The State of Maharashtra Vs Shri Vile Parle Kelvani Mandal

The State of Maharashtra Vs Shri Vile Parle Kelvani Mandal Case

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7319 OF 2021

The State of Maharashtra ..Appellant (S)

Versus

Shri Vile Parle Kelvani Mandal & Ors. ..Respondent (S)

J U D G M E N T

M. R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned

judgment and order dated 28.02.2019 passed by the High

Court of Judicature at Bombay in Writ Petition No.2961 of

2018, by which the High Court has allowed the said writ

petition preferred by respondents No.1 to 10 herein

original writ petitioners (hereinafter referred to as original

writ petitioners – education institutions) and held that the

original writ petitioners are exempted from payment of

electricity duty, the State of Maharashtra has preferred the

present appeal.

2. That the original writ petitioners are the education

institutions run and manage by original writ petitioner

No.1 – Shri Vile Parle Kelvani Mandal, a society registered

under the Societies Registration Act, 1860 and also a

public charitable trust registered under the Maharashtra

Public Trusts Act, 1950. That the writ petitioners have

taken electricity connections for power supply to their

education institutions from respective power supply

companies. That prior to 01.09.2016, the charitable

education institutions were exempted from payment of

electricity duty levied on the consumption charges or the

energy consumption for the purposes of or in respect of a

school or college or institution imparting education or

training, students' hostels, hospitals, nursing homes etc.

as per Section 3(2)(iii) of the Maharashtra Electricity Duty

Act, 1958. That in the year 2018, the respective electricity

supply companies levied the electricity duty pursuant to a

letter from the Industries, Energy and Labour Department,

Government of Maharashtra stating that as per

Maharashtra Electricity Act, 2016, charitable institutions

registered under the Bombay Public Trusts Act, 1950 (now

known as Maharashtra Public Trusts Act, 1950) for the

purpose of or in respect of school or college imparting

education or training in academic or technical subjects are

not entitled for electricity duty exemption with effect from

1st September, 2016. The respective power supply

companies levied electricity duty at 21% and the bills were

raised accordingly on original writ petitioners and their

education institutions for the period post 01.09.2016.

Aggrieved by the levy of electricity duty on the educational

charitable institutions run by the original writ petitioner

No.1 – respondent No.1 herein, original writ petitioners

preferred the writ petition before the High Court. By the

impugned judgment and order, the Division Bench of the

High Court has allowed the said writ petition and has set

aside the levy of electricity duty on writ petitioners and

consequently has set aside respective electricity bills

levying the electricity duty on consumption of electricity

charge.

3. Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the High Court, the State of

Maharashtra has preferred the present appeal.

4. Shri Sachin Patil, learned counsel appearing on behalf of

the State has vehemently submitted that in the facts and

circumstances of the case, the High Court has committed a

grave error in holding that the original writ petitioners –

charitable education institutions are not liable to pay the

electricity duty.

4.1 It is further submitted that in absence of challenge to the

relevant provisions of the Maharashtra Electricity Act,

2016, the High Court ought not to have allowed the writ

petition and ought not to have set aside the levy of

electricity duty levied from charitable education

institutions like the original writ petitioners.

4.2 It is further submitted by Shri Sachin Patil, learned

counsel appearing on behalf of the State that the High

Court has not properly appreciated and considered the

relevant provisions pre and post the Maharashtra

Electricity Act, 2016.

4.3 It is submitted that as per Section 3(2)(a)(iiia) of the

Maharashtra Electricity Duty Act, 1958, the charitable

intuitions registered under the Bombay Public Trusts Act,

for the purpose of, or in respect of, school or college,

imparting education or training in academic or technical

subjects (save in respect of premises used for residential

purposes) were exempted from levy of the electricity duty

on the consumption charges or the units of energy

consumed. It is submitted that however, on enactment of

the Maharashtra Electricity Duty Act, 2016 which repealed

the earlier the Maharashtra Electricity Duty Act, 1958, no

such exemption from levy/payment of electricity duty has

been provided to such charitable education institutions.

4.4 It is submitted that the High Court has failed to consider

there is no provision, similar to the Repealed Act of 1958

(the Maharashtra Electricity Duty Act, 1958) in the new

Act, 2016 (Maharashtra Electricity Duty Act, 2016), and

the charitable education institutions whether registered

before or after coming into the new Act of 2016, are not

entitled to the exemption from payment of electricity duty.

