Madras High Court

M/S.Thambbi Modern Spinning Mills Ltd vs The Chief Managing Director on 7 August, 2024

Author: M.Dhandapani

Bench: M.Dhandapani

                                                                                W.P.No.16179 of 2022

                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                    DATED : 07.08.2024

                                                           CORAM

                                    THE HONOURABLE MR.JUSTICE M.DHANDAPANI

                                                W.P.No.16179 of 2022
                                                        And
                                          W.M.P.Nos.15548 and 15550 of 2022

                     M/s.Thambbi Modern Spinning Mills Ltd.,
                     Represented by its Authorized Signatory               ... Petitioner

                                                             Vs.

                     1.The Chief Managing Director,
                       Tamil Nadu Generation and Distribution Corporation Ltd.,
                       Chennai – 2.

                     2.Superintending Engineer,
                       Salem Electricity Distribution Circle,
                       Tamil Nadu Electricity Board,
                       Salem – 636 014.                                    ... Respondents


                     Prayer:

                                  Petition filed under Article 226 of the Constitution of India to

                     issue a Writ of Certiorarified Mandamus calling for the records of the

                     second respondent in communications dated 22.12.2021 bearing

                     reference Lr.No.SE/SEDC/AOR/AAO/AS               II//A1/F.HTSC 114/D. 630/

                     2020, Lr.No.SE/SEDC/AOR/AAO/AS                II//A1/F.HTSC 161/D. 631/2021,

                     Lr.No.SE/SEDC/AOR/AAO/AS              II//A1/F.HTSC 158/D. 632/2021 and

                     Lr.No.SE/SEDC/AOR/AAO/AS                II//JA1/F.HTSC      36/D. 629/2021,

                     1/9

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                                                                                  W.P.No.16179 of 2022

                     quash the same and consequently direct the second respondent to

                     cancel and release the Mortgage deed dated 29.07.2015 registered as

                     doc.no.3020 of 2015 on the file of the Joint Registrar, East, Salem

                     executed by the Petitioner.



                                       For Petitioner  : Mr.Abishek Jenasenan
                                       For Respondents : Mr.I.Syed Sibghatulla


                                                           ORDER

The petitioner has filed this writ petition seeking issuance of Writ

of Certiorarified Mandamus calling for the records of the second

respondent in communications dated 22.12.2021 bearing reference

Lr.No.SE/SEDC/AOR/AAO/AS II//A1/F.HTSC 114/D. 630/ 2020,

Lr.No.SE/SEDC/AOR/AAO/AS II//A1/F.HTSC 161/D. 631/2021,

Lr.No.SE/SEDC/AOR/AAO/AS II//A1/F.HTSC 158/D. 632/2021 and

Lr.No.SE/SEDC/AOR/AAO/AS II//JA1/F.HTSC 36/D. 629/2021 and to

quash the same and to consequently direct the second respondent to

cancel and release the Mortgage deed dated 29.07.2015 registered as

doc.no.3020 of 2015 on the file of the Joint Registrar, East, Salem

executed by the Petitioner.

2.The learned counsel appearing for the petitioner submitted

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that the petitioner is registered under the provisions of Companies Act,

1956 and is part of the cotton spinning and yarn Industry. The

petitioner had 3 spinning units and 1 dying unit located within the city

limits of Salem and each unit had separate high tension electricity

service connection bearing HTSC Nos.36, 114, 161 and 158. The

petitioner had been paying the consumption charges without delay.

3.The learned counsel appearing for the petitioner further

submitted that the Government of Tamil Nadu by enacting the Tamil

Nadu Tax on Consumption or Sale of Electricity Act, 2003 (Act No.12 of

2003) sought to levy tax on consumption or sale of electricity within

the State of Tamil Nadu and the same was questioned by the

petitioner and several other industries by way of writ petitions before

the Hon'ble Division Bench of this Court and the Hon'ble Division Bench

of this Court vide order dated 13.07.2006 dismissed all the writ

petitions. Thereafter, the respondent issued proceedings requiring the

petitioner to pay the electricity tax arrears along with current

consumption charges.

