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Judgment
A decision dated May 28, 2015 negating the claim for
disbursement under the West Bengal Incentive Scheme,
2004 is under challenge in the present writ petition.
Learned Senior Advocate for the petitioners has submitted
that, the first petitioner is entitled to subsidy under the
West Bengal Incentive Scheme, 2004. He has referred to the Scheme of 2004. He has referred to the correspondence
exchanged between the parties with regard thereto. In
particular reference to a writing dated May 22, 2014 issued
by the first respondent, learned Senior Advocate for the
petitioner has submitted that, the quantum of incentive
received by the first petitioner being Rs.2,116.49 Lakhs is
admitted. As against the admitted quantum received by the
first petitioner, the respondent no. 1 is seeking to adjust
waiver of electricity duty claiming that the first petitioner
has allegedly received Rs.679.85 Lakhs in excess. The same
is not permissible inasmuch as the electricity duty spoken
of in the writing dated May 22, 2014 and elsewhere, is not
chargeable inasmuch as the same was not leviable under
the statute. He has referred to the provisions of the Bengal
Electricity Duty Act, 1935 particularly Section 3 thereof.
Since the first petitioner is exempt from paying such
electricity duty under such statute, it cannot be said that,
the first petitioner is liable to pay such duty. Since the first
petitioner is not liable to pay such duty, the question of the
first petitioner receiving the benefit of duty waiver does not arise. Therefore, the first respondent is incorrect in claiming
that the first petitioner has received a sum of Rs.679.85
Lakhs in excess under the West Bengal Incentive Scheme,
2004.
Opposing the contentions of the petitioners, learned Senior
Advocate for the State respondent has submitted that, the
West Bengal Incentive Scheme, 2004 read as a whole,
contemplates and stipulates a maximum limit of incentive
to be received thereunder. Receipt of waiver of electricity
duty by a constituent governed under the Scheme of 2004
is to be taken into consideration for the purpose of
calculation of the receipt of incentives under the Scheme of
2004. A constituent entitled to the disbursements under the
Scheme of 2004 can receive upto 100% of the Fixed Capital
Investments. The Fixed Capital Investment of the first
petitioner is Rs.1,436.64 Lakhs. The first petitioner has
actually received a sum of Rs.2,116.49 Lakhs. Therefore,
the first petitioner has received Rs.679.85 Lakhs in excess.
The first petitioner has received electricity duty waiver on its
application. Therefore, the value of such waiver has to be taken into consideration as a component under the Scheme
of 2004 for calculating the receivable under such Scheme.
He has referred to the writing dated July 26, 2007 enclosing
the eligibility certificate for the Scheme of 2004 and the
enclosures thereto. In support of his contentions, learned
Senior Advocate for the State respondent has relied upon
2004 Volume 8 Supreme Court Cases page 229
( Krishna Bahadur v. Purna Theatre & Ors .) and 2014
Volume 11 Supreme Court Cases page 744 (Shiv
Chander More & Ors. v. Lieutenant Governor & Ors.).
Is the State entitled to the refund of Rs.679.85 Lakhs along
with interest as held in the writing dated May 22, 2014, is
the issue in the present writ petition.
A reasoned Order dated May 28, 2015 is under challenge in
the present writ petition. By the impugned order, the
authorities have demanded a sum of Rs.679.85 Lakhs in
three equal installments payable monthly from the first
petitioner. The impugned order provides that, in case of
default, interest at the prevailing rate as fixed by the
Reserve Bank of India would be levied on the outstanding amount. The first installment was directed to be paid within
30 days from the date of the impugned order.
The petitioner carries on business as a manufacturer of iron
and steel products. It has a factory at Kalyaneshwari,
Burdwan. It has two electric furnaces which runs on
electricity. Its Unit has started commercial production on
July 3, 2006. The petitioner had applied for a certificate for
registration under the West Bengal Incentive Scheme, 2004.
