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S.B.C.W.P. No.7606/2010
M/s Manoj Felt Finishing Works Vs. State of Rajasthan & Ors.
&
Along-with connected 18 writ petitions.
Common Order dt: 08/11/2011
1/8
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JODHPUR
ORDER
S. B. Civil Writ Petition No.7606/2010 M/s Manoj Felt Finishing Works Vs. State of Rajasthan & Ors.
& [Along with connected 18 writ petitions (See Schedule)] DATE OF ORDER ::: 08th November 2011 PRESENT HON'BLE DR. JUSTICE VINEET KOTHARI Mr. Pankaj Kumar Bohra & Mr. Neeraj K. Jain, for the petitioners. Mr. Lokesh Mathur for } Mr. V.K. Mathur, }- for the respective respondents.
Mr. Ravi Bhansali }
---
1. By these writ petitions, the petitioners have challenged the levy of imposition of urban cess under the provisions of Rajasthan Finance Bill, 2010 (Bill No.3 of 2010) under Section 3-C inserted in the Rajasthan Electricity (Duty) Act, 1962. The said provision of Section 3-C, is reproduced hereunder for ready reference:
"3C. Levy of urban cess.- (1) There shall be levided for, and paid to, the State Government on the energy consumed by a consumer or by a person, other than a supplier generating energy for his own use or consumption, a cess to be called "urban cess" at the rate of ten paise per unit:
Provided that no cess under this section shall be levied on the energy,-
(a) consumed by the Government of India;
(b) consumed in the construction, maintenance or S.B.C.W.P. No.7606/2010 M/s Manoj Felt Finishing Works Vs. State of Rajasthan & Ors.
& Along-with connected 18 writ petitions.
Common Order dt: 08/11/2011 2/8 operation of any Railway by the Government of India;
(c) consumed by a cultivator in agriculture operations;
(d) consumed in areas outside the municipal area in the State;
(e) consumer in domestic category in municipal area where consumption does not exceed 100 units per month;
(f) consumed by the following classes of institutions, namely:-
(i) hospitals or dispensaries, which are not maintained for private gain,
(ii)recognized educational institutions, which are not maintained for privgate gain,
(iii)places of public worship, subject to the condition that the exemption under this sub-clause shall not be applicable to energy consumed in buildings or part of buildings, used for commercial purposes;
(g) generated at voltage not exceeding 100 volts.
(2) The provisions of this Act or the rules made thereunder shall, so far as may be, apply in relation to levy, payment, interest, computation and recovery of the cess payable under sub-section (1) as they apply to levy, payment, interest, computation and recovery of electricity duty payable under this Act.
(3) The cess collected under this section shall be utilized for the purpose of providing basic amenities like street lighting, sanitation, maintenance of roads and energy conservation in municipal areas.
Explanation.- For the purposes of this section "municipal area" means the municipal area as defined in S.B.C.W.P. No.7606/2010 M/s Manoj Felt Finishing Works Vs. State of Rajasthan & Ors.
& Along-with connected 18 writ petitions.
Common Order dt: 08/11/2011 3/8 clause (xxxix) of section 2 of the Rajasthan Municipalities Act, 2009 (Act No.18 of 2009)."
2. Learned counsel for the respondents, Mr. Lokesh Mathur for V.K. Mathur and Mr. Ravi Bhansali for J.V.V.N. Ltd. and A.V.V.N.
Ltd., submitted that said Rajasthan Finance Bill, 2010 was enacted into Act and it received the assent of His Excellency the Governor on 01.04.2010 and, therefore, the impugned Finance Bill, 2010 did not survive thereafter. They also submitted that the validity of imposition of similar levy known as 'Water Cess' under Section 3B of the Act of 1962, was challenged by certain petitioners in a batch of writ petitions before the Division Bench of this Court; and the Division Bench by its judgment dated 14.07.2011 rendered in D.B. Civil Writ Petition No.785/2010-Sangam (India) Ltd. Vs. The State of Rajasthan & Ors. including the Ajmer Vidut Vitran Nigam Ltd. and Jodhpur Vidut Vitran Nigam Ltd., the Division Bench has up-held the validity of said imposition of 'Water Cess' under Section 3B of the same enactment i.e. Electricity (Duty) Act, 1962 inserted by Rajasthan Finance Act, 2010 in that judgment dated 14.07.2011 in the following terms and the relevant abstract of the said judgment is reproduced herein below:
"The submission of the petitioners is that before imposing cess in question, the Commission constituted vide the Act of 1999 ought to have been consulted and since the Commission was not consulted, the action of imposing cess is invalid. There is no force in the said submission. The S.B.C.W.P. No.7606/2010 M/s Manoj Felt Finishing Works Vs. State of Rajasthan & Ors.