4.5 It is further submitted that the High Court has not

properly appreciated or considered that by virtue of the

statutory provisions under the Repealed Act of 1958, the

charitable education institutions were enjoying concession

from payment electricity consumption duty/ electricity

consumption charges and therefore there was no need to

issue a specific order in their favour under the Repealed

Act of 1958. It is submitted that therefore, if any order had

been issued by the department in favour of any institution,

it is neither an order as contemplated under Repealed Act,

1958 nor it is saved from proviso of Section 4 of the

Maharashtra Electricity Duty Act, 2016. It is submitted

that therefore, after commencement of the new Act of 2016,

such order does not confer right upon the charitable

education institutions to claim exemption.

4.6 It is further submitted that as such the language used in

the new Act of 2016 with respect to the exemption/levy of

electricity duty is very clear and unambiguous. It is

submitted that the words used are plain and simple and

therefore the same should be read with the intention of the

legislature particularly in favour of revenue. It is submitted

that as per the law laid down by this Court in catena of

decisions a taxing statute is to be construed in favour of

assesse but an exception or an exemption provision from a

taxing statute has to be construed strictly. It is submitted

that even if there is any ambiguity in that regard the issue

must be answered in favour of revenue.

4.7 In support of the above submissions, learned counsel

appearing on behalf of the State has relied on the following

decisions of this Court: Commr. of Customs Vs. Dilip

Kumar & Co., (2018) 9 SCC 1; Central Public

Information Officer, Supreme Court of India Vs.

Subhash Chandra Agarwal, (2020) 5 SCC 481; Essar

Steel India Ltd. & Anr. Vs. State of Gujarat & Anr.,

(2017) 8 SCC 357; Star Industries Vs. Commr. of

Customs (Imports), (2016) 2 SCC 362; Giridhar G.

Yadalam Vs. Commissioner of Wealth Tax & Another,

(2015) 17 SCC 664; Godrej & Boyce Mfg. Co. Ltd. Vs.

Deputy Commissioner of Income Tax & Anr., (2017) 7

SCC 421.

5. Making the above submissions and relying on the aforesaid

decisions of this Court, it is prayed to allow the present

appeal and quash and set aside the impugned judgment

and order passed by the High Court.

6. The present appeal is vehemently opposed by Shri Shekhar

Naphade, learned Senior Advocate, appearing on behalf of

the original writ petitioners – respondents No.1 to 10

herein.

6.1 It is vehemently submitted by Shri Shekhar Naphade,

learned Senior Advocate appearing on behalf of the original

writ petitioners that in the facts and circumstances of the

case and considering the fact that the original writ

petitioners are charitable education institutions, the High

Court has rightly held that they are exempted from

payment of electricity duty.

6.2 It is submitted by Shri Naphade, learned Senior Advocate

appearing on behalf of the original writ petitioners that as

observed by this Court in the case of C.W.S. (India) Ltd.

Vs. Commissioner of Income Tax, 1994 Supp (2) SCC

296 (para 10), where a literal interpretation leads to absurd

result, the wording of the statute can be modified to accord

with the intention of the legislature and to avoid absurdity.

6.3 It is submitted that if the interpretation canvassed by the

state is accepted then it will lead to absurdity and manifest

injustice as school/colleges etc. run by the local authority

will fall within the purview of Section 3(2)(iii) of 2016 Act,

while those run by the statutory university or charitable

institution registered under Bombay Trusts Act, 1950 (now

known as Maharashtra Public Trusts Act, 1950), would fall

outside the ambit of Section 3(2)(iii). It is submitted that as

such there is no essential difference between

schools/colleges etc. run by the statutory university or

institution registered under the Maharashtra Public Trusts

Act, 1950 and those run by the local authority. It is

submitted that such absurdity or injustice cannot be the

intention of the legislature.

