advocate
Ms. Sweta Rani, Advocate
Mr. Ankit Vishal, Advocate
Mr. Deepak Kr. Sinha, Advocate
Mr. Vikas Pandey, Advocate
Mr. Omkar Sharma, Advocate
Mr. Piyush Poddar, Advocate
Mr. Janak Kumar Mishra, Advocate
For the State : Mr. Sachin Kumar, AAG-II
Mr. Gaurav Raj, AC to AAG-II
Mr. Srikant Swaroop, AC to AAG-II
Mr. Ashwini Bhushan, AC to Sr. SC-II
Mr. Gaurang Jajodia, AC to G.P.-II
For the DVC : Mr. Srijit Choudhary, Advocate
Mr. Sanjoy Piprawall, Advocate
Mr. Prince Kumar, Advocate
For the JUVNL : Mr. Ashok Kr. Yadav, S.C.
Mr. Aditya Kumar, Advocate
For the TSUISL : Mrs. Varsha Ramsisaria, Advocate
-----
Reserved on 15.12.2025 Pronounced On 05.01.2026
Per: Rajesh Shankar, J.
1. In the present batch of writ petitions, the petitioners have
challenged the vires and validity of Sections 2 and 3 of the
Jharkhand Electricity Duty (Amendment) Act, 2021 (Jharkhand Act
2026:JHHC:39-DB
No.05 of 2021) (hereinafter to be referred as 1st Amendment Act,
2021) notified in the Extraordinary Edition of Jharkhand Gazette
published by the Government of Jharkhand on 07.07.2021. The
petitioners have also challenged the vires of the Jharkhand
Electricity Duty (Amendment) Rules, 2021 (hereinafter referred as
the Rules, 2021) notified in the Extraordinary Edition of Jharkhand
Gazette published by the Government of Jharkhand on
01.04.2022. Some of the writ petitioners, who are the captive
consumers, have challenged the vires and validity of the
Jharkhand Electricity Duty (Amendment) Act, 2021 (Jharkhand
Act, 02 of 2022) (hereinafter to be referred as the 2nd Amendment
Act, 2021) notified in the Extraordinary Edition of Jharkhand
Gazette published by the Government of Jharkhand on
17.02.2022.
2. The petitioners have also prayed for refund of the amount of
electricity duty along with interest, if any, realized from them
pursuant to the 1st Amendment Act, 2021.
Argument on behalf of the petitioners:
3. Mr. M.S Mittal, learned senior counsel represents both sets of writ
petitioners i.e., the electricity consumers as well as captive power
plants (CPP).
4. It is submitted that in view of Section 3 of the Bihar Electricity Duty
Act, 1948 (in short "the Act, 1948") the electricity duty was being
realised from the concerned petitioners on the basis of units of
energy sold or consumed at the rate or rates specified in the
Schedule of the said Act, however, vide 1st Amendment Act, 2021,
2026:JHHC:39-DB
the said Act has been amended introducing a new method for
computation of electricity duty at the rate of certain percentage of
the 'net charges' calculated for the energy sold or consumed as a
result of which the electricity duty payable by the petitioners has
significantly increased.
5. Mr. Mittal by producing an electricity bill for the HT consumer
relating to the month of July, 2021 issued to one of the petitioners
i.e. M/s Pali Hill Breweries Pvt. Ltd., submits that prior to the 1st
Amendment Act, 2021, the said petitioner would have been liable
to pay electricity duty at the rate of Rs.0.05 per unit (5 paise) for
the electricity consumption of 1,10,136 units amounting to
Rs.5,506.80/-. However, as a result of introduction of the said
Amendment, the liability to pay the electricity duty by the said
petitioner at the rate of 8% of 'net energy charges' (since its
contract demand is less than 10 MVA) has radically enhanced to
Rs.55,556.16/- (8% of the net energy charges calculated for the
said month i.e. Rs.6,94,452). Therefore, its liability to pay the
electricity duty has increased by almost 1000%.
6. The respondents cannot distort the language of Section 3(1) of the
Act, 1948 to include within its ambit, charging of electricity duty on
'net charges' calculated for energy consumed or sold when a plain
reading of the charging section does not authorize them to levy
electricity duty on any basis, other than the units of energy
consumed/sold.
7. It is well settled that the provisions contained in the Schedule to
the parent Act must be in consonance with its substantive
2026:JHHC:39-DB
provisions and as such the respondents cannot introduce a new
basis for the levy of tax by amending the Schedule of the Act, 1948
without amending the charging section of the said Act.
8. The charging section of the Act must envisage the provision as to
whether levy of electricity duty will be made on the basis of net
charges/value/rate of electricity. In support of the said contention
Mr. Mittal has invited attention of this Court to the Electricity Duty
Acts enforced in the States of Bihar and Bengal.
9. It is argued that the respondents cannot levy electricity duty
on the basis of net charges/value/rate of electricity, unless
so specified by the charging section of the Act itself, which in
the present case, only speaks of levying electricity duty on the
units of energy consumed or sold.
10. Section 4 of the Act, 1948 also envisages that the electricity duty
is payable by the licensee under Section 3 of the said Act on the
basis of units of energy consumed or sold by him to the consumer
which further corroborates the fact that the Act, 1948 does
not envisage, in any manner, charging of duty on the basis of
net charges/value/rate of electricity. For the purpose of levying
electricity duty, one cannot stretch the machinery provisions
beyond the scope of the charging Section of the said Act. The said
Act must be read as an integrated code and if done so, it would
be clear that Sections 3 and 4 only envisage levying and payment
of duty on the basis of units consumed or sold. The 1st Amendment
Act, 2021 is, thus, ultra vires to the Act, 1948.
2026:JHHC:39-DB
11. It is also contended that Article 265 of the Constitution of India
provides that no tax shall be levied or collected except by the
authority of law and as such all acts relating to imposition of tax
must be carried out in accordance with law. In the present
case, the electricity duty was being levied upon the petitioners on
the basis of units consumed or sold as per Section 3(1) of the Act,
1948 and any other basis for imposition of electricity duty i.e., on
the basis of net charges of electricity, would be de hors the said
provision of the Act, 1948 being violative of Article 265 of the
Constitution of India.
12. It is argued that vide Section 2 of the 1st Amendment Act, 2021, a
new proviso has been inserted after sub-section (1) of Section 3
of the Act, 1948 empowering the Government to issue notification
for adding or amending or altering any of the categories or rates
in the Schedule appended to the said Act. By inserting the said
proviso, the legislature has delegated an unbridled power to the
executive to change/amend the rate of duty and/or the categories
in the Schedule appended to the said Act without providing any
guidelines whatsoever. This would certainly amount to delegation
of an essential legislative function, i.e., levying of tax without any
checks or balances, and thus amounts to an abdication of power
by the legislature.
13. It is further argued that unrestrained power has been given to the
executive by virtue of the 1st Amendment Act, 2021 to specify the
rate of electricity duty to be imposed upon the consumers. Such
excessive delegation of powers leaves room for arbitrary exercise
2026:JHHC:39-DB
of power by the executive which would be hit by Article 14 of the
Constitution of India. Moreover, no guidance has been laid down
by the legislature for fixation of rate of electricity duty not ruling
out the possibility of levying an abnormally high rate of electricity
duty by the executive as has been done in the present case in
which arbitrary standards have been adopted in fixation of its rate.
14. By virtue of the proviso to Section 3 of the Act, 1948 as amended
by the 1st Amendment Act, 2021, the executive has now been
given the power to amend the rates of tax/categories prescribed
in the Schedule to the said Act leading to a situation that if the
executive wishes to change the rate of tax and/or the categories,
it will amend the schedule of the said Act itself. However, the same
is clearly impermissible as it is only the legislature which can
amend or enact any parent legislation. Therefore, the proviso
is also hit by the doctrine of separation of power, which forms a
part of the basic structure of our Constitution.
15. It is also submitted that the term "net charges" as introduced in
the Schedule of the Act, 1948 by way of the 1st Amendment Act,
2021 is neither defined in the said Act nor in the 1st Amendment
Act, 2021 itself which leaves indefinite scope for the executive to
interpret the said term in a manner as it deems fit as well as the
same provides room to abuse its authority by arbitrarily exercising
the unbridled power. It is quite possible that the said term may be
interpreted in multiple ways. For instance, the tariffs for different
distribution licensees in the State of Jharkhand provide for
different kinds of rebates such as 'Load Factor Rebate', 'Voltage
2026:JHHC:39-DB
Rebate', 'Rebate for online payment' and 'Rebate for due date
payment' etc. It is unclear whether these rebates would be
deductible while computing the "net charges". Further, it is also
unclear whether arrears or 'Delayed Payment Surcharge (DPS)'
would be included while calculating the "net charges" and thus the
term "net charges" is ambiguous and is capable of more than one
meaning/ interpretation.
