# THE JIYAJEEHAO COTTON MILLS LTD v. STATE OF MADHYA PRADESH

- **Citation:** [1962] Supp. 1 S.C.R. 282
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Bench:** B. P. S1Nha, J. L. KAPua, M. HmAYATULLAH, J.C. SHAH a.nd J. R. MuDHOLKAR
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-jiyajeehao-cotton-mills-ltd-v-state-of-madhya-pradesh-2419
- **Pages:** 7

## Headnote

Electricity-Levy of duty-J'roduar, if liabk lo pay duly
on ckcricity ronmmd by him&elj-S,.ch Iffy. if ultra vircs the
Constitution-Got:tmmenl of India Acl, 1935 (26 Geo. 5 Ch. 2),
List II Entry 48H-Con.1titulion of India, /Ml I Entry 81,
Liat II, Emry 53-Central PromnCf's and Berar Electricity
Duty Act, 1919 (C. P. dJ Berar JO of 1949), as amen<k.d by
Madilya Pradeah Taxalion l IJW8 Amc11dment Acl, 1956 (JI. P.
7 of 1956), SB, Z, 8.
The appellant mill produced electricity over 100 volts
exclusively for its own consumption. It challenged the levy
of the electricity duty by the Government of Madhya Pradesh
(I) (1962) 2 S. C.R. 839.
.L
-
(1) S.C.R.
SUPREMF! COURT REPORTS
under the C. P. and Berar Electricity Act, 1949, as amended
by the Madhya Pradesh Act 7 of 1956, on the grounds,
.firstly that on proper construction of s. 3 of the Act !t was
not liable to pay any duty at all as the Table of rates did not
prescribe any rate for electrieity consumed by producers
and, serondly, the levy of duty on electricity consumed
by producer himself being in substance an excise duty could
be levied only by the Parliament under Entry Si List I.
If it was not an excise duty the levying of it was beyond the
competence of the State Legislature in the absence of any
appropriate Entry in the List.
Held, that on a combined reading of the definition of
'consumer' in s. 2(a) and 'producer' in s. 2(d-l) of the
C. P.
&
Berar Act, 10 of 1949, a producer, consuming
the electrical energy generated by him is also a consumer
as he consumes electrical energy supplied by himself, falls
squarely within the Table under s. 3 of the Act prescribing
rates of duty payable by · a consumer and is thettfore liable
to pay duty thereunder.
·
Held, futher, that the present Act for levy of duty
upon consumption of electric energy was enacted under Entry
45B of the List II of the Government of India Act, 1935,
corresponding to Entry 53 of List II of the Constitution
where as the levy of duty of excise on manufacture or production of goods hy Parliament is under Entry 84 of List I.
The taxable event with respect to a duty of excise is
'manufacture' or 'production' ; and not 'consumption'; the
levy upon consumption of electric energy cannot be regarded
as duty of excise falling within Entry 84 of List I.
Held, also,
the language used in the Legislative
Entries in the Constitution must be interpreted in a broad
way so as to give the widest amplitude of power to the
Legislature to legislate and not in a narrow and ptndantic
sense.
Crvn. APPELLATE JuRISDICTION: Civil Appeal
No. 582 of 1960.
Appeal from the judgment and order dated
Febuary 5, 1959, of the Madhya Pradesh High
Court (Gwalior Bench) at Indore in Givil Misc.
Case No. II of 1959.
A. V. Viswanatha Sastri, Rameshwar Nath,
8. N. Andley and P. L. Vohra, for the app~llant.
B. Ben, B. K. B. Naidu and I. N. Shroff, for
the respondent.
1961
Tbe Jiy.jeerao
Cotton Mills Lid.
v.
Stat< of
Madhya Pradesh
1961
·nu J i_7aj1,,ao
Collon Mills Ltd.
..
Stau of
M odhya Pratl1;ll.
M..J"41k"' J,
284 SUPREME COURT REPORTS (1962) SUPP.
1961. October 31. The Judgment of the Court
was delivered by
MunHOLKAR, J.-This is an appeal on a certificate of fitness granted by tho High Court of
Madhya Pradesh under Art. 133 (I) (a) of the
constitution.
The appellant is a textile mill at Gwalior in
Madhya Pradesh. It gencrat!',a electricity for the
purpose of running its mills and for other purposes
connected therewith. It docs not 11ell electrical
energy to any person.
Under the provisions of the Contra.I Provinces
and Berar Electricity Duty Act, 1049 (No. IO ~f
1949)as amended by the llla1lhya Pradesh Taxation
Laws Amendment Act, 1956 (Act ~o. 7 of 1956)
the Government of Madhya Pradesh levied upon
the
appellant
electricity
duty amounting to
Rs. 2,78,4li/- for a certain puriod. The appellant
paid it under compulsion and thereafter preferred
a writ petition to tho High Court of Madhya Pradesh
under Art. 226 of the Constitution in which it
challenged th