6.4 It is further submitted by Shri Naphade, learned Senior

Advocate appearing on behalf of the original writ

petitioners that there is always a presumption that the

legislature does not intend to violate Article 14 of the

Constitution of India. It is submitted that as per the case

on behalf of the State, Section 3(2)(iii) of 2016 Act covers

only schools/colleges etc. of the local authority and those

run by the statutory university or by private institutions

are outside the scope of Section 3(2)(iii) of 2016 Act. It is

submitted that this would lead to discrimination and

arbitrariness. It is submitted that who runs the

educational institution cannot be the intelligible differentia

for the purpose of classification. It is submitted that if such

an interpretation is accepted then Section 3(2)(iii) would be

ultra vires Article 14 of the Constitution. It is submitted

that while interpreting Section 3(2)(iii) of 2016 Act, Article

14 must be considered and interpretation which would

accord with the mandate of Article 14 should be adopted.

Reliance is placed on the decision of this Court in the case

of B.R. Enterprises Vs. State of U.P. & Ors., (1999) 9 SCC

700 (para 81).

6.5 It is further submitted that even otherwise there is

presumption that legislature does not make radical

changes in existing law. Reliance is placed on the decision

of this Court in the case of Byram Pestonji Gariwala Vs.

Union Bank of India & Ors., (1992) 1 SCC 31 (para 29

38).

It is submitted that it is not in dispute that Section 3(2)

(iii a) of 1958 Act clearly provided that the electricity duty

shall not be imposed on schools/colleges etc. run by

charitable institutions registered under the Maharashtra

Public Trusts Act, 1950. It is submitted that there is no

dispute that the schools/colleges etc. of the writ petitioners

fall within the purview the purview of Section 3(2)(iii a) of

1958 Act. It is submitted that therefore there is nothing in

2016 Act which warrants a conclusion that there is a

radical change in law leading to duty being imposed on the

educational institutions being run by the original writ

petitioner.

6.6 Pointing out the following aspects, it is submitted by Shri

Naphade learned Senior Advocate appearing on behalf of

the original writ petitioners, that as such there are no

radical changes between the Maharashtra Electricity Duty

Act, 1958 (1958 Act) and the Maharashtra Electricity Duty

Act, 2016 (2016 Act). It is submitted that under Section

3(2) of 1958 Act, no duty could be imposed on the following

entities:

(a) Government of Maharashtra [Section 3(2)(i)]

(b) Local authorities carrying on specified activities

[Section 3(2)(ia)]

3(2)(ib)]

(d) Tramway company [Section 3(2)(ii)]

(e) Entity generating electricity for the purpose of

supplying it for the use of vehicles and vessels.

[Section 3(2)(iv)]

Note under 1958 Act no duty could be imposed on

the Central Government due to the provisions of

Article 285 of the Constitution.

6.6.1 It is further submitted that under Section 3(2) of 2016 Act

no duty can be imposed on the following entities:

(a) State Government [Section 3(2)(i)]

(b) Central Government [Section 3(2) (ii)]

This is by way abundant caution as no duty can be

imposed on the Central Government due to Article

285 of the Constitution.

(v)]

(d) Generating Company [Section 3(2)(vi)]

(e) Entity generating electricity for use of vehicles and

vessels [Section 3(2)(vii)]

Note – At present there is Tramway company in the

State of Maharashtra. Thus there is no change in

2016 Act as regards the entities who are not subject

to imposition of duty.

6.6.2 Further, under Section 3(2) of the 1958 Act no duty could

be imposed on following activities:

(a) Educational institutions run by local authority or

statutory university, or charitable institution registered

under Bombay Trusts Act, 1950. [Section 3(2)(ia), 3(2)

(iii) and 3(2)(iiia)]

(b) Local authority using electricity for hospital, nursing

home, dispensary, clinic, public street lighting, public

water works, system of public sewers or drains.

[Section 3(2)(ia)]

construction, maintenance, or operation of any

generating, transmitting and distributing system.

[Section 3(2)(ib)]

(d) Generation of electricity for the purpose of supplying it

for the use of vehicles or vessels. [Section 3(2)(iv)]

(e) Where the energy is generated at a voltage not

exceeding 100 volts. [Section 3(2)(v)]

6.7 It is submitted that both under the 1958 Act and 2016 Act,

the premises used by entities specified under Section 3(2)

for the purpose of residence are subject to imposition of

duty.

6.8 It is submitted that aforesaid analysis clearly shows that

the entities on whom no duty can be imposed have

remained the same subject to the rider that if the premises

are used for residence, duty can be imposed.