16. The Jharkhand State Electricity Regulatory Commission (JSERC)
established under Section 82 of the Electricity Act, 2003 is
entrusted to determine the tariff for retail sale of electricity in
accordance with the provisions of the said Act. In view of the 1st
Amendment Act, 2021, whenever the JSERC increases the
tariff, there will be an automatic enhancement of duty and
therefore it cannot be said that it is the State
Government/Executive who will fix the rate of electricity duty,
rather ultimately the JSERC and the tariff fixed by it will be the
governing factor in determining the rate of electricity duty. Such
indirect delegation of power to fix the electricity duty on the JSERC
is hit by the principle of delegatus non potest delegare, i.e., a
delegated authority cannot further sub-delegate.
17. There are currently six different distribution licensees in the State
of Jharkhand and every distribution licensee has a different rate of
electricity and a different distribution area. Prior to the 1st
Amendment Act, 2021, it was of little relevance as to who was
the distribution licensee for particular group of consumers since
irrespective of the rate of electricity of such distribution licensee,
2026:JHHC:39-DB
electricity duty was levied only on the units of electricity sold
namely five paisa per unit. However, after the 1st Amendment Act,
2021, the rate of duty is dependent on the rate of electricity fixed
by the JSERC. As a result of different rates of unit charges for each
distribution licensee, an anomaly will occur wherein two
consumers having the same contract demand (for instance 12
MVA) being supplied electricity by two different licensees, will have
to pay different amount of electricity duty. Therefore, the 1st
Amendment Act, 2021 is clearly violative of Article 14 of the
Constitution of India as it treats similarly situated consumers
inequally by prescribing different rates of electricity duty.
18. The rate of electricity duty has been abnormally increased without
any justification or reason. For instance, the earlier rate of
Electricity Duty for HT consumers of JBVNL having contract
demand of more than 10 MVA was Rs.0.05/- per unit, however,
after implementation of the 1st Amendment Act, 2021, the rate of
electricity duty has been fixed as 15% of the 'net charges'
calculated for the energy consumed or sold i.e., 15% of Rs. 5.50/-
amounting to Rs.0.825/- per unit. Therefore, the rate of Electricity
Duty has increased nearly 1600%. The 1st Amendment Act, 2021
contains no reason or justification for such abnormal increase in
the rate of electricity duty. Thus, such exorbitant increase in the
rate of electricity duty without any reason or policy or context, is
itself indicative of arbitrariness and hence violative of Article 14 of
the Constitution of India.
2026:JHHC:39-DB
19. The JBVNL has levied electricity duty upon the petitioner of
W.P.(T) No.3228 of 2021 at the amended rate of 8% of the net
charges calculated for the energy consumption of entire month of
July 2021, however, the 1st Amendment Act, 2021 has come
into force with effect from 7th July, 2021. Therefore, even
assuming, though not admitting, that the 1st Amendment Act,
2021 was valid with effect from the said date, JBVNL had no
authority to levy electricity duty at amended rates for the
period prior to coming into force of the said Act. Therefore, the
electricity bill raised by the respondent-JBVNL for the month of
July, 2021 is erroneous on this pretext also.
20. The Rules, 2021 was published in the Extraordinary edition of
Jharkhand Gazette on 01.04.2022, however, the same was made
effective from the retrospective date i.e. from 07.07.2021 whereby
a new explanation II was added after the existing Explanation in
clause (eb) of Rule 2 detailing as to how to arrive at the 'net
charges' after excluding the other charges from the 'Energy
Charges'.
21. The Rules, 2021 has been given retrospective effect by the State
Government in absence of any power conferred to it by Section 10
of the Act, 1948. It is a settled law that unless the Statute confers
power to make Rules with retrospective effect, the framed
Rules can have prospective operation only. Therefore, the Rules,
2021 can only be effective prospectively, i.e. from 01.04.2022
onwards. Otherwise also, the Rules, 2021 imposes a new liability
on the petitioners by introducing the concept of net charges for
2026:JHHC:39-DB
the very first time and thus cannot be said to be just clarificatory
in nature.
22. It is also contended that by reasons of the Rules, 2021, the State
has introduced the method of calculating the 'net charges', i.e., a
term used in the Schedule introduced vide 1st Amendment Act,
2021. When the Schedule itself is ultra vires the Parent Act
regarding introducing a new methodology for levying electricity
duty which is alien to the charging Section, any amendment in the
Rules which explains a term used in the said Schedule would also
be ultra vires to the Parent Act, more particularly the charging
Section. Therefore, the Explanation II added in the Rules,
2021 defining 'net charges' is also ultra vires to the Act, 1948 as
the said Act does not contemplate levying of electricity duty on
'net charges'. The said term was only introduced for the first time
in the 1st Amendment Act, 2021 by way of amending the Schedule
and thus, the Rules, 2021 inasmuch as it explains the term 'net
charges' introduced in the Schedule itself being ultra vires, is also
liable to be struck down on the same score.
23. Mr. Mittal while arguing on behalf of the Captive Power Plants has
divided his submission in two parts; first for the period from
07.07.2021 to 16.02.2022 (i.e., when the electricity duty for
captive power consumers was to be determined on the basis of
'net charges') and second from 17.02.2022 (i.e., when the
legislature vide 2nd Amendment Act, 2021, enacted that the
electricity duty for the captive consumers is to be levied on unit
basis at the rate of 50 paise per unit.)
2026:JHHC:39-DB
24. It is contended that there cannot be any provision of 'net charges'
for captive power consumers as they themselves generate power.
Prior to coming into force of the 1st Amendment Act, 2021, the
captive power plants (CPPs) could easily discharge their liability to
pay the electricity duty as the same was measured in terms of the
units of electricity consumed by them, however after coming into
force of the 1st Amendment Act, 2021, anomalous and unworkable
situation has been created for them since there does not exist
'charges' or rate at which any captive power plant consumes
electricity through its own power generation system. As such,
electricity duty on the basis of 'net charges' is thoroughly
unworkable in the case of CPPs.
25. Learned senior counsel also submits that during pendency of the
writ petition(s), the State legislature introduced the 2nd
Amendment Act, 2021 which was made effective with effect from
17.02.2022 recognising its mistake and reverting back to levying
of electricity duty with respect to captive power consumers on per
unit basis, however while doing so, it arbitrarily increased the rate
of electricity duty from 5 paise per unit to 50 paise per unit which
is unreasonable, burdensome, confiscatory, and violative of Article
14 of the Constitution of India. No reason or justification
whatsoever has been assigned for such arbitrary increase in the
rate of electricity duty by 10 times.
26. It is also submitted that all the petitioners have paid the electricity
duty as per the new provision laid down in the 1st Amendment Act,
2021 by virtue of the interim order dated 02.11.2021 passed in
2026:JHHC:39-DB
W.P.(T) No.4077 of 2021 and as such the petitioners deserve to
be refunded the amount of duty illegally collected from them in
violation of Article 265 of the Constitution of India, together with
suitable interest.
27. Mr. Kavin Gulati, learned senior counsel while representing the
petitioner of W.P.(T) No.3499 of 2021, which is a consumer of
Jharkhand Bijli Vitran Nigam Limited and Tata Steel Utilities &
Infrastructure Services Limited also makes elaborate argument on
the similar lines as advanced by Mr. M.S. Mittal, learned senior
counsel. Hence, those are not reiterated for the sake of brevity.
28. Mr. Bharat Rai Chandani, learned counsel is appearing on behalf
of the petitioner of W.P.(T) No.5429 of 2021, which is a captive
power plant. He submits that the imposition of tax or duty must
bear a rational nexus with the charging provision as well as the
subject matter of tax and in absence of the same, the incidence of
any duty is unconstitutional.
29. It is submitted that Section 3 of the Act, 1948 clearly provides for
levy of electricity duty on the sale and consumption of electricity.
Thus, it is a consumption tax which is always qua quantity. It is
not a tax imposed on sale or purchase.