An eligibility certificate was issued to the first petitioner
under cover of a letter dated July 26, 2007. The eligibility
certificate annexed to the writing dated July 26, 2007
provides that, the first petitioner would be eligible for
one/more than one incentive(s) with effect from July 19,
2017 for the period mentioned against the item(s) of
incentive(s) shown in the attached annexure. The annexure
to the eligibility certificate of the first petitioner has five
items. One of them being waiver of electricity duty. The
Directorate of Electricity is designated to be the authority to
be approached for availing the waiver of electricity duty.
Such annexure also provides that, the period for which the incentive would be available would be as per paragraph
10.1 of the Scheme of 2004. The eligibility certificate is not
under challenge in the present proceedings. The parties are,
therefore, bound by the terms and conditions contained in
the eligibility certificate. The first petitioner had accepted
the eligibility certificate and had acted thereon. It had
obtained the waiver of electricity duty under Section 3 of the
Bengal Electricity Duty Act, 1935 read with its second
Schedule with effect from July 3, 2006 for a period of five
years, that is, up to July 7, 2011.
Section 3 of the Bengal Electricity Duty Act, 1935, is as
follows:-
"3. Duty on units of energy consumed. - (1) Subject to the provisions of [sub-section (3),] there shall be charged, levied and paid to the State Government a duty (hereinafter referred to as ''electricity duty''), [on the net charge for energy consumed or the units of energy consumed, as the case may be,] at the rtes specified in the First Schedule ; Provided that during a period of one year with effect from -
(a) the 1st day of June, 1979, no electricity duty [on the net charge for energy consumed or the units of energy consumed, as the case may be,] shall be payable by a person (other than a licensee) who generates energy from a diesel generating plant, or
(b) the 1st day of April, 1985, no electricity duty [on the net charge for energy consumed or the units of energy consumed, as the case may be,] shall be payable by a person (other than a licensee) who generates energy from a [coal-based generating plant, or
(c) the 1st day of February, 1990, no electricity duty [on the net charge for energy consumed or the units of energy consumed, as the case may be,] shall be payable by a person (other than a licensee) who generates energy from a waste-gas-based generating plant, registered under section 7B, for his own consumption for any industrial or manufacturing process (including cold storages and cinema houses), and for such other purposes as the State Government may, by notification in the Official Gazette, specify in this behalf.
Explanation.- For the purposes of this proviso, "own consumption" shall not include any consumption for domestic purposes :
Provided further that the State Government may, by notification in the Official Gazette, extend the period referred to in the first proviso from time to time but such extension shall not exceed a period of one year at a time :
Provided also that where any electricity duty is charged, levied or paid at the rates specified in any of the clauses of any article of Part C of the First Schedule, such duty may be charged, levied or paid, monthly for a period of three consecutive months on the basis of average monthly consumption during the three months immediately preceding the period as aforesaid, in such manner, in such areas, for such class of consumers and subject to such conditions as may be prescribed.
Explanation.- The expression "month" shall mean a period of not less than 25 days and not more than 35 days and shall be computed in the manner prescribed.
(2)(a) The special rate of duty referred to in [sub-clause
(ii) of clause (b) of article 2] of Part b of the First Schedule shall not be admissible unless-
(i) the cost of energy consumed for purposes of electrolysis or heating in eclectic furnaces in twenty per cent. or more of the total cost of manufacture by electrolysis or heating in eclectic furnaces, and (ii) separate books of account are maintained showing separately the details of the cost of energy consumed for purposes of electrolysis or heating in eclectic furnaces and the total cost of manufacture by electrolysis or heating in eclectic furnaces.
(b) An industrial undertaking claiming the benefits of the special rate of duty referred to in [sub-clause (ii) of clause (b) of article (2)] of Part B of the First Schedule shall make an application in writing to an officer specially appointed in this behalf by the State Government by notification in the Official Gazette and thereupon such officer shall, after giving the applicant an opportunity of being heard and after making such enquiry (if any) as he may think fir, make an order,-
(i) if he is satisfied that the requirements of this Act and the rules made thereunder have been complied with, allowing the application, or
(ii) if he is not so satisfied, rejecting the application, and such order shall, subject to the provisions of clause (c) be final.
(c) The State Government may, on application or of its own motion, revise any order made under clause (b).
