Constitution of India: Art. 226 – Writ jurisdiction of High Court under – Exercise of – Dispute involving question of facts – Amenability to writ jurisdiction of the High Court – On facts, appellant company produced electricity for its own consumption and the surplus energy was supplied to the Bihar State Electricity Board (BSEB) – Issuance of notice to appellant demanding electricity duty and penalty on electricity that it was supplying to BSES – Writ petition by appellant challenging the imposition – Set aside by the High Court holding that the dispute between the parties is factual in nature and that the appellant should exercise alternate remedy provided in the 1948 Act – On appeal, held: Existence of an alternative remedy does not by itself bar the High Court from exercising its jurisdiction in certain contingencies – In view of the law on the rule of alternate remedy, the High Court can exercise its writ jurisdiction if the order of the authority is challenged for want of authority and jurisdiction, which is a pure question of law – Test for the determination of a question of law is whether the rights of the parties before the court can be determined without reference to the facts of the case – Petitions challenged the power/jurisdiction of the State Government to levy tax on sale of electricity to Electricity Boards – Issues raised are questions of law which require a comprehensive reading of the Electricity Act, and no adjudication of facts is required – Thus, is amenable to the writ jurisdiction of the High Court – High Court erred in declining to entertain the writ petition – Judgment of the High Court is set aside – Bihar Electricity Duty Act, 1948.
Art. 226 – Writ Jurisdiction of High Court – Exercise of, in presence of alternative remedy – General Principles. Allowing the appeal, the Court
HELD: 1. The High Court would normally not exercise its writ jurisdiction under Article 226 of the Constitution if an effective and efficacious alternate remedy is available, the existence of an alternative remedy does not by itself bar the High Court from exercising its jurisdiction in certain contingencies. [Para 19][300E-F]
2. It is not the case of the appellant that the respondents have miscalculated the duty and penalty imposed on it. The appellant submitted that the State Government does not have the power to levy tax on its sale of electricity to BSEB. Thus, the plea strikes at the exercise of jurisdiction by the Government. In view of the law on the rule of alternate remedy, the High Court can exercise its writ jurisdiction if the order of the authority is challenged for want of authority and jurisdiction, which is a pure question of law. [Para 22][304-A-B]
3. There is no dispute about the nature of the transaction between the appellant and BSEB. The appellant in the instant case is a sugar mill that also produces electricity. The writ petition filed by the appellant was dismissed by the impugned judgment. The petitions challenged the power of the State Government to levy tax on sale of electricity to Electricity Boards. [Para 23][304C-D]
4. The test to be applied for the determination of a question of law is whether the rights of the parties before the court can be determined without reference to the factual scenario. In the instant case, the High Court was entrusted with the determination of the meaning of the phrases used in Section 3 of the Act to determine if the supply of electricity by the appellant would fall within its ambit. There is no adjudication on facts required here. [Para 23][305-E-F]
5. The issues raised by the appellant are questions of law which require, upon a comprehensive reading of the Bihar Electricity Act, a determination of whether tax can be levied on the supply of electricity by a power generator (which also manufacture sugar) supplying electricity to a distributor; and whether the first respondent has the legislative competence to levy duty on the sale of electricity to an intermediary distributor. The question of whether the appellant is liable to file returns under Sections 6(B)(1) and 5A of the Act is directly related to the issue of whether the sale of electricity by the appellant to BSEB falls under the charging provisions of Section 3(1). The questions raised by the appellant can be adjudicated without delving into any factual dispute. Thus, the present matter is amenable to the writ jurisdiction of the High Court. The High Court made an error in declining to entertain the writ petition. The judgment of the High Court is set aside. The writ petition is restored to the file of the High Court for fresh determination. [Para 24, 25][305-G-H; 306-A-B]
State of AP v. National Thermal Power Corporation Ltd. (2002) 5 SCC 203 : [2002] 3 SCR 278; Raza Textiles Ltd. v. ITO (1973) 1 SCC 633; State Trade Corporation of India Ltd. v. State of Mysore AIR 1963 SC 548: [1963] SCR 792; Radha Kishan Industries v. State of Himachal Pradesh (2021) SCC OnLine SC 334;
Whirpool Corporation v. Registrar of Trademarks, Mumbai (1998) 8 SCC 1 : [1998] 2 Suppl. SCR 359; Harbanslal Sahni v. Indian Oil Corporation Ltd. (2003)
2 SCC 107; Radha Krishan Industries v. State of Himachal Pradesh & Ors. (2021) SCC OnLine SC 334; Assistant Commissioner of State Tax v. M/s Commercial Steel Limited Civil Appeal No. 5121 of 2021; State of HP v. Gujarat Ambuja Cement Ltd. (2005) 6 SCC 499 : [2005] 1 Suppl. SCR 684; Executive Engineer v. Seetaram Rice Mill (2012) 2 SCC 108 : [2011] 15 SCR 211; Union of India v. State of Haryana (2000) 10 SCC 482; Sree Meenakshi Mills Ltd. v. Commissioner of Income Tax AIR 1957 SC 49 : [1956] SCR 691 referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.