30. In the present case, the purported change in the basis of
computation, i.e., from a unit-based levy of electricity duty to a
value-based levy of electricity duty without corresponding
amendment to the charging section, renders the said provision
wholly ultra vires, as the subject matter and taxable event ("units
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of energy") is not reflected in the prescribed measure ("net
charges for energy").
31. No law imposing a charge or levy can be enforced unless the
method for its assessment and computation is clearly outlined and
operable. However, the 1st Amendment Act, 2021 and the Rules,
2021 do not adequately define "net charges for energy". The
explanation inserted by the Rules, 2021 only provides a calculative
mechanism for the cases where "energy charges" are known,
which is admittedly not applicable to the CPPs who engage entirely
in captive consumption and do not pay any "charges" for their own
generated electricity.
32. By inserting a proviso to Section 3 by the 1st Amendment Act,
2021, the State legislature has delegated its essential function to
the executive without laying down adequate guidelines. Such
excessive delegation is contrary to law as laid down by the Hon'ble
Supreme Court in the case of Kunj Bihari Lal Butail & Others
Vs. State of H.P & Others reported in 2000 (3) SCC 40. In
support of the said contention, Mr. Bharat Rai Chandani has also
put reliance on the judgment of the Hon'ble Supreme Court
rendered in the cases of Wipro Limited Vs. Collected of
Customs & Another reported in 2015 (14) SCC 161 and
Devidass Gopal Krishnan & Others Vs. State of Punjab &
Others reported in 1967 SCC OnLine SC 108. Learned counsel
has also put reliance on the judgment of the Himachal Pradesh
High Court rendered in the case of NTPC Limited & Others Vs.
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State of H.P & Others (CWP No. 2916 of 2023) with other
analogous cases.
33. It is further submitted that the State of Jharkhand has already
enacted Jharkhand Value Added Tax Act, 2005 and Jharkhand
Goods and Services Tax Act, 2017 in which the charging sections
clearly provide the outer limit regarding fixation of the rate of tax.
Thus, the State is aware that the guidance needs to be provided.
Moreover, similar provisions exist in various Central statutes and
the statutes of other States as well. As such, in absence of any
amendment to Section 3 of the Act, 1948, the Schedule appended
to the 1st Amendment Act, 2021 suffers from the vice of excessive
delegation.
34. It is also contended that the delegated legislation, i.e., rules,
cannot be retrospectively applied unless the enabling statute
specifically provides for such power. Section 10 of the Act, 1948
does not confer power upon the State Government to amend Rules
with retrospective effect and thus the Rules, 2021 by which the
term 'net charges' has been defined retrospectively with effect
from 07.07.2021 is ultra vires.
35. It is lastly argued that the Schedule "A" introduced by the 2nd
Amendment Act, 2021 whereby the rate of electricity duty to be
paid by the captive power plants has been increased from 5 paise
per unit to 50 paise per unit of energy consumed is arbitrary and
confiscatory being manifold higher than the previous rates of
electricity duty. Such excessive increase in the electricity duty is
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without justification which offends Articles 14 and 265 of the
Constitution of India.
Argument on behalf of the respondent-State:
36. Mr. Sachin Kumar, learned Additional Advocate General-II
appearing on behalf of the respondent-State submits that the Act,
1948 empowers the State to specify rates in the schedule. The 1st
Amendment Act, 2021 as well as the 2nd Amendment Act, 2021
are strictly prospective as the same have been made applicable
from the dates of their publication in the official gazette i.e. with
effect from 07.07.2021 and 17.02.2022 respectively. So far as the
Rules, 2021 is concerned, the same only clarifies exclusion of
certain components from the 'Energy Charges' (demand
charge/fixed charge, meter rent/service line charge,
surcharges/rebates, etc.) while calculating the 'net charges'. This
clarification by inserting Explanation-II in Rule 2 is an operational
clarification providing certainty for the assessees regarding the
calculation methodology of 'net charges' without imposing any
new or retrospective obligation.
37. By making the Rules, 2021, no provision of Section 10 of the Act,
1948 has been violated as by the said Rules, only explanation has
been added for implementing the already existing
statutory objectives. The Rules, 2021 was introduced only after
inviting objections from the stakeholders. The concerned
department uploaded the proposed amendment and actively
solicited comments from the stakeholders as well as duly
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considered the objections before finalizing and notifying the Rules,
2021.
38. It is further contended that in the states like Chhattisgarh and
Odisha, the rates of electricity duty is comparatively higher than
that the State of Jharkhand. Otherwise also, the State has an
authority to maintain its revenue by increasing the electricity duty.
39. The power to determine tariffs vests with the State Electricity
Regulatory Commission under the Electricity Act, 2003 whereas
the electricity duty being a tax, remains within the domain of the
State Legislature. Both the fields are distinct and no illegal
delegation or constitutional infraction takes place.
40. The State is constitutionally and statutorily competent to specify
or alter the rates of electricity duty and to prescribe or amend
the mechanism/parameters for levying the said duty. The power
vested in the State Government by the amended proviso under
Section 3(1) is valid and within the legislative competence. The
mechanism/criteria for levy of electricity duty has not been
changed, rather the revision only pertains to the rate of duty on
the unit basis/rate of duty on percentum basis as well as the
computation method which has been clarified for transparency
and certainty.
41. The primary test to examine the validity of any legislation is the
"pith and substance" doctrine. The Court may examine whether
the legislation, as a whole, substantially falls within a subject
or entry enumerated in the relevant legislative list under the
Constitution and if it is found in affirmative, the legislature has the
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competence, even if the law incidentally touches upon matters
assigned to another legislature. There is a strong presumption that
the statutes and rules are constitutional if promulgated by a
competent legislature/executive and the onus is on the challenger
to show lack of such power. Rule must derive its validity from the
parent Act and if the Act is competent and the Rule is within the
scope being not ultra vires the Act, it is valid. The rules must not
override primary legislation or constitutional provisions. If a Rule
violates the Act or the Constitution, it may be struck down.
42. Learned AAG-II has put reliance on the judgment of the Hon'ble
Supreme Court rendered in the case of S. Sundaram Pillai &
Others Vs. V.R. Pattabiraman & Others reported in (1985) 1
SCC 591. In the said case, Their Lordships have held that
normally, a proviso is meant to be an exception to something
within the main enactment or to qualify something enacted
therein, but the proviso would be within the purview of the
enactment. In other words, a proviso cannot be torn apart from
the main enactment nor can it be used to nullify or set at naught
the real object of the main enactment.
43. The use of the word "may" connotes discretion and not compulsion
unless the context clearly requires otherwise. When the word
"may" rather than "shall" is used, the legislative intent is
to authorize and not to mandate exercise of power. Section 10 of
the Act, 1948 provides that the State Government may, subject to
the condition of previous publication in the official Gazette, make
rules to carry out the purposes of this Act. Thus, the condition of
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previous publication before making any rule is not compulsorily
required.
44. Once the legislature has provided clear legislative policy and
guidance, it is constitutionally valid for it to empower the
government to implement those policies, including altering
schedules or rates by notification, as and when required. There is
a distinction between laying down the essential legislative policy
which must remain with the legislature, and delegating the
executive the power of implementation or making minor changes.
Accordingly, the power of the State Government to revise the
schedule appended to the Act, 1948 through official Gazette
notification as provided under the 1st Amendment Act, 2021, is
constitutionally valid.
45. It is also submitted that the Hon'ble Supreme Court in the case of
Avinder Singh & Ors V. State of Punjab reported in (1979) 1
SCC 137 has held that double taxation is not per
se unconstitutional unless it is specifically prohibited or is
arbitrary and unreasonable. In absence of any
constitutional prohibition, the legislature has the competence to
levy taxes more than once on the same subject in different
capacities or events.
Findings of the Court:
46. Heard the learned counsel for the parties and perused the
materials available on record.
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Re.-Challenge to the vires of Sections 2 and 3 of the 1st
Amendment Act, 2021
47. Entry 53 of List II (State List) of the Seventh Schedule of the
Constitution of India grants power to the State Legislature to enact
laws on the subject dealing with "Taxes on the consumption or
sale of electricity". In exercise of the said power, the erstwhile
undivided State of Bihar had enacted the Act, 1948. The said Act
inter alia provides for levy of electricity duty on the sale or
consumption of electricity on the basis of units of energy which is
payable by the licensee to the State Government, though it may
be recovered from the consumers by the licensee in terms of
Section 4(2) of the said Act in respect of the energy sold to them.