6.9 It is submitted that the only question is whether

educational activities carried on by local authorities,

statutory university or a charitable institution registered

under the Bombay Trusts Act, 1950 are within the purview

of Section 3(2) of the 2016 Act?

6.10 It is submitted that it is not in dispute that under the 1958

Act, the educational institutions carried out by local

authorities, statutory university, or the charitable

institutions were not subject to imposition of duty. The

other activities which are not subject to imposition of

electricity duty, both under the 1958 Act and 2016 Act are

as follows:

(a) Specified activities by local authorities [See Section

3(2)(ia) of 1958 Act Section 3(2)(iii) of 2016 Act.

(b) Generation of electricity for construction, maintenance

and operation of any generating, transmitting and

distrusting system by licensee. [See Section 3(2)(ib) of

1958 Act and Section 3(2)(v) of 2016 Act.

for the use of vehicles or vessels [See Section 3(2)(iv) of

1958 Act and Section 3(2) (vii) of 2016 Act.

(d) Generation of electricity at a voltage not exceeding 100

volts [See Section 3(2)(v) of the 1958 Act and Section

3(2)(viii) of 2016 Act.

6.11 It is submitted that thus entities who are not subject to

imposition of duty have remained the same, both under

1958 Act and 2016 Act and that other activities

enumerated herein above have remained same, both under

1958 Act and 2016 Act. It is submitted that therefore, it is

difficult to accept that in respect of educational activities a

radical change is brought about by 2016 Act by excluding

educational institutions run by statutory university or by

charitable institutions. It is submitted that either it is a

case of Casus Omissus or a case of bad drafting of 2016

Act.

6.12 It is submitted that 1958 Act clearly indicates that it was

the policy of the legislature to exclude the educational

activities run by specified entities from imposition of duty.

There is nothing in the 2016 Act which would indicate that

there is a radical departure in respect of educational

activities. Some of the activities which are not subject to

imposition of duty both under the 1958 Act and 2016 Act

are commercial in nature. It is submitted that therefore if

that be so then why the legislature would depart from its

earlier policy in respect of educational activities as

promotion of education is in public interest. It is submitted

that if the commercial activities are not subject to

imposition of duty then it would be unreasonable on the

part of the legislature to impose duty on noncommercial

activity of imparting education. It is submitted that policy

of the legislature is presumed to be reasonable so that it

does not fall foul principle of unreasonableness or

arbitrariness.

6.13 Lastly, it is submitted by Shri Naphade learned Senior

Advocate appearing on behalf of the writ petitioners, that in

the present case the doctrine of last antecedent may also

be applied. It is submitted that first part of Section 3(2)

covers all educational activities irrespective of the entity

which carries on such activities. It is submitted that in the

1958 Act in Section 3(2), the following words used are “for

the purposes of or in respect of school ……. Students

hostel” and in the second part of Section 3(2) deals with

activities carried on by the local authorities. It is submitted

that in the 2016 Act, the expression “Run by any local

bodies……State of Maharashtra” does not qualify the

educational activities but it qualifies activities namely

“Hospitals, nursing homes…….a part of system”. It is

submitted that if the doctrine of Last Antecedent is applied

to the present case, the only possible conclusion is that the

expression “Run by any local bodies” does not qualify

educational activities referred to in first part of Section 3(2)

but qualifies the second part i.e. the other activities.

6.14 It is further submitted that Electricity Duty Act is a taxing

statute. Therefore, it must be strictly construed and if there

is any ambiguity the same must be resolved in favour of

the assessee. The legislature is covering all educational

activities in one provision contained in Section 3(2)(iii)

irrespective of the entity which carries on the activities.

While doing so the ambiguity has crept in drafting. It is

submitted that the benefit of ambiguity must lean in favour

of the assessee rather than the revenue.

6.15 Making the above submissions and relying on the decisions

of this Court, it is prayed to dismiss the present appeal.

7. We have heard the learned counsel appearing on behalf of

the respective parties at length.

8. The short question which is posed for the consideration of

this Court is whether the original writ petitioners being

charitable education institutions registered under the

provisions of the Public Trusts Act (the Maharashtra Public

Trusts Act, 1950) are entitled to the exemption from

payment of electricity duty post 01.09.2016 i.e. as per the

provisions of the Maharashtra Electricity Duty Act, 2016?