& Along-with connected 18 writ petitions.
Common Order dt: 08/11/2011 4/8 Commission is required to be consulted with respect to the matters enumerated in Section 9, which provides the functions, proceedings and powers of the Commission. Section 9 (1) (a) empowers the Commission to determinate the tariff for electricity in the manner provided in section 26. Section 26 deals with the determination of tariff by the Commission. The Commission has power to determine the tariff in accordance with the provisions of the Act of 1999. However, in our opinion, cess in question is levy of tax on consumption of energy and not a tariff of electricity. Consequently, there is no encroachment on the power of the Commission.
It is also submitted relying upon the water cess Act of 1977 that field is occupied by the Central legislation and thus, the provisions of Section 3B of the Act of 1962 imposing cess could not have been enacted by the State legislature without obtaining the assent of the President of India. The Cess Act of 1977 is an Act to provide for the levy and collection of the cess on water consumed by the persons carrying on certain industries and by local authorities with a view to augment the resources of the Central Board and State Boards for the Prevention and Control of Water Pollution constituted under the Water (Prevention and Control) of Pollution Act, 1974. The cess Act of 1977 has totally a different role to play. It occupies a totally different field. The State Legislature has clearly inserted Section 3B in the Act of 1962 by way of Section 12 of the Finance Act of 2009. The levy of cess is covered under Entry 53 of List II of Seventh Schedule. It is a cess on consumption of electricity for conservation of water. It is not a cess on water consumption. Thus, in the light of applying the doctrine of pith and substance laid down by the Apex Court in the case of S.B.C.W.P. No.7606/2010 M/s Manoj Felt Finishing Works Vs. State of Rajasthan & Ors.
& Along-with connected 18 writ petitions.
Common Order dt: 08/11/2011 5/8 Keshoram Industries Ltd. (supra), we are of the considered opinion that there is no encroachment on the Cess Act of 1977. The Cess Act of 1977 has totally a different field to operate and that was not a tax imposed upon the consumption of water. By mere fact that the State proposed to augment its revenue for the purpose of conservation of water, it cannot be said that there is any encroachment on the Cess Act of 1977 or field reserved to the Union List in any manner whatsoever.
Thus, we are of the considered opinion that provisions of Section 3B inserted in the Rajasthan Electricity (Duty) Act, 1962 by virtue of Section 12 of the Rajasthan Finance Act, 2009 imposing water conservation cess cannot in any maner be said to be arbitrary or illegal or violative of Articles 14, 19 (1) (g), 265 and 300A of the Constitution. It is open to the State Government to augment its revenue by imposing tax as provided under various entries in List II of the Seventh Schedule. We are not impressed by the submissions raised by the petitioners that there is no co-relation of consumption of energy with the water conservation and hence, provisions are arbitrary. There is water crisis and conservation of water is need of the day. The water conservation is necessary for existence of human being and various activities which are taking place. Thus, imposition of cess on consumption of electricity for conservation of water cannot be said to be arbitrary. It is within the legislative competence of the State. The cess in question is in the nature of tax and not a fee as suggested by the petitioners.
Submission was also raised by one of the learned counsel for the petitioners that provisions imposing cess were enacted for the temporary measures for the Financial Year 2009 and thus, provisions have now come to an end. There is S.B.C.W.P. No.7606/2010 M/s Manoj Felt Finishing Works Vs. State of Rajasthan & Ors.
& Along-with connected 18 writ petitions.
Common Order dt: 08/11/2011 6/8 no force in the said submission. The provisions of Section 3B inserted in the Act of 1962 by virtue of Section 12 of the Finance Act, 2009 are not temporary one. They are not confined to the year in question. Merely by the fact that decision was taken in the finance policy introduced in 2009, it does not become temporary in nature.
For the reasons stated above, there is no merits in the writ petitions and the same are hereby dismissed. No costs. (Kailash Chandra Joshi), J. (Arun Mishra), CJ"
3. Learned counsel for the respondents, therefore, urged that imposition of urban cess in the present matter providing for funds of sanitation and maintenance and various other purposes by the local bodies, also deserves to be upheld on the same grounds as the Division Bench has done in Sangam (I) Ltd.'s case.
4. Upon this, the learned counsel for the petitioners, Mr. Pankaj Bohra, submitted that there are certain Supreme Court decisions, which were not cited before the Division Bench while rendering the judgment on 14.07.2011 in Sagam India Ltd.'s case and also that the imposition of urban cess being for different objectives but 'water cess' was for water conservation by the State, is a different matter and, therefore, these writ petitions can be entertained by the Single Bench whereas in the present cases also the validity of such levy has been challenged and the enactment itself has been challenged in the alternative.