48. Section 3(1) of the Act, 1948 is the charging Section which
provides as under:
"3. Incidence of Duty -
(1) Subject to the provisions of sub-section (2), there shall be
levied and paid to the State Government, on the units of
energy consumed or sold, excluding losses of energy in
transmission, a duty at the rate or rates specified in the
Schedule.
(2) --------"
49. Important characteristics of the said Section is as under: -
i. Electricity duty is levied and paid to the
State Government on the sale or consumption
of energy.
ii. The duty is payable on the basis of units of electrical
energy sold or consumed.
iii. Transmission losses are excluded from the ambit
of electricity duty.
iv. The rates have been specified in the Schedule appended
to the said Act."
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50. Section 4 of the Act, 1948 is a machinery provision which
prescribes the manner in which the duty is to be paid and/or
collected by the licensee. The said provision is reproduced
as under for ready reference:-
"4. Payment of duty-
1. Every licensee shall pay every month to the State
Government at the time and in the manner prescribed the
proper duty payable under Section on the units of energy
consumed by him or sold by him to the consumer.
(2) Every licensee may recover from the consumer the
amount which falls to be paid by the licensee as duty in
respect of the energy sold to the consumer.
(3) -----------
(4) Every person including any department of the State
Government, other than a licensee, who generates energy
for his own use or for the use of his employees, or partly for
such use and partly for sale, shall pay every month at the
time and in the manner prescribed, the proper duty payable
under section 3, on the units of energy consumed by him or
his employees or sold by him.
(4a) Every person other than a licensee who obtains, for sale
or partly for his own use and partly for sale, bulk supply of
energy generated by a licensee or other person, shall pay
every month to the State Government at the time and in the
manner prescribed, the duty payable under section 3 on the
units of energy so obtained and sold or partly sold and partly
consumed by him.
(5) -----"
51. Section 10 of the Act, 1948 empowers the State Government to
make rules subject to the condition of previous publication in the
official Gazette so as to carry out the purposes of the said Act.
52. The Schedule appended to the Act, 1948 prescribed the rate of
electricity duty on the basis of units of energy consumed or sold.
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53. On reorganisation of the State of Bihar, the Act, 1948 was adopted
by the State of Jharkhand vide S.O. No.117 dated
15.12.2000 under the provision of Section 85 of the Bihar
Reorganization Act, 2000.
54. Thereafter, vide Jharkhand Electricity Duty (Amendment) Act,
2011 (hereinafter to be referred as "the Act, 2011") various
amendments were carried out in the Act, 1948 including the
schedule appended to the said Act. Accordingly, the existing
schedule was also substituted. By the said Act, the definition of
the term "Duty" was inserted in Section 2 of the Act, 1948 as
defined under Section 3(f) of the Act, 2011 which meant electricity
duty payable under Section 3 of the Act, 1948 (as adopted by the
State of Jharkhand) and included additional duty. Further, Section
3(u) of the Act, 2011 defined the term "Unit" which meant one
kilowatt hour of electricity.
55. The Act, 1948 was further amended by the 1st Amendment Act,
2021 which was notified in the Official Gazette on 07.07.2021 by
reasons of which amendment in Section 3 of the Act, 1948 was
made by adding a proviso after Section 3 of the said Act in the
following manner:
"Provided further that, the Government may, by
notification, add to or amend or alter any of the categories
or rates in the Schedule appended to this Act."
56. Article 246(3) read with Entry 53 of List II of the Seventh Schedule
of the Constitution of India empowers the State Legislature to levy
tax on the consumption or sale of electricity. However, by way of
proviso added to Section 3 of the Act, 1948, the Government of
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Jharkhand has been delegated the power to add or amend or alter
any of the categories or rates in the Schedule appended to the
Act, 1948 vide issuance of notification, however, no such guideline
has been laid down for exercise of such power.
57. In the case of Kunj Bihari Lal Butail (Supra.) Their Lordships
held that a delegated power to legislate cannot be so exercised as
to bring into existence substantive rights or obligations or
disabilities not contemplated by the Act itself.
58. The decision of Kunj Bihari Lal Butail (Supra.) has been
subsequently followed by the Hon'ble Supreme Court in the case
of Wipro Limited (Supra.). In the said case, Their Lordships
declared the first proviso to Rule 9(2)(ii) of the Customs Valuation
Rules, 1988 as bad in law and unsustainable.
59. In the case of Devidass Gopal Krishnan (Supra.) the
Constitution Bench was examining whether Section 5 of the Punjab
General Sales Tax Act, 1948 was void as it delegated unlimited
executive power to the State to levy sales tax at a rate which it
thought fit and finally Their Lordships held the said Section 5 as
void by holding as under: -
"15. Further, citation is unnecessary, for the principle of
excessive delegation is well settled and the cases are only
illustrations of the application of the said principle. The law on
the subject may briefly be stated thus:
The Constitution confers a power and imposes a duty
on the Legislature to make laws. The essential
legislative function is the determination of the
legislative policy and its formulation as a rule of
conduct. Obviously it cannot abdicate its functions in
favour of another. But In view of the multifarious
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activities of a welfare State, it cannot presumably
work out all the details to suit the varying aspects of
a complex situation. It must necessarily delegate the
working out of details to the executive or any other
agency. But there is a danger inherent in such a
process of delegation. An overburdened Legislature
or one controlled by a powerful executive may unduly
overstep the limits of delegation. It may not lay down
any policy at all; it may declare its policy in vague
and general terms; it may not set down any standard
for the guidance of the executive; it may confer an
arbitrary power on the executive to change or modify
the policy laid down by it without reserving for itself
any control over subordinate legislation. This self-
effacement of legislative power in favour of another
agency either in whole or In part is beyond the
permissible limits of delegation. It is for a Court to
hold on a fair, generous and liberal construction of
an impugned statute whether the Legislature
exceeded such limits. But the said liberal construction
should not be carried by the Courts to the extent of
always triyng to discover a dormant or latent
legislative policy to sustain an arbitrary power
conferred on executive authorities. It is the duty of
the Court to strike down without any hesitation any
arbitrary power conferred on the executive by the
Legislature.
16. Under section 5 of the Punjab General Sales Tax Act, 1948,
as it originally stood, an uncontrolled power was conferred on
the Provincial Government to levy every year on the taxable
turnover of a dealer a tax at such rates as the said Government
might direct. Under that section the Legislature practically
effaced itself in the matter of fixation of rates and it did not give
any guidance either under that section or under any other
provisions of the Act-no other provision was brought to our
notice. The argument of the learned counsel that such a policy
could be gathered from the constitutional provisions cannot be
accepted, for, if accepted, it would destroy the doctrine of
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excessive delegatoin. It would also sanction conferment of
power by Legislature on the executive Government without
laying down any guidelines in the Act. The minimum we expect
of the Legislature is to lay down in the Act conferring such a
power of fixation of rates clear legislative policy or guidelines in
that regard. As the Act did not prescribe any such policy, It
must be held that section 5 of the said Act, as it stood before
the amendment, was void."
60. In the case of Corporation of Calcutta & Another Vs. Liberty
Cinemas reported in 1964 SCC online SC 65, the Hon'ble
Supreme Court has held as under:
"26. No doubt when the power to fix rates of taxes is left to
another body, the legislature must provide guidance for such
fixation. The question then is, was such guidance provided in
the Act? We first wish to observe that the validity of the
guidance cannot be tested by a rigid uniform rule; that must
depend on the object of the Act giving power to fix the rate. It
is said that the delegation of power to fix rates of taxes
authorised for meeting the needs of the delegate to be valid,
must provide the maximum rate that can be fixed, or lay down
rules indicating that maximum. We are unable to see how the
specification of the maximum rate supplies any guidance as to
how the amount of the tax which no doubt has to be below the
maximum, is to be fixed. Provision for such maximum only sets
out a limit of the rate to be imposed and a limit is only a limit
and not a guidance."