9. While answering the aforesaid question/issue, law on how

to interpret and/or consider the statutory provisions in the

taxing statute and the exemption notifications is required

to be analysed first.

9.1 In the case of Dilip Kumar & Company (supra), fivejudge

bench of this Court has held that in every taxing statute ––

the charging, the computation and exemption provisions at

the threshold stage should be interpreted strictly. In case

of ambiguity in case of charging provision, the benefit

necessarily must go into favour of the subject/assessee.

This means that the subject of tax, the person liable to pay

tax and the rate at which the tax is to be levied have to be

interpreted and construed strictly. If there is any ambiguity

in any of these three components, no tax can be levied till

the ambiguity or defect was removed by the legislature [See

pages 53 to 55 in Dilip Kumar & Company]. However, in

case of exemption notification or clause, same is to be

allowed based wholly by the language of the notification,

and exemption cannot be gathered by necessary

implication, or on a construction different from the words

used by reference to the object and purpose of granting

exemption [See Hansraj Gordhandas Vs. H.H. Dave,

Assistant Collector of Central Excise Customs, Surat &

Ors., AIR 1970 SC 755]. Further it’s for the assessee to

show by construction of the exemption clause/notification

that it comes within the purview of exemption. The

assessee/citizen cannot rely on ambiguity or doubt to

claim benefit of exemption. The rationale is not to widen

the ambit at the stage of applicability. However, once the

hurdle is crossed, the notification is constructed liberally

[See Collector of Central Excise, BombayI & Anr. vs.

Parle Exports (P) Ltd., (1989) 1 SCC 345 and Union of

India & Ors. vs. Wood Papers Ltd. & Anr., (1998) 4 SCC

256]. Thus, distinction can be made between the

substantive requirements that require strict compliance –

noncompliance of which would render the assessee

ineligible to claim exemption, and the procedural or

compliance provision which can be interpreted liberally

[See paragraphs 64 to 65 in Dilip Kumar & Company].

9.2 Essar Steel India Ltd. & Anr. was a case relating to grant

of exemption under Section 3(2)(vii)(a) from payment of

electricity duty under the 1958 Act. The court relied on

several decisions on interpretation of notification in nature

of exemption, to hold that the statutory conditions for

grant of exemption can neither be tinkered with nor

diluted. The exemption notification must be interpreted by

their own wordings, and where the wordings of notification

with regard the construction is clear, it has to be given

effect to. If on the wordings of the notification benefit is not

available, then the court would not grant benefit by

stretching the words of the notification or by adding words

to the notification. To interpret the exemption notification

one should go by the clear, unambiguous wordings thereof.

These principles were applied in Essar Steel India Ltd. &

Anr. to deny benefit of Section 3(2)(vii)(a) of the 1958 Act,

as the condition of generating energy jointly with another

undertaking was not fulfilled.

9.3 In case of Star Industries, it was held that the eligibility

criteria laid down for exemption notification is required to

be construed strictly, and once it is found that applicant

satisfies the same, the exemption notification should be

construed liberally. Reference was made to the decision

Novopan India Ltd. vs. CCE and Customs, 1994 Supp

(3) SCC 606 and the Constitution Bench decision in

Hansraj Gordhandas vs. H.H. Dave, Assistant Collector

of Central Excise Customs, Surat & Ors. (supra), which

decisions have been noted and elucidated by this Court in

Dilip Kumar & Company. Therefore, in the context of

exemption notification there is no new room for

intendment. Regard must be to the clear meaning of the

words. Claim to exemption is governed wholly by the

language of the notification, which means by plain terms of

the exemption clause. An assessee cannot claim benefit of

exemption, on the principle that in case of ambiguity a

taxing statue must be construed in his favour, for an

exception or exemption provision must be construed

strictly.

9.4 In the case of Giridhar G. Yadalam (supra), it is observed

and held that in taxing statute, it is the plain language of

the provision that has to be preferred where language is

plain and is capable of one definite meaning. It is further

observed that the strict interpretation to the exemption

provision is to be accorded. It is observed that the

purposive interpretation can be given only when there is

some ambiguity in the language of the statutory provision

or it leads to absurd results. In paragraph 16, it is

observed and held as under:

“16. We have already pointed out that on the

plain language of the provision in question, the

benefit of the said clause would be applicable

only in respect of the building “which has been

constructed”. The expression “has been

constructed” obviously cannot include within its

sweep a building which is not fully constructed

or in the process of construction. The opening

words of clause (ii) also become important in this

behalf, where it is stated that “the land occupied

by any building”. The land cannot be treated to

be occupied by a building where it is still under

construction. If the contention of Mr Jain is

accepted, an assessee would become entitled to

the benefit of the said clause, at that very

moment, the commencement of construction

even with construction the moment one brick is

laid. It would be too farfetched, in such a

situation, to say that the land stands occupied

by a building that has been constructed thereon.

