STATE OF MADHYA PRADESH AND ORS. versus M/S. BIRLA JUTE MANUFACTURING CO. LTD.

Citation: [1995] SUPP. 1 S.C.R. 271 · Decided: 10-05-1995 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

. ~·· 
STATE OF MADHYA PRADESH AND ORS. 
v. 
MIS. BIRLA JUTE MANUFACTURING CO. LTD. 
MAY 10, 1995 
[KULDIP SINGH AND N. VENKATACHALA, JJ.] 
Madhya Pradesh Electricity Duty Act, 194~Section 3--Duty leviable 
on consumption of electrical energy-Premises to which Mines Act, 1952 ap-
plies-'Factory'-Meaning of 
The respondent had set up several industries all over the country for 
the manufacture and sale of consumable goods. One of such industries was 
set up with line stone mines at one place and a cement factory at another 
place in the State of Madhya Pradesh. Huge lime stone boulders extracted 
• 
A 
B 
c 
from the mines known as dhokas were broken into small sizes lime stones D 
known as gittis for being used as raw material for manufacture of cement 
in the cement factory by a lime-stone crusher erected at a premises located 
at the mines-head of lime-stone mines to which the Mines Act applied. For 
the electrical energy consumed by the lime stone crusher in that premises 
at mines bead during the year 1979-1980, the Government of Madhya 
Pradesh levied duty u/s 3 of the Madhya Pradesh Electricity Duty Act, 1949 E 
at the rate calculated under Item (i) of Table below that Section and raised 
demands thereon. 
The respondent refuted such levies and demands by contending that 
it was liable for levy of duty on electrical energy consumed for breaking F 
dhokas into gittis by the lime stone crusher in the premises at mines head 
only at a fate calculated in Item (2) of Table to Section 3 of the 1949 Act, 
notwithstanding the applicability of the Mines Act to the said premises, in 
that that premises bad to be regarded as a factory for fixing the rate of 
duty payable on electrical energy consumed therein because of inclusive 
meaning of factory given in Explanation (c) to section 3 of that Act itself. G 
Since the Government of Madhya Pradesh persisted in its demands, the 
respondents flied a Writ Petition challenging the said levies and demands. 
The High Court quashed the levies and demands by upholding the conten-
tion that its liability to pay duty was only at the rate calculated under 
clause (2) of Table to section 3 of the Act. Hence this appeal. 
H 
271 
272 
SUPREME COURT REPORTS [1995] SUPP. 1 S.C.R. 
A 
While the correctness of the said judgment and order of the High 
Court was pending consideration and decision by this Court, the State of 
Madhya Pradesh enacted and brought into force the Madhya Pradesh 
Electricity Duty (Amendment and Validation) Act, 1984 which amended 
certain provisions of the 1949 Act, validating duty levied on consumption 
B of electrical energy imposed under the 1949 Act in respect of premises to 
which the Mines Act applied. The respondents filed Writ Petition under 
Article 32 of the Constitution of India impugning the constitutionality of 
the Validation Act. Since questions in the Civil Appeal and the Writ 
Petition related to sustainability of levy imposed under the 1949 Act on 
electrical energy consumed in a premises to which the Mines Act applied, 
C they were disposed of together. 
Allowing the appeal and dismissing the Writ Petition, this Court 
HELD : 1.1. The rates of duty leviable under various items in the 
D Table to Section 3 of the Madhya Pradesh Electricity Duty Act, 1949 apply 
according to the purpose for which electrical energy is sold or consumed. 
The proviso to the table declares that the electrical energy sold or supplied 
for consumption for any one purpose is used either wholly or partly, 
without the consent of the distributor of energy or producer of electricity, 
E as the case may be, for consumption for any other purpose for which 
higher rate of duty is chargeable, the entire energy sold or supplied shall 
be charged at the highest rate applicable. This proviso, therefore, expressly 
states that the rates of duty leviable for electrical energy consumed by 
premises or purpose covered by more than one item, it is the highest rate 
F 
fixed under them which is leviable where the consumer of electrical energy 
does not obtain the consent from the distributor of electrical energy or 
producer of electricity for change in such user, hence, according to the 
proviso if consent is obtained by the consumer of electrical energy from 
the distributor of energy or producer of electricity for using electric energy 
in a premises of a factory covered by Item (2) it cannot be used for 
G premises covered under Items (1) and if such thing is done without 
obtaining 

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