61. In the case of Municipal Corporation of Delhi Vs. Birla
Cotton Spinning and Weaving Mills & Another reported in
1968 SCC OnLine SC 13, the Hon'ble Supreme Court has held
thus:-
"29. What form the guidance should take is again a matter
which cannot be stated in general terms. It will depend upon
the circumstances of each statute under consideration; in some
cases guidance in broad general terms may be enough; in other
cases more detailed guidance may be necessary. As we are
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concerned in the present case with the field of taxation, let us
look at the nature of guidance necessary in this field. The
guidance may take the form of providing maximum rates of tax
upto which a local body may be given the discretion to make
its choice, or it may take the form of providing for consultation
with the people of the local area and then fixing the rates after
such consultation. It may also take the form of subjecting the
rate to be fixed by the local body to the approval of the
Government which acts as a watch-dog on the actions of the
local body in this matter on behalf of the legislature. There may
be other ways in which guidance may be provided. But the
purpose of guidance, whatsoever may be the manner thereof,
is to see that the local body fixes a reasonable rate of taxation
for the local area concerned. So long as the legislature has
made provision to achieve that reasonable rates of taxation are
fixed by local bodies, whatever may be the method employed
for this purpose -- provided it is effective -- it may be said that
there is guidance for the purpose of fixation of rates of taxation.
The reasonableness of rates may be ensured by fixing a
maximum beyond which the local bodies may not go. It may be
ensured by providing safeguards laying down the procedure for
consulting the wishes of the local inhabitants. It may consist in
the supervision by Government of the rate of taxation by local
bodies. So long as the law has provided a method by which the
local body can be controlled and there is provision to see that
reasonable rates are fixed, it can be said that there is guidance
in the matter of fixing rates for local taxation. As we have
already said there is pre-eminently a case for delegating the
fixation of rates of tax to the local body and so long as the
legislature has provided a method for seeing that rates fixed
are reasonable, be it in one form or another, it may be said that
there is guidance for fixing rates of taxation and the power
assigned to the local body for fixing the rates is not uncontrolled
and uncanalised. It is on the basis of these principles that we
have to consider the Act with which we are concerned."
62. Further in the judgment rendered in the case of NTPC Limited
(Supra.), the Himachal Pradesh High Court, (authored by one of
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us i.e. Justice Tarlok Singh Chauhan, C.J.) quashed and set aside
the provisions of the Himachal Pradesh Water Cess on Hydropower
Electricity Generation Act, 2023 holding that the same was
unconstitutional on account of having delegated power to
Government of Himachal Pradesh to fix rates of water cess without
any legislative policy or guidance. Consequently, the Himachal
Pradesh Water Cess on Hydropower Electricity Generation Rules,
2023 and the Notification dated 26.08.2023 issued by the State
Government whereby the tariff structure on water cess was fixed
on the basis of "Head" were also quashed.
63. It is no more res integra that the Constitution of India confers
power and imposes duty on the legislature to make laws. On
certain occasions, the said power is delegated to the executive,
however before delegating power to the executive, the legislature
must fix the guidelines for exercise of the such power which
depends on the facts and circumstance of the particular case.
64. This Court is of the considered view that the proviso added to
Section 3 of the Act, 1948 by the 1st Amendment Act, 2021 is liable
to be struck down as the said proviso has given unbridled and
uncontrolled power to the State Government to fix the rate of
electricity duty that too without laying down any guideline for
exercise of such power. It certainly amounts to excessive
delegation of power by the State Legislature to the State
Government.
65. Learned AAG-II has put reliance on the judgment rendered in the
case of Pandit Banarsi Das Bhanot & Others Vs. The State
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of Madhya Pradesh & Others reported in 1958 SCC OnLine
SC 25 wherein the Hon'ble Supreme Court examined the
constitutional validity of a Statute which authorized the State
Government to exempt certain transactions from taxation by
notification and to amend or withdraw such exemptions by
subsequent notification(s). Their Lordships held that the power
delegated to the executive to grant or modify exemptions by
notification was constitutionally valid, provided the legislature laid
down the policy and principles for guidance.
66. Learned AAG-II has also put reliance on the judgment of the
Hon'ble Supreme Court rendered in the case of Municipal
Corporation of Delhi Vs. Birla Cotton, Spinning and
Weaving Mills & Another reported in 1968 SCC OnLine SC
13. In the said case, Their Lordships upheld the constitutional
validity of delegation of power to the Municipal Corporations to
levy and collect taxes and to fix the rate by holding that such
delegation was valid if the statute laid down the broad policy
and provided sufficient guidance or purpose, even if it did not
specify an upper limit for the tax. It was further held that such
delegation was subject to judicial review to guard
against excessive or unguided delegation or
arbitrary/unreasonable exercise of power.
67. We are, however, of the view that the aforesaid judgments will not
be applicable in the present case particularly due to the reason
that here no policy or guideline has been laid down by the State
Legislature before delegating power to the State Government to
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add, amend or alter the categories or rate of electricity duty
mentioned in the Schedule appended to the Act, 1948.
68. By reasons of Section 3 of the 1st Amendment Act, 2021, the
Schedule of the Act, 1948 specifying the rates of electricity duty
has been substituted in the following manner:
The Schedule
(see Section 3)
Sl. No. Tariff Category Slabs Rate in
percentum of
net charges
for energy
consumed or
sold
1 Domestic/Non-Domestic LT/ 6%
Domestic HT/Temporary
Supply/Advertisement/Religious
places/Prayer Establishments/
Any Category of consumption not
falling under any categories
2 Industrial HT/Mining/Any type of Upto 10 8%
HT connection excluding MVA
Domestic HT/Commercial HT Above 15%
10 MVA
3. Irrigation & Agriculture Exempted
69. The petitioners have challenged the substitution of the said
Schedule on the ground that the same has introduced a new basis
for calculation of the rate of electricity duty i.e. percentum of net
charges for energy consumed or sold, which is totally contrary to
the main provision of Section 3 of the Act, 1948.
70. Section 3 of the Act, 1948 is the charging Section which clearly
and explicitly provides that the electricity duty is to be levied at
the rate or rates specified in the Schedule on the units of energy
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consumed or sold excluding losses of energy in transmission and
transformation.
71. Section 4 is a machinery provision which also provides that the
electricity duty is payable by every licensee under Section 3 on the
units of energy consumed by him or sold by it to the consumer.
Thus, the incidence of electricity duty is based upon the
consumption or sale of units of energy. The schedule appended to
the Act, 1948 had prescribed the rate of electricity duty which was
being charged at the rate of per unit of energy consumed or sold.
However, by reasons of the 1st Amendment Act, 2021, the rate of
electricity duty has now been fixed in percentum of 'net charges'
of the energy consumed or sold without amending the substantive
provision of Section 3 of the Act, 1948 which makes the 1st
Amendment Act, 2021 inconsistent with the parent Act. In the case
of Murarilal Mahabir Prasad & Others v. B.R. Vad & Others
reported in (1975) 2 SCC 736, the Hon'ble Supreme Court has
held that a machinery Section should be so construed as to
effectuate the charging Section. Moreover, there is no machinery
Section for calculating the 'net charges' so as to levy the electricity
duty.
72. In the case of Hardev Motor Transport v. State of M.P. &
Others reported in (2006) 8 SCC 613, the Hon'ble Supreme
Court has held that the provisions contained in the Schedule must
be in consonance with the substantive provisions of the main Act.
It must be in conformity with the charging Section.
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73. In the case of Aphali Pharmaceuticals Ltd. Vs. State of
Maharashtra & Others reported in (1989) 4 SCC 378, the
Hon'ble Supreme Court has held that a Schedule in an Act of
legislature is a mere question of drafting. It may be used in
construing provisions in the body of the Act. It is the legislative
intent that is material. It is as much an act of legislature as the Act
itself and it must be read together with the Act for all purposes of
construction. Expressions in the Schedule cannot control or prevail
against the express enactment and in case of any inconsistency
between the Schedule and the enactment, the enactment is to
prevail and if any part of the Schedule cannot be made to
correspond it, must yield to the Act.
74. In the case in hand, the Schedule introduced by the 1st
Amendment Act, 2021 is completely inconsistent with the charging
provision as the methodology of charging the electricity duty has
been changed from units of energy consumed or sold to
percentum of 'net charges' of energy consumed or sold.
75. Moreover, the term 'net charges' has not been defined either in
the Act, 1948 or in the 1st Amendment Act, 2021 and as such there
is a possibility that the same would be interpreted in more than
one way.