Even Mr Jain was candid in accepting that when

the construction of building is still going on and

is not completed, literally speaking, it cannot be

said that the building “has been constructed”. It

is for this reason that he wanted us to give the

benefit of this provision even in such cases by

reading the expression to mean the same as “is

being constructed”. His submission was that the

moment construction starts the urban land is

put to “productive use” and that entitles the land

from exemption of wealth tax. This argument of

giving socalled purposive interpretation has to

be rejected for more than one reasons. These are:

(i) In taxing statute, it is the plain language of the

provision that has to be preferred where

language is plain and is capable of one definite

meaning.

(ii) Strict interpretation to the exemption

provision is to be accorded, which is the case at

hand.

(iii) The purposive interpretation can be given

only when there is some ambiguity in the

language of the statutory provision or it leads to

absurd results. We do not find it to be so in the

present case.”

9.5 In the case of Godrej & Boyce Mfg. Co. Ltd. (supra), it is

observed and held by this Court that where the words of

the statute are clear and unambiguous, recourse cannot be

had to principles of interpretation other than the literal

view. It is further observed that it is the bounden duty and

obligation of the court to interpret the statute as it is. It is

further observed that it is contrary to all rules of

construction to read words into a statute which the

legislature in its wisdom has deliberately not incorporated.

10. Applying the law laid down by this Court in the aforesaid

decisions to the facts of the case on hand, it is required to

be considered whether post 01.09.2016 and on coming into

force the 2016 Act, still, the writ petitioners – charitable

education institutions registered under the Public Trusts

Act and or the Societies Registration Act are entitled to the

exemption from payment of electricity duty?

11. For the aforesaid purpose, the charging

sections/exemption provisions under the pre Act of 2016

and post Act of 2016 are required to be referred to. Section

3 of the Maharashtra Electricity Duty Act, 1958, which was

applicable prior to coming into force of the Maharashtra

Electricity Duty Act, 2016, relevant for our purpose reads

as under:

“3. (1) Subject to the provisions of subsection

(2), there shall be levied and paid to the State

Government on the 1[consumption charges or

the] units of energy consumed (excluding losses

of energy sustained in transmission and

transformation by a licensee before supply to a

consumer), a duty (hereinafter referred to as"

electricity duty") at the rates specified in the

Schedule to this Act.

(2) (a) Electricity duty shall not be leviable on the

3[consumption charges or the] units of energy

consumed,—

(i) by the Government of Maharashtra (save in

respect of premises used for residential

purposes);

(ia) by or in a respect of any municipal

corporation, municipality, municipal committee,

town committee, notified area committee,

Cantonment Board, Zilla Parishad or village

panchyat constituted under any law for the time

being in force in the State, for the purpose of, or

in respect of 5

[ a school or college imparting

education or training in academic or technical

subjects, a hospital, nursing home, dispensary,

clinic, public street lighting, public water works

and system of public sewers or drains (save in

respect of premises used for residential

purposes);

(ib) by any licensee for purposes directly

connected with construction, maintenance or

operation of any generating, transmitting and

distributing system of the licensee;

(ii) by a tramway company, save in respect of

premises used for residential and office

purposes;

(iii) by or in respect of any statutory University

and institutions run by the statutory University

for the purpose of or in respect of education,

research and training (save in respect of

premises used for residential purposes);

(iiia) by or in respect of charitable institution

registered under the Bombay Public Trusts Act,

1950, for the purpose of, or in respect of, school

or college imparting education or training in

academic or technical subjects (save in respect of

premises used for residential purposes);”

That thereafter the Maharashtra Electricity Duty Act, 2016

has been enacted, which has come into effect from

08.08.2016. Section 3 of the 2016 Act, relevant for our

purpose reads as under:

