LexSOUTHERN PETROCHEMICAL INDUSTRIES CO. LTD. versus ELECTRICITY INSPECTOR AND E.T.I.0. AND ORS.
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SOUIBERN PETROCHEMICAL INDUSTRIES CO. LTD. A v. ELECTRICITY INSPECTOR AND E.T.1.0. AND ORS. MAY 15, 2007 [S.B. SINHA AND MARKANDEY KA TJU, JJ.] B Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003- Legislative competence and validity of-Held: State has not overstepped its limits of power-Legislative competence of the State and validity of the Act C upheld-Also not repugnant to the Electricity (Supply) Act, 1948- Constitution of India, 1950-Articles 14, 248, 254, 288, 366-General Clauses Act, 1897, Section 6. Doctrines: Doctrine of purposive construction-Doctrine of legitimate expectation-Doctrine of promissory estoppel-meaning and applicability of Words & Phrases: "Unless a different intention", "Corresponding': "not withstanding such repeal"-Meaning of in the context of Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003 and General Clauses Act, 1897. "Permanence': "privilege': "goods"-Meaning of The validity of the provisions of Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003 and/or application thereof in respect of the generating companies as also the consumers, were challenged before the Madras High Court in a large number of writ petitions. The Division Bench of the Madras High Court negatived the challenge. Hence the present appeals. On behalf of the appellants it was contended that the consumers of electrical energy form a homogenous class and, thus, could not have been discriminated in the matter of grant of exemption; that the equality clause contained in Article 14 of the Constitution oflndia being a basic structure of 955 D E F G H 956 SUPREME COURT REPORTS [2007] 6 S.C.R. A the Constitution must in a situation of this nature be enforced and in that view of the matter, it was obligatory on the part of the State to treat all the consumers on equal footing; that in view of the fact that Section 14 of the 2003 Act per se is arbitrary, the burden of proof was on the State to show that the classification is a valid classification, and that the validity of the 2003 B Act can be read down for the purpose of upholding its constitutionality. It was also contended that the High Court committed a manifest error in interpreting Sub-sections (1) and (2) of Section 20 of the 2003 Act together; that they are independent of each other and operate in different fields; that whereas the proviso appended to Section 20(1) of the 2003 Act provides for c savings that follow from the repeal of the 1962 Act and the 1939 Act; that Section 20(2) provides for a legal fiction for continuation of certain things as if the Acts of 1962 and 1939 had not been repealed; that Sub"section (I) of Section 20 does not contain any statement which occurs in Section 6 of the General Clauses Act being "unless a different intention appears", and in that view of the matter, all rights and privileges obtained by a consumer in terms D of the provisions of the 1939 Act or the 1962 Act are safeguarded. Having regard to the new economic policy, the statute encourages more private participation in the private sector and thereby a literal or narrow interpretation will defeat the same; that in any event, Section 14 should be construed in such a manner so as to make it consistent with Article 14 of the E Constitution of India; and that the 'privilege' is superior to the right and in that view of the matter even if the appellants have not acquired any right, they having enjoyed privilege, the same is saved under Clause (b) of Sub-section (1) of Section 20 of the 2003 Act. It was also submitted that the parties have set up their industries relying F on the promises made by the State; that the sugar industries have spent about Rs. 745.64 crores in that behalf and that taking account of this substantial spin-off, doctrine of promissory estoppel should be attracted in this case and in that view of the matter, the State is estopped from demanding the electricity duty from the captive power plants including the appellants. G On behalf of the Respondent-State of Tamil Nadu, it was inter alia contended that the exclusive right of the State Legislature to legislate matters under entries enumerated in List II being exclusive, Entry 53 thereof would not be subservient to Entry 38 of List III of the Seventh Schedule of the Constitution of India; that no material has been placed on record to show that H the State Legislature has transgressed its legislative powe
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