5. This Court is not impressed with the submissions made by the learned counsel for the petitioners.
S.B.C.W.P. No.7606/2010 M/s Manoj Felt Finishing Works Vs. State of Rajasthan & Ors.
& Along-with connected 18 writ petitions.
Common Order dt: 08/11/2011 7/8
6. In the opinion of this Court, the levy of urban cess for sanitation and maintenance and various other purposes and objectives, by the same Act, stand on the same footings as would water cess for water conservation, the levy of which has been up-held by the Division Bench of this Court in the case of Sangam (I) Ltd.
(supra), decided on 14.07.2011.
7. At the request of the learned counsel for the petitioners, therefore, these petitions are allowed to be withdrawn with liberty to them to challenge the levy of urban cess by Section 3C in Electricity (Duty) Act, 1962 by Rajasthan Finance Act, 2010, which received the assent of His Excellency the Governor, on 01.04.2010, namely, the Rajasthan Finance Act, 2010 before the Division Bench of this Court on appropriate grounds if it choses to file such writ petition challenging vires of such levy of urban cess under Section 3C of the Act before the Division Bench.
8. This Court sitting singly cannot examine the contentions already raised and decided by the Division Bench of this Court, even on the levy of urban cess because the judgment of water cess under Section 3B applies with same force to the imposition of urban cess under Section 3C of the same Act also.
9. Consequently, these writ petitions are dismissed as withdrawn with aforesaid liberty to the petitioners. No costs.
(DR. VINEET KOTHARI), J.
DJ/-
7 - 8 and C-1 to C-20 S.B.C.W.P. No.7606/2010 M/s Manoj Felt Finishing Works Vs. State of Rajasthan & Ors.
& Along-with connected 18 writ petitions.
Common Order dt: 08/11/2011 8/8 SCHEDULE (1) S.B. Civil Writ Petition No.7614/2010 M/s Manoj Dying Pvt. Ltd. Vs. State of Rajasthan & Ors.
& (2) S. B. Civil Writ Petition No.6845/2010 M/s Sarda Udyog Vs. State of Rajasthan & Ors.
& (3) S. B. Civil Writ Petition No.5834/2010 M/s Girnar Textile P. Ltd. Vs. State of Rajasthan & Ors.
& (4) S. B. Civil Writ Petition No.6134/2010 M/s Gapnatp Dyetex P. Ltd. Vs. State of Rajasthan & Ors.
& (5) S. B. Civil Writ Petition No.6135/2010 M/s Ridhi Sidhi Mills (I) P. Ltd. Vs. State of Rajasthan & Ors.
& (6) S. B. Civil Writ Petition No.6279/2010 M/s Gogad Granite P. Ltd. Vs. State of Rajasthan & Ors.
& (7) S. B. Civil Writ Petition No.6282/2010 M/s Gogad Fabrics P. Ltd. Vs. State of Rajasthan & Ors.
& (8) S. B. Civil Writ Petition No.6283/2010 M/s Gogad Fabrics P. Ltd. Vs. State of Rajasthan & Ors.
& (9) S. B. Civil Writ Petition No.6284/2010 M/s Gogad Fabrics P. Ltd. Vs. State of Rajasthan & Ors. & (10) S. B. Civil Writ Petition No.6850/2010 M/s Sarda Gum & Chemicals Vs. State of Rajasthan & Ors.
& (11) S. B. Civil Writ Petition No.6851/2010 M/s Sarda Gum & Chemicals Vs. State of Rajasthan & Ors.
& (12) S. B. Civil Writ Petition No.7301/2010 M/s Bherwa Textiles Vs. State of Rajasthan & Ors.
& (13) S. B. Civil Writ Petition No.7476/2010 M/s Rajasthan Industries Vs. State of Rajasthan & Ors.
& (14) S. B. Civil Writ Petition No.7302/2010 M/s Gulecha Printing Works Vs. State of Rajasthan & Ors.
& (15) S. B. Civil Writ Petition No.6852/2010 M/s Sarda Strach Pvt. Ltd. Vs. State of Rajasthan & Ors.
& (16) S. B. Civil Writ Petition No.7477/2010 M/s Mahalaxmi Cotton Mills Vs. State of Rajasthan & Ors.
& (17) S. B. Civil Writ Petition No.7479/2010 M/s Balar Fabrics Pvt. Ltd. Vs. State of Rajasthan & Ors.
& (18) S. B. Civil Writ Petition No.7480/2010 M/s Bharat Vijay Industries Vs. State of Rajasthan & Ors.