76. The Hon'ble Supreme Court in the case of Govind Saran Ganga
Saran Vs. Commissioner of Sales Tax & Others reported in
1985 Supp SCC 205 has held that the components which enter
into the concept of a tax are well known. The first is the character
of the imposition known by its nature which prescribes the taxable
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event attracting the levy, the second is a clear indication of the
person on whom the levy is imposed and who is obliged to pay the
tax, the third is the rate at which the tax is imposed, and the fourth
is the measure or value to which the rate will be applied for
computing the tax liability. If those components are not clearly and
definitely ascertainable, it is difficult to say that the levy exists
according to point of law. Any uncertainty or vagueness in the
legislative scheme defining any of those components of the levy
will be fatal to its validity.
77. It is a well settled rule of interpretation that in construing a taxing
statute, one must have regard to the strict letter of the law and
not merely to spirit of the statute or the substance of the law. In
a taxing statute there is no room for intendment. There is no
equity about a tax and there is also no presumption as to a tax. If
the legislature fails to clarify its meaning by use of appropriate
language, the benefit must go to the tax-payer. Even if there is
any doubt as to interpretation, it must be resolved in favour of the
subject.
78. In the case of Commissioner of Customs (Import) Vs. Dilip
Kumar & Co. & Others reported in (2018) 9 SCC 1, the Hon'ble
Supreme Court has held as under:
"14. We may, here itself notice that the distinction in
interpreting a taxing provision (charging provision) and in the
matter of interpretation of exemption notification is too obvious
to require any elaboration. Nonetheless, in a nutshell, we may
mention that, as observed in Surendra Cotton Oil Mills
case [Collector of Customs & Central Excise v. Surendra Cotton
Oil Mills & Fertilizers Co., (2001) 1 SCC 578] , in the matter of
interpretation of charging section of a taxation statute, strict
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rule of interpretation is mandatory and if there are two views
possible in the matter of interpretation of a charging section,
the one favourable to the assessee need to be applied. There
is, however, confusion in the matter of interpretation of
exemption notification published under taxation statutes and in
this area also, the decisions are galore [ See: Sun Export
Corpn. v. Collector of Customs, (1997) 6 SCC 564; CCE v. Abhi
Chemicals and Pharmaceuticals (P) Ltd., (2005) 3 SCC
541; CCE v. Parle Exports (P) Ltd., (1989) 1 SCC 345; Commr.
of Customs v. Konkan Synthetic Fibres, (2012) 6 SCC
339; Collector of Customs v. Swastic Woollens (P) Ltd., 1988
Supp SCC 796; Commr. of Customs v. Reliance Petroleum Ltd.,
(2008) 7 SCC 220.] .
34. The passages extracted above, were quoted with approval
by this Court in at least two decisions being [CIT v. Kasturi and
Sons Ltd., (1999) 3 SCC 346] and [State of W.B. v. Kesoram
Industries Ltd., (2004) 10 SCC 201] (hereinafter referred to as
"Kesoram Industries case", for brevity). In the later decision, a
Bench of five Judges, after citing the above passage from
Justice G.P. Singh's treatise, summed up the following
principles applicable to the interpretation of a taxing statute:
"(i) In interpreting a taxing statute, equitable considerations
are entirely out of place. A taxing statute cannot be
interpreted on any presumption or assumption. A taxing
statute has to be interpreted in the light of what is clearly
expressed; it cannot imply anything which is not expressed;
it cannot import provisions in the statute so as to supply any
deficiency; (ii) Before taxing any person, it must be shown
that he falls within the ambit of the charging section by clear
words used in the section; and (iii) If the words are
ambiguous and open to two interpretations, the benefit of
interpretation is given to the subject and there is nothing
unjust in a taxpayer escaping if the letter of the law fails to
catch him on account of the legislature's failure to express
itself clearly."
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79. In the case of South Indian Bank Ltd. Vs. Commissioner of
Income Tax reported in (2021) 10 SCC 153, the Hon'ble
Supreme Court has held as under:
"33. In the above context, the following saying of Adam Smith
in his seminal work -- The Wealth of Nations may aptly be
quoted:
The tax which each individual is bound to pay ought to be
certain and not arbitrary. The time of payment, the manner
of payment, the quantity to be paid ought all to be clear and
plain to the contributor and to every other person."
Echoing what was said by the 18th Century Economist, it
needs to be observed here that in taxation regime, there is
no room for presumption and nothing can be taken to be
implied. The tax an individual or a corporate is required to
pay, is a matter of planning for a taxpayer and the
Government should endeavour to keep it convenient and
simple to achieve maximisation of compliance. Just as the
Government does not wish for avoidance of tax equally it is
the responsibility of the regime to design a tax system for
which a subject can budget and plan. If proper balance is
achieved between these, unnecessary litigation can be
avoided without compromising on generation of revenue."
80. Article 265 of the Constitution of India provides that no tax shall
be levied or collected except by the authority of law. Thus, Article
265 contemplates that:
"(i)There must be a law
(ii) That law must authorize levy of tax; and
(iii)That tax has to be levied or collected so authorized"
81. In the present case, Section 3 of the Act, 1948 authorizes levy of
electricity duty on the basis of units of energy consumed or sold
and as such any other method of charging the electricity duty
without amending the charging section is violative of Article 265
of the Constitution of India.
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82. Another dimension in the matter is that if the electricity duty is
charged on the basis of percentum of the 'net charges' for energy
consumed or sold, then the similarly situated person has to pay
different electricity duty depending on the distribution licensee
from whom they are taking electricity as the rate of electricity
(tariff) fixed by the JSERC for different distribution licensee
generally varies which would also amount to violation of Article 14
of the constitution of India.
83. In the case of Kunnathat Thatehunni Moopil Nair Vs. State
of Kerala & Another reported in 1960 SCC OnLine SC 7, the
Hon'ble Supreme Court has held that a taxing statute is not wholly
immune from attack on the ground that it infringes the equality
clause contained in Article 14 and if the same class of property is
subjected to an incidence of taxation which results in inequality,
the law may be struck down as unconstitutional. The guarantee of
equal protection of the laws must extend even to taxing statutes.
84. Otherwise also, charging of electricity duty on the basis of 'net
charges' is unworkable in the case of captive consumers as they
themselves generate power and hence there exists no rate at
which they will be charged for the electricity consumed by
themselves.
Re.-Challenge to the vires of the Rules, 2021:
85. The Bihar Electricity Duty Rules, 1949, (as adopted by the State of
Jharkhand) was amended in exercise of the powers conferred by
sub-section (2) of Section 10 of the Act, 1948 vide notification
published in the official Gazette on 01.04.2022 which was made
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effective from retrospective date i.e. from 07.07.2021. By the said
amendment, a new Explanation-II was added after the existing
Explanation in clause (eb) of Rule 2 in the following manner: -
"Explanation II - Unless the context otherwise requires, net
charges shall be arrived at after excluding following charges
from the 'Energy charges':
i. Demand charge / fixed charge;
ii. Meter rent/ service line charge;
iii. Capacitor surcharge;
iv. Voltage rebate;
v. Load Factor rebate;
vi. Delayed payment surcharge; or
vii. Any other surcharge/ rebate."
86. The learned counsel for the respective petitioners submit that
before making any rule under Section 10 of the Act, 1948, the
State Government is bound to make previous publication of such
Rule in the official gazette, however the said procedure has not
been followed in the present case before making the Rules, 2021.
On the other hand, the learned AAG-II appearing for the
respondent-State submits that the Rules, 2021 has been framed
only after inviting objections from the stake-holders.
87. The claim of the respondent-State is that the use of the word
"may" in Section 10 of the Act, 1948 connotes discretion and not
compulsion. As such, compliance with respect to previous
publication of the Rule is not compulsorily required.
88. We are of the considered view that the respondent-State has
misconstrued the provision of Section 10 of the Act, 1948. The
word 'may' used in Section 10 is in relation to making of Rule and
not for previous publication. Once the State Government intends
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to make the Rules, its previous publication is mandatory before
enforcing it. It is a well settled principle of law that when legislation
provides the manner in which any particular act is to be done, the
same should be done in the said manner only.
89. It is profitable to refer herein the judgment of the Hon'ble Supreme
Court rendered in the case of Municipal Corporation, Bhopal
Vs. Misbahul Hasan & Others reported in (1972) 1 SCC 696.
In the said judgment, Their Lordships held that the modification in
the age of retirement by making a Rule under Section 433 of the
Madhya Pradesh Municipal Corporation Act, 1956 was not valid as
the procedure of previous publication of Rule as mandated under
Section 24 of the Madhya Pradesh General Clauses Act, 1957 was
not followed.