4.The learned counsel appearing for the petitioner further

submitted that the petitioner was required to pay the electricity tax

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arrears calculated upto September, 2005 along with Belated Payment

Surcharge on such arrears. Subsequently, by order dated 04.10.2006,

the levy of BPSC was restricted upto September, 2004 as the supply

code enacted by the Tamil Nadu Electricity Regulatory Commission

which came into force from October, 2004 did not authorize the

collection of BPSC on tax arrears.

5.The learned counsel appearing for the petitioner further

submitted that therefore the petitioner filed W.P.Nos.39559 to 29562

of 2006 and this Court vide order dated 18.10.2006 stayed the order

of recovery and also issued directions to the petitioner to pay the

entire E-tax arrears in 22 equal monthly installments and

subsequently, the writ petitions were allowed on 03.01.2013, based on

the order dated 22.12.2011 in W.A.(MD) No.1590 of 2011, wherein it

was categorically held that the electricity board is not entitled to levy

any surcharge on belated payment in respect of the electricity tax. As

against the order dated 22.12.2011 in W.A.(MD) No.1590 of 2011, the

respondents preferred SLP No.12282 of 2014 and the Hon'ble Apex

Court dismissed the SLP on 01.03.2016. However, the respondents

have issued the impugned communications, which is not sustainable

one.

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6.Heard the arguments advanced on either side and perused the

materials available on record.

7.Similar issue has already been considered by the Hon'ble

Division Bench of the Madurai Bench of this Court in the judgment

dated 22.12.2011 made in W.A.(MD) No.1590 of 2011 [The

Superintending Engineer Vs. Sivakasi Electrochemical Limited],

wherein, it is held that the electricity board is not entitled to levy any

surcharge on belated payment in respect of the electricity tax and the

relevant portion of the said decision is extracted hereunder:

“19. Be that as it may, at this stage, the Learned counsel for the Appellant/Respondent strenuously submits that as per 20.01 of the Terms and Conditions of the Tamil Nadu Electricity Code, the belated payment surcharge is payable on any outstanding amount excluding surcharge component, if any. Belated payment surcharge is payable from the date following the last date for payment of any bill and no surcharge will be levied on surcharge and contends that based on the aforesaid condition, the Appellant/ Respondent is entitled to collect the belated

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payment of surcharge on the belated payment of arrears on electricity tax.

20. On this submission made by the learned counsel for the Appellant/Respondent, this Court is of the considered view that the said submission is unacceptable for this Court on the simple ground that as per Clause 20.01 of the Terms and Conditions of the Electricity Code, the licencee is entitled to collect the belated amount on the amount due and payable to the licencee viz, the consumption charges. As the Electricity tax is not the amount due and payable to the Appellant/ Respondent herein, it has no right to collect the surcharge on the belated payment of electricity and hence the claim of the Appellant/Respondent and hence the claim of the Appellant/Respondent for a sum of Rs.2,34,308/- being the belated payment of surcharge for the non-payment of Electricity Tax in time is unsustainable in law.

21. In short, on a consideration of the entire facts and circumstances of the present case in an integral fashion, this Court comes to an inescapable conclusion that the Appellant/ Respondent is not entitled to levy any

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surcharge on the Belated Payment of Electricity Tax (based on the facts and circumstances which float on the surface, in the case before Court). Therefore, this Court holds that the Learned Single Judge has rightly allowed the writ petition and further, set aside the demand of the respondent in collecting the Belated payment of Surcharge on the payment of arrears of Rs.2,34,308/- alone which are perfectly valid in the eye of law.

22. In short, the order of the learned Single Judge while allowing the writ petition as referred to supra, does not suffer from any material irregularity or patent illegality. As such, the said order does not require any interference in the hands of this Court.”

8.In view of the judgment of the Hon'ble Division Bench of the

Madurai Bench of this Court dated 22.12.2011 made in W.A.(MD)

No.1590 of 2011 [The Superintending Engineer Vs. Sivakasi

Electrochemical Limited], the impugned communications of the

second respondent dated 22.12.2021 are liable to be set aside and the

same are set aside. The second respondent is directed to cancel and

release the Mortgage deed dated 29.07.2015 registered as

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doc.no.3020 of 2015 on the file of the Joint Registrar, East, Salem

executed by the Petitioner, within a period of two weeks from the date

of receipt of a copy of this order.

9.The writ petition is allowed. No costs. Consequently, the