“3. (1) Subject to the provisions of subsection

(2), there shall be levied and paid to the State

Government, on the consumption charges or the

units of energy consumed, a duty (hereinafter

referred to as “Electricity Duty”) at the rates

classified as per the Tariff Schedule of the

Commission, from time to time, on the basis of

use of the premises by the consumer on whose

name energy is supplied by the licensee, or a

consumer who is consuming energy produced

from an independent source other than that

supplied by the licensee, for his own use as

specified in the Schedules, which are based on

the following classifications :––

(a) the consumption charges where energy is

supplied by the licensee;

Explanation.–– For the purpose of this subsection, “use of the premises by the consumer

on whose name energy is supplied” means the

basis of purpose for which the consumer in

whose name supply has been released and

measured by the meter installed at point of

supply by the licensee, on which the

consumption charges are billed as per the

tariff, however, in huge industrial parks,

commercial premises or malls where electricity

is supplied at single point or as bulk

consumers and further it is redistributed as

one of the utility service provided by the owner

of the premises to the end users occupying the

area on lease or rent or otherwise, whose

purpose of use of electricity at the user’s end

may vary categorically;

(b) units of energy consumed by a person and

energy produced through the–

(i) Captive generation;

(ii) Cogeneration;

(iii) Standby generation;

(iv) Renewable Energy; or

(v) Independent Power Producer (IPP);

covered under clauses (a) and (b), that is, open

access or other sources.

(2) Electricity duty shall not be levied on the

consumption charges or energy consumed,––

(i) by the State Government excluding the

public undertakings;

(ii) by the Central Government excluding the

public undertakings;

(iii) for the purposes of, or in respect of a

school or college or institution imparting

education or training, student’s, hostels,

hospitals, nursing homes, dispensaries, clinics,

public streets lighting, public water works,

sewerage systems, public gardens including

zoos, public museums, administrative offices

forming whole or, as the case may be, a part of

system run by any local bodies constituted

under any law for the time being in force in the

State of Maharashtra;

(iv) by the Government hostels;

(v) by any licensee, or by any other person

engaged in the business of supplying electricity

to the public under the Electricity Act, for the

purposes directly connected with construction,

maintenance, operation of any transmitting

and distributing system, including the losses

incurred therein;”

11.1 As per Section 16 of the 2016 Act, on coming into force the

2016 Act, the Maharashtra Electricity Duty Act, 1958 stood

repealed subject to the eventualities mentioned in Section

16 of the 2016 Act. None of the eventuality mentioned in

proviso to Section 16 shall be attracted and/or applicable

to the facts of the case on hand in view of the specific

provisions providing for exemption from payment of the

electricity duty as per subsection (2) of Section 3 of the

2016 Act. Therefore, for the purpose of exemption from

payment of electricity duty on and after 01.09.2016, subsection (2) of Section 3 of the 2016 Act shall have to be

applied and shall be applicable.

11.2 As per subsection (2) of Section 3 of the 1958 Act, the

electricity duty was not leviable on the consumption

charges or the units of energy consumed…………..by or in

respect of charitable institution registered under the

Bombay Public Trusts Act, 1950, for the purpose of, or in

respect of, school or college imparting education or training

in academic or technical subjects (save in respect of

premises used for residential purposes) [Section 3(2)(iiia)].

Therefore, under the 1958 Act, the electricity duty was not

leviable on the consumption charges or the units of energy

consumed by or in respect of charitable institutions for the

purpose; in respect of school or college imparting education

or training in academic or technical subjects. Even as per

Section 3(2)(ia), electricity duty shall not be leviable on the

consumption charges or the units of energy consumed by

or in a respect of any municipal corporation, municipality,

municipal committee, town committee, notified area

committee, Cantonment Board, Zilla Parishad or village

panchyat constituted under any law for the time being in

force in the State, for the purpose of, or in respect of a

school or college imparting education or training in

academic or technical subjects, a hospital, nursing home,

dispensary, clinic, public street lighting, public water

works and system of public sewers or drains (save in

respect of premises used for residential purposes.