90. Relevant part of the said judgment is quoted hereunder for the
ready reference in the present case which reads as under: -
"12. Assuming however, that the modification of the age of
retirement could be made by a rule made under Section 433 of
the Act and not merely by a bye-law, as contemplated by the
Act, we find, that a condition precedent for an amendment of
a rule has not been followed here. Section 433 of the Act
enacts: "The State Government may after previous publication
in the Gazette make rules for the purpose of carrying into effect
the provisions of this Act". Section 24 of the Madhya Pradesh
General Clauses Act, 1957, lays down:
"24. Provisions applicable to making of rules or bye-laws,
etc., after previous publication.--Where, by any Madhya
Pradesh Act, a power to make rules or bye-laws is expressed
to be given subject to the condition of the rules or bye-laws
being made after previous publication, then the following
provisions shall apply, namely--
(a) the authority having power to make the rules or bye-
laws shall, before making them, publish a draft of the
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proposed rules or bye-laws for the information of persons
likely to be affected thereby;
(b) The publication shall be made in such manner as that
authority deems to be sufficient, or if the condition with
respect to previous publication so requires, in such manner
as the Government prescribes;
(c) there shall be published with the draft a notice specifying
a date on or after which the draft will be taken into
consideration;
(d) the authority having power to make the rules or bye-
laws; and where the rules or bye-laws are to be made with
the sanction, approval or concurrence of another authority,
that authority also shall consider any objection or suggestion
which may be received by the authority having power to
make the rules or bye-laws from any person with respect to
the draft before the date so specified;
(e) the publication in the Official Gazette of a rule or bye-
law purporting to have been made in exercise of a power to
make rules or bye-laws after previous publication shall be
conclusive proof that the rule or bye-law has been duly
made."
13. The legislative procedure envisaged by Section 24, set out
above, is in consonance with notions of justice and fair-play as
it would enable persons likely to be affected to be informed so
that they may take such steps as may be open to them to have
the wisdom of a proposal duly debated and considered before
it becomes law. This mandatory procedure was not shown to
have been complied with here."
91. In the case of Rajendra Agricultural University Vs. Ashok
Kumar Prasad & Others, reported in (2010) 1 SCC 730, the
Hon'ble Supreme Court has held as under: -
"19. As noticed above, several reasons might have contributed
to making of a statutory provision providing for publication of
all Statutes in the Official Gazette. All those reasons may not
apply or exist in regard to making of an individual statute. But
once the law lays down that publication of a Statute in the
Official Gazette is a part of the process of making a statute,
the object of making such a provision for publication recedes
into the background and becomes irrelevant, and on the other
hand, fulfilment of the requirement to make public the Statute
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by publication in the Official Gazette becomes mandatory and
binding."
92. Another aspect in the matter is that the Rules, 2021 was published
in the official gazette on 01.04.2022, however, the same was made
effective from 07.07.2021 i.e. with retrospective effect.
93. In the case of Union of India & Others Vs. Martin Lottery
Agencies Limited reported in (2009) 12 SCC 209, the Hon'ble
Supreme Court has held that if the amendment introduces a new
charge or concept, it cannot be held clarificatory and must
necessarily operate prospectively.
94. In the case of Federation of Indian Mineral Industries &
Others v. Union of India & Another reported in (2017) 16
SCC 186, the Hon'ble Supreme Court has held as under:
"26. The power to give retrospective effect to subordinate
legislation whether in the form of rules or regulations or
notifications has been the subject-matter of discussion in
several decisions rendered by this Court and it is not necessary
to deal with all of them--indeed it may not even be possible to
do so. It would suffice if the principles laid down by some of
these decisions cited before us and relevant to our discussion
are culled out. These are obviously relatable to the present set
of cases and are not intended to lay down the law for all cases
of retrospective operation of statutes or subordinate legislation.
The relevant principles are:
(i) The Central Government or the State Government (or any
other authority) cannot make a subordinate legislation
having retrospective effect unless the parent statute,
expressly or by necessary implication, authorises it to do so.
[[Hukam Chand v. Union of India, (1972) 2 SCC 601]
and [Mahabir Vegetable Oils (P) Ltd. v. State of Haryana,
(2006) 3 SCC 620] ].
(ii) Delegated legislation is ordinarily prospective in nature
and a right or a liability created for the first time cannot be
given retrospective effect. (Panchi Devi v. State of
Rajasthan [Panchi Devi v. State of Rajasthan, (2009) 2 SCC
589] )
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(iii) As regards a subordinate legislation concerning a fiscal
statute, it would not be proper to hold that in the absence
of an express provision a delegated authority can impose a
tax or a fee. There is no scope or any room for intendment
in respect of a compulsory exaction from a citizen.
[Ahmedabad Urban Dev. Authority v. Sharadkumar
Jayantikumar Pasawalla [Ahmedabad Urban Dev.
Authority v. Sharadkumar Jayantikumar Pasawalla, (1992) 3
SCC 285] and State of Rajasthan v. Basant Agrotech (India)
Ltd. [State of Rajasthan v. Basant Agrotech (India) Ltd.,
(2013) 15 SCC 1]]"
95. It is now well settled that the Central Government or the State
Government or any other authority cannot make a subordinate
legislation having retrospective effect unless the parent statute,
expressly or by necessary implication, authorises it to do so. In the
case in hand, the Act, 1948 does not authorize the State
Government to make rule retrospectively.
96. Moreover, since we have already held that the schedule introduced
by the 1st Amendment Act, 2021 is ultra vires to the Act, 1948, the
Rules, 2021 whereby method for calculating the 'net charges' has
been provided, is also ultra vires to the Act, 1948 more particularly
Section 3 of the said Act.
Re.-Challenge to the vires of the 2nd Amendment Act,
2021:
97. During pendency of the present batch of writ petitions, the Act,
1948 has further been amended by the 2nd Amendment Act, 2021
and the same has been notified in the Official Gazette on
17.02.2022. Vide the said amendment, Schedule "A" has been
added as new Schedule in the Act, 1948 as was amended by the
1st Amendment Act, 2021 in the following manner: -
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Schedule A
(Tariff in respect of captive consumption)
Sl. No. Tariff Category Gross units of energy
consumed or sold
1. Captive consumption by mining, Exempted
commercial and industrial units,
that have installed generating
sets.
2. Captive consumption by all 50 paise per unit of
industrial units that have energy consumed
installed power station
3. Captive consumption by all 50 paise per unit of
mining units that have installed energy consumed
power station
98. So far as the 2nd Amendment Act, 2021 is concerned, the
petitioners (CPPs) have not challenged the authority of the State
Legislature in making such provision, however the increase of the
rate of electricity duty by the said Act has been challenged on the
ground that the same is extortionate.
99. The learned counsel for the petitioners (CPPs) in support of his
contention has put reliance on the judgment of the Hon'ble
Supreme Court rendered in the case of Bidhannagar (Salt
Lake) Welfare Assn. Vs. Central Valuation Board & Others
reported in (2007) 6 SCC 668. In the said case, exorbitant
increase in the tax on the public has been quashed on the ground
that the same was indicative of arbitrariness and hence violative
of Article 14 of the Constitution of India. Their Lordships have held
that in democracy, people are supreme and all the authorities must
function for the public welfare and hence, excessive increase in
the tax burden on the public is surely not for the public welfare.
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100. On bare perusal of the Schedule "A" as inserted in the Act, 1948
by the 2nd Amendment Act, 2021, it appears that vide said
amendment, the rate of electricity duty to be paid by the CPPs has
been increased from 05 paisa per unit to 50 paisa per unit which
is to be paid on gross units of energy consumed or sold. The 2nd
Amendment Act, 2021 is thus in consonance with Section 3(1) of
the Act, 1948 as the same also stipulates for levy of electricity duty
on the units of energy consumed or sold.
101. It is a well settled principle of law that the power of judicial review
is not exercised in the matters of economic policy. The court does
not substitute its judgment for that of the legislature or its agents
as to matters within the province of either. The court does not
supplant the "feel of the expert" by its own views. When the
legislature acts within the sphere of its authority and delegates
power to an agent, it may empower the agent to make findings of
fact which are conclusive, provided such findings satisfy the test
of reasonableness. In all such cases, judicial inquiry is confined to
the question whether the findings of fact are reasonably based on
evidence and whether such findings are consistent with the laws
of the land. The act of price fixation is not within the province of
the courts. Judicial function in respect of such matters is exhausted
when a rational basis is found for the conclusions reached by the
concerned authority.