## Text

1961
Rc11uara11 DaJ
v,
C'Jfllm~r(lr,/ Toi
Ojf1ar, C'..clrllttt.-J
Sinh4 C. J.
1961
Octoitf JJ.
.282 SUPREME COURT REPORTS [1962] stJl»i> ..
this Cturt is the <'llS<' of Ka11hai11alal Lohia v. Com·
ir.i-<sio11er of ITU"ome Tax, West Bengal('). In that
cas<', this Court has taken the same view and dismissed the appeal as •incompetent.'
Tho pri>sent case is a muc·h simpler one, in
which there arc no special
cireum~tances and in
which the facts have not yet he<-n finally determined. It may also he noted that the appellant haa
not challenged the vires of the Act or of any other
law.
We, therefore, think thitt we should dismiss
this appeal ae 'incompetent', without oxpressingany
opinion on the merits of the controversy. It will
be open to tho appollant to take such at.cps as it
may Le advised, in pursuing such remedies as may
be available to it under the law. The appeal is
accordingly dismissed, but in tho circumstances
without costs.
Appeal dismissed.
THE JIYAJEEHAO COTTON MILLS LTD.
v.
STATE OF MADHYA PRADESH
(B. P. S1NHA, C. J., J. L. KAPua, M. HmAYATULLAH,
J.C. SHAH a.nd J. R. MuDHOLKAR, JJ.)
Electricity-Levy of duty-J'roduar, if liabk lo pay duly
on ckcricity ronmmd by him&elj-S,.ch Iffy. if ultra vircs the
Constitution-Got:tmmenl of India Acl, 1935 (26 Geo. 5 Ch. 2),
List II Entry 48H-Con.1titulion of India, /Ml I Entry 81,
Liat II, Emry 53-Central PromnCf's and Berar Electricity
Duty Act, 1919 (C. P. dJ Berar JO of 1949), as amen<k.d by
Madilya Pradeah Taxalion l IJW8 Amc11dment Acl, 1956 (JI. P.
7 of 1956), SB, Z, 8.
The appellant mill produced electricity over 100 volts
exclusively for its own consumption. It challenged the levy
of the electricity duty by the Government of Madhya Pradesh
(I) (1962) 2 S. C.R. 839.
.L
-
(1) S.C.R.
SUPREMF! COURT REPORTS
under the C. P. and Berar Electricity Act, 1949, as amended
by the Madhya Pradesh Act 7 of 1956, on the grounds,
.firstly that on proper construction of s. 3 of the Act !t was
not liable to pay any duty at all as the Table of rates did not
prescribe any rate for electrieity consumed by producers
and, serondly, the levy of duty on electricity consumed
by producer himself being in substance an excise duty could
be levied only by the Parliament under Entry Si List I.
If it was not an excise duty the levying of it was beyond the
competence of the State Legislature in the absence of any
appropriate Entry in the List.
Held, that on a combined reading of the definition of
'consumer' in s. 2(a) and 'producer' in s. 2(d-l) of the
C. P.
&
Berar Act, 10 of 1949, a producer, consuming
the electrical energy generated by him is also a consumer
as he consumes electrical energy supplied by himself, falls
squarely within the Table under s. 3 of the Act prescribing
rates of duty payable by · a consumer and is thettfore liable
to pay duty thereunder.
·
Held, futher, that the present Act for levy of duty
upon consumption of electric energy was enacted under Entry
45B of the List II of the Government of India Act, 1935,
corresponding to Entry 53 of List II of the Constitution
where as the levy of duty of excise on manufacture or production of goods hy Parliament is under Entry 84 of List I.
The taxable event with respect to a duty of excise is
'manufacture' or 'production' ; and not 'consumption'