11.3 However, there are material changes under the 2016 Act.

As per Section 3(2) of the 2016 Act, even the public

undertakings are liable to pay the electricity duty. As per

Section 3(2)(iii), electricity duty is not leviable on the

consumption charges or energy consumed, for the

purposes of, or in respect of a school or college or

institution imparting education or training, student’s,

hostels, hospitals, nursing homes, dispensaries, clinics,

public streets lighting, public water works, sewerage

systems, public gardens including zoos, public museums,

administrative offices forming whole or, as the case may

be, a part of system run by any local bodies constituted

under any law for the time being in force in the State of

Maharashtra. Therefore, Section 3(2)(iiia), which was there

in 1958 Act, is now conspicuously and deliberately absent

in Section 3(2) of the 2016 Act.

11.4 On true interpretation of Section 3(2)(iii), under 2016 Act,

electricity duty on the consumption of charges or energy

consumed for the purposes of, or in respect of a school or

college or institution imparting education or training,

student’s, hostels………….run by any local bodies shall

alone be exempted from levy of electricity duty and the

State Government and Central Government are also

specifically excluded from payment of electricity duty.

However, the public sector undertakings are not exempted

from payment of electricity Act. Therefore, under Section

3(2) of the 2016 Act, the charitable institutions running the

educational institutions are not exempted from payment of

electricity duty, which as such was specifically exempted

under Section 3(2)(iiia) of the 1958 Act. The language and

words used in Section 3(2) are plain and simple and are

capable of only one definite meaning that there is no

exemption provided under the 2016 Act from levy of

electricity duty so far as the charitable education

institutions are concerned. As observed herein above,

where the words are clear and unambiguous, recourse

cannot be had to principles of interpretation other than the

literal view. As observed hereinabove, the exemption

provision need to be interpreted literally and when the

language used in exemption provision is simple, clear and

unambiguous, the same has to be applied rigorously,

strictly and literally. Under the 2016 Act, charitable

education institutions running the schools or colleges are

specifically excluded from the exemption clause/exemption

provision – Section 3(2).

12. If the submissions on behalf of the original writ petitioners

is accepted that as per Section 3(2)(iii), with respect to all

the schools/colleges or institutions, imparting education or

training, the electricity duty is not leviable, in that case it

would lead to absurd result. In that case, even the private

hospitals, nursing homes, dispensaries and clinics, who

are profit making entities shall also claim the exemption

from levy of electricity duty. The intention of the legislature

as per Section 3(2) of the 2016 Act, is very clear and

unambiguous that the electricity duty shall not be leviable

on the consumption charges or energy consumed (i) by the

State Government excluding the public sector

undertakings; (ii) by the Central Government excluding

public sector undertakings and (iii) ……. run by the local

bodies constituted under any law for the time being in

force in the State of Maharashtra. Other than the State

Government, Central Government and the local bodies and

the Government hostels, no exemption from payment of

electricity duty has been provided.

13. In view of the above findings recorded hereinabove, there is

no question of applying the doctrine of Last Antecedents as

canvassed by Shri Naphade, learned Senior Advocate,

appearing on behalf of the original writ petitioners.

14. In that view of the above the original writ petitioners –

charitable education institutions registered under the

provisions of the Societies Registration Act and/or under

the Maharashtra Public Trusts Act, are not entitled to any

exemption from levy/payment of the electricity duty on or

after 08.08.2016 i.e. from the date on which the

Maharashtra Electricity Duty Act, 2016 came into effect.

Therefore, the High Court has committed a grave error in

setting aside the levy of electricity duty levied on the

original writ petitioners – respondents No.1 to 10 herein.

The impugned judgment and order passed by the High

Court is unsustainable both, on law and on facts and the

same deserves to be dismissed.

15. In view of the above and for the reasons stated above, the

present Appeal Succeeds. The impugned judgment and

order dated 28.02.2019 passed by the High Court in W.P.

No.2961 of 2018, is hereby quashed and set aside and it is

held that the original writ petitioners – respondents No.1 to

10 herein – charitable education institutions registered

under the Societies Registration Act and the Maharashtra

Public Trusts Act, are not exempt from levy/payment of

electricity duty levied on the consumption charges or the

energy consumed even with respect to the properties used

by such charitable education institutions for the purpose of

or in respect of the school/college imparting education or

training in academic or technical subjects. The present

Appeal is accordingly allowed. There shall be no order as to

costs.

…………………………………J.

(M. R. SHAH)

…………………………………J.

(SANJIV KHANNA)

New Delhi,

January 07, 2022.

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