102. In the case of Kirloskar Ferrous Industries Limited &
Another Vs. Union of India & Others reported in (2025) 1
SCC 695, the Hon'ble Supreme Court has held as under:
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"54. The doctrine of judicial restraint, which is central to this
discussion, emphasizes that courts should exercise caution and
avoid involvement in policy decisions, as these are complex
judgments that require a balancing of diverse and often
competing interests. Policies are crafted based on thorough
analysis of social, economic, and political factors,
considerations beyond the court's purview. The court is tasked
with ensuring that policies do not breach constitutional
provisions or statutory limits; however, they should not replace
policymakers' judgments with their own unless absolutely
necessary.
55. Policy decisions often require the expertise of professionals
and specialists in fields such as economics, public health,
national security, and environmental science. These domains
involve specialized knowledge that judges, as generalists in
legal matters, may lack. For instance, in economic policy, the
executive may decide on trade tariffs or subsidies based on
extensive data and projections that aim to balance domestic
industry support with global trade commitments. The courts,
lacking the same level of economic expertise and without the
authority to make trade-offs among competing policy
objectives, is typically not equipped to second-guess these
kinds of decisions.
56. While courts have the power of judicial review to ensure
that executive actions and legislative enactments comply with
the Constitution, this power is not absolute. Judicial review is
meant to act as a safeguard against actions that overstep legal
boundaries or infringe on fundamental rights, but it does not
entail a comprehensive re-evaluation of the policy's wisdom.
The judicial review of policy decisions is limited to assessing the
legality of the decision making process rather than the
substantive merits of the policy itself. For example, if a
government policy infringes on fundamental rights or
discriminates against a particular group, the courts have a duty
to strike down such policies. However, in the absence of
constitutional or legal violations, the courts should respect the
policy choices made by the executive or legislature.
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57. The duty of the court in policy-related cases is primarily to
determine whether the policy falls within the scope of the
authority granted to the relevant body. If the policy decision is
within the executive's legal authority and has been made
following proper procedures, the courts should defer to the
expertise and discretion of the policy-makers, even if the policy
appears unwise or imprudent. This restraint ensures that the
courts do not impose its own perspective on policy matters that
are rightly the responsibility of other branches.
58. Economic and social policies often involve significant
redistribution of resources, prioritization of interests, and
balancing of public needs, which requires careful consideration
by those with specialized knowledge and broad perspectives. In
the realm of economic policy, for instance, questions regarding
the allocation of subsidies, fiscal deficits, or budget allocations
are best managed by the executive, which has access to
economic data and is accountable to the public for its financial
management. Judicial interference in such areas risks creating
disruptions in the economic balance that policymakers are
trying to achieve.
59. Courts should assume that policy-makers act in good faith
unless there is clear evidence to the contrary. As long as the
policy does not contravene the Constitution or violate statutory
provisions, it is not the role of the courts to question the wisdom
or fairness of such policy.
60. While judicial restraint is essential in respecting the
boundaries of each branch of government, it does not mean
that courts abdicate their responsibility to protect constitutional
rights. The courts must still intervene if a policy infringes on
fundamental rights, discriminates unfairly, or breaches
statutory provisions. The role of the court in such instances is
to protect individuals and groups from unlawful actions while
maintaining the overall integrity of the policy-making process.
This balance ensures that while courts do not interfere in
matters of policy wisdom, they remain vigilant guardians of
constitutional rights."
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103. In the case of Akola Municipal Corporation and Another
Versus Zishan Hussain Azhar Hussain and Another
reported in 2025 SCC OnLine SC 2729, the Hon'ble Supreme
Court found that the power of the appellant-Corporation to revise
the rate of municipal taxes was never the subject matter of
challenge before the High Court and the only issue that was urged
before the High Court pertained to the procedure and mode
adopted by the appellant-Corporation while effecting such revision
regarding the rate of municipal taxes. Their Lordships held that
the High Court ought not to have embarked upon a roving inquiry
into the merits or wisdom of the decision to revise the tax rates
unless it was demonstrated that the procedure adopted by the
appellant-Corporation was ex-facie arbitrary, perverse,
unreasonable or in blatant derogation of the governing statutory
provisions. Finally, Their Lordships allowed the appeal and
quashed the judgment of the High Court observing that the record
did not disclose any infirmity and the High Court had transgressed
the permissible limits of judicial review in interfering with the
decision of the appellant-corporation.
104. In the said case, Their Lordships found that the appellant-
Corporation had kept the taxes at a stagnant rate for almost 16
years and observed that if the exercise had been taken on regular
basis, perhaps the cumulative increase of tax rates by the
appellant-Corporation in the year 2017 would have been much
higher than 40% and the abrupt shock could have been avoided.
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105. In the present case also, the petitioners have not challenged the
authority of the State Legislature in introducing the 2nd
Amendment Act, 2021, rather it has been challenged only on the
ground that the rate of electricity duty fixed by the said
amendment is excessive and shocking. This Court is of the view
that the rate of electricity duty has not been increased since 2011
and the same has been increased about 10 times vide the 2nd
Amendment Act, 2021 only after 11 years which cannot be said to
be highly excessive and shockingly.
106. In W.P.(T) No.3228 of 2021, the respondent-State has filed
counter affidavit dated 08.04.2022, wherein a chart has been
given in paragraph no.13 to show that the revenue collection
regarding electricity duty in other neighbouring states like
Chhattisgarh and Orissa is comparatively much higher than the
State of Jharkhand. It is evident from the said chart that in the
State of Jharkhand, the supply of electricity for the financial year
2018-19 was 18,737 million units (MU) and the revenue collection
of electricity duty was Rs.209.07 crores whereas in the State of
Chhattisgarh, the supply of electricity for the same financial year
was 26,417 MU and the revenue collection of electricity duty was
Rs.1790.27 crores. Moreover, in the State of Odisha, the supply of
electricity for the same financial year was 32,115 MU and the
revenue collection of electricity duty was Rs.3257.66 crores. The
said data has not been disputed by the petitioners which justifies
the said enhancement in the rate of the electricity duty by the
respondent-State. Though the petitioners-Captive Power Plants
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have claimed that the rate of electricity duty fixed by the 2 nd
Amendment Act, 2021 is exorbitant, yet they have failed to place
on record any data in support of the said claim. It is well settled
that the power of judicial review is not exercised in the matter of
price fixation, rather it is within the domain of the expert bodies.
107. In view of the aforesaid discussions, the writ petitions are disposed
of in the following terms:-
(i) 1st Amendment Act, 2021 and the Rules, 2021 are declared
ultra vires to the Act, 1948.
(ii) 2nd Amendment Act, 2021 is declared intra vires to the Act,
1948 and the validity of the same is hereby upheld.
(iii) Electricity bills issued to the consumers and the Captive
Power Plants pursuant to the 1st Amendment Act, 2021 and
the Rules, 2021 are quashed.
(iv) The Captive Power Plants are, however, liable to pay
electricity duty as per the revised Schedule 'A' introduced
by the 2nd Amendment Act, 2021 from the date of coming
into force of the said Amendment Act i.e. with effect from
17.02.2022.
108. The Court takes note of the observation made on 02.11.2021 in
W.P.(T) No.4077 of 2021 to the effect that since the State itself
was reviewing the amendments, any bill raised or action taken
under the amended or substituted provision would be subject to
the result of the writ petitions. As such, we direct the respondent-
State that if any payment has been realized from the Captive
Power Plants as electricity duty pursuant to the 1st Amendment
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Act, 2021 as well as the Rules, 2021, the same shall be adjusted
against their future liabilities of electricity duty. So far as the
consumers of electricity under any distribution licensee is
concerned, if any payment of electricity duty has been realized
from them by the concerned licensee and paid to the State
pursuant to the 1st Amendment Act, 2021 as well as the Rules,
2021, the same shall be adjusted towards their future bills and the
said amount shall be claimed by the concerned licensee from the
State.
109. Pending interlocutory application(s), if any, in respective writ
petition(s) is/are also disposed of.
(Tarlok Singh Chauhan, C.J.)
(Rajesh Shankar, J.)
5th January, 2026
A.F.R.
Rohit/
Uploaded on 05.01.2026