(3) Electricity duty shall not be leviable [on the net charge for energy consumed or the units of energy consumed as recorded in the meter, as the case may be,]-
(a) by any Government, except tot eh extent specified in the Second Schedule;
(b) by, or in respect of, any - (i) local authority, (ii) railway administration as defined in the Indian Railways Act, 1890. (iii) institution or class of persons specified in the Second Schedule, Except the extent specified in the Second Schedule; (c) in any - (i) place of public worship, public burial or burning-ground or other place for the disposal of the dead, (ii) premises declared by the State Government to be used exclusively for purposes of public charity. (iii) vessel whether sea-going or inland."
Section 3 of the Bengal Electricity Duty Act, 1935 requires
an industrial undertaking claiming the benefits of the
special rate of duty to make an application in writing to an
officer specially appointed in this behalf by the State
Government. Such officer, thereafter, will consider such
application in accordance with law and may grant approval
to such application. Apparently, the first petitioner had
made an application to such effect and was granted
approval for the special rate which it had enjoyed for the
period from July 3, 2006 till July 2, 2011.
The West Bengal Incentive Scheme, 2004 provides for a
ceiling of the quantum of total incentive that may be
received by an eligible industrial undertaking. Clause
20(e)(iii) of the West Bengal Incentive Scheme, 2004
provides that, the total value of incentive shall not exceed
100% of the fixed capital investment in any case. Clause 10
of the West Bengal Incentive Scheme, 2004 provides for waiver of electricity duty. It provides that, an eligible unit,
for its approved project, will be entitled to waiver of
electricity duty on the electricity consumed, for its
production/operation activity for a period of 5 years, from
the date of commercial production and operation. The
amount of incentive received by the first petitioner under
the Scheme of 2004 is admitted. Such amount is
Rs.2,116.49 Lakhs. 100% fixed capital investment of the
first petitioner is Rs.1,436.64 Lakhs. This figure is also
admitted. The respondents claim that, they have paid the
first petitioner in excess of Rs.6,79.85 Lakhs as the first
petitioner has received such amount in excess of the ceiling
of Rs.1,436.64 Lakhs.
This is the third writ petition at the behest of the
petitioners. The first writ petition was W.P. No. 17953 (W) of
2014. The same was disposed of by an Order dated June
27, 2014 setting aside the demand for Rs.6,79.85 Lakhs
and directing the authorities to pass a fresh order after
hearing the parties. The second writ petition was W.P. No.
19690 (W) of 2014, which was disposed of by an Order dated April 9, 2014. Noticing such two orders, the
impugned order has been passed. The impugned order finds
that, the period of receipt of waiver of the electricity duty
has expired subsequent to five years from the date of grant
of the same. The first petitioner had received excess
payments from the Government. The impugned order has,
therefore, proceeded to direct the first petitioner to pay the
sum in three equal installments within 30 days
commencing from the date of the impugned order. In
default, the impugned order has directed payment of
interest in terms of the rates of the Reserve Bank of India.
The impugned order is reasoned. It has not been
substantiated at the hearing that, under the Bengal
Electricity Duty Act, 1935 a person is entitled to an
automatic benefit of remission of electricity duty payable.
An applicant has to apply for receipt of such benefit. The
application has to be assessed. In the present case, the
officer authorized for such purpose under the Act of 1935
has granted the first petitioner the benefit of duty waiver.
The eligibility certificate issued to the first petitioner specifies that, the receipt of benefits of duty waiver would be
considered as a benefit under the Scheme of 2004. The
petitioner had accepted such position and had acted
thereon. Therefore, the petitioner now cannot be allowed to
contend that, duty waiver under the Act of 1935 is beyond
the Scheme of 2004 and is independent thereto. The first
petitioner having received excess payment, the impugned
order correctly directs the first petitioner to refund the sum
along with interest in the case of default. The State
Government has, therefore, extended a benefit to the first
petitioner under the Scheme of 2004.
In such circumstances, I find no merit in the present
cast. W.P. No. 26172 (W) of 2015 is dismissed. No order as
to costs.
Urgent certified website copies of this order, if applied for,
be made available to the parties upon compliance of the
requisite formalities.