Kamachi Steels Limited vs The State of Tamil Nadu

T. Raja, J.—The present Writ Petition has been filed by one M/s. Kamachi Steels Limited, challenging the impugned order passed by the

4th respondent/the Superintending Engineer, Chennai Electricity Distribution Circle/North, Chennai in letter No.

SE/CEDC/N/(O)/AAO/HT/AS/F.E. Tax/D/03 dated 31.12.2003 and quash the same.

The petitioner Company is manufacturing steel ingots and obtained High Tension Service Connection bearing No. 1612 from the 4th

respondent/the Superintending Engineer, Chennai Electricity Distribution Circle/North, Chennai on 06.11.2000 for a sanctioned load of 1825

KVA.

After getting the new Service Connection No. 1612 on 06.11.2000, the petitioner started production using power from the 4th respondent on

28.11.2000. Subsequently, the 2nd respondent/the Chief Electrical Inspector to Government has also granted provisional approval as required

under Rule 63 of the Indian Electricity Rules, 1956 to install machinery by enclosing their approval letter with copy to the Superintending Engineer.

Thereafter, the petitioner has also obtained ""Form RC"" Central Excise Registration Certificate for their new Unit before applying for electricity

supply with the 4th respondent. Since the petitioner is entitled for exemption of 5% Additional Tax on their monthly consumption bill, on the basis

of G.O.Ms. No. 1084, Public Works Department, dated 30.07.1992, for a period of three years from the date of commencement of production

of the principal product, the petitioner applied for the exemption of Additional Tax on consumption of energy by submitting applications to the 2nd

respondent and the 2nd respondent has also approved the exemption from levy of additional electricity tax at the rate of 5% to the petitioner from

28.11.2000 to 27.11.2003 vide letter No. 17199/A1/2001 dated 17.08.2001. In view of grant of exemption, the respondents did not collect

electricity tax from the petitioner.

But, in the year 2003, the 4th respondent suddenly issued the impugned letter Lr. No. SE/CEDC/N/(O)/AAO/HT/AS/F.E.Tax/D/03 dated

31.12.2003 informing the petitioner that the electricity tax exemption granted to the petitioner stood cancelled from 16.06.2003 in view of the

repealing of the old Tamil Nadu Electricity Duty Act, 1929 and the Tamil Nadu Electricity (Taxation on Consumption) Act, 1962 and hence the

exemption allowed for the new industrial undertakings u/s 3-A of the Tamil Nadu Electricity (Taxation on Consumption) Act, 1962 was restricted

upto 15.06.2003 only. As a result, the 4th respondent has also asked the petitioner to pay a sum of Rs. 11,49,773.42/-. Since the petitioner also

apprehended the risk of disconnection in the event of not paying the above said amount, the present Writ Petition has been filed under Article 226

of the Constitution of India on the ground that the impugned order passed by the 4th respondent is arbitrary and also against the principles of

natural justice.

Mr. K. Jayachandran, the learned Counsel appearing for the petitioner submits that the 4th respondent is not entitled to recall or withdraw the

exemption once granted to the petitioner since the same has been settled in view of the latest Supreme Court Judgment reported in Southern

Petrochemical Industries Co. Ltd. Vs. Electricity Inspector and E.T.I.O. and Others, .

The learned Counsel appearing for the petitioner further submits that the case of the petitioner is not only covered by the above said Judgment,

but, this Court also had an occasion to deal with the levy of duties in W.P. No. 4860 of 2006 wherein a learned single Judge of this Court, vide

order dated 10.03.2010, by applying the ratio laid down by the Hon''ble Supreme Court in the Judgment reported in Southern Petrochemical

Industries Co. Ltd. Vs. Electricity Inspector and E.T.I.O. and Others, allowed the Writ Petition. Therefore, it was pleaded that the petitioner is

standing on a better footing than the writ petitioner in W.P. No. 4860 of 2006.

In reply, the learned Counsel appearing for the respondents, while making attempt to support the impugned order, was not able to say that the

order was passed after giving opportunity to the petitioner and was also not able to challenge the reasoned order passed by this Court in W.P. No.

4860 of 2006.

Heard the learned Counsel on both sides.

Admittedly, the petitioner being a new Company established for manufacture of steel ingots, applied for provisional approval as required under

Rule 63 of the Indian Electricity Rules, 1956 to install machinery. Subsequently, when the petitioner applied seeking exemption of 5% additional

tax on their monthly consumption bill for a period of three years from the date of commencement of manufacture of production of the principal

product on the basis of G.O.Ms. No. 1084, Public Works Department, dated 30.07.1992, the 2nd respondent, granted approval of the request

of the petitioner and granted exemption from levy of Additional Electricity Tax at the rate of 5% to the petitioner from 28.11.2000 to 27.11.2003

vide his letter No. 17199/A1/2001 dated 17.08.2001.

Therefore, as rightly contended by the learned Counsel appearing for the petitioner, the exemption granted by the 2nd respondent to the

petitioner being accrued, as rightly held by the Apex Court in Southern Petrochemical Industries Co. Ltd. Vs. Electricity Inspector and E.T.I.O.

and Others, the said exemption granted earlier cannot be withdrawn subsequently, that too, without any reason. Even in the impugned order dated

31.12.2003 passed by the 4th respondent, no reason whatsoever has been furnished while rolling back from their own promise given to the

petitioner in the form of exemption of 5% Additional Electricity Tax on their monthly consumption bill for a period of three years.

In any event, the ratio as well as the observation made by the Apex Court in the Judgment reported in Southern Petrochemical Industries Co.

Ltd. Vs. Electricity Inspector and E.T.I.O. and Others, is squarely applicable to the present case. Therefore, on the basis of the Judgment of the

Supreme Court reported in Southern Petrochemical Industries Co. Ltd. Vs. Electricity Inspector and E.T.I.O. and Others, , I am of the considered

opinion, the Writ Petition deserves to be allowed. Accordingly, the impugned order which is passed totally contrary to the principles of natural

justice is set aside.

With the above observation, the Writ Petition is allowed. However, there shall be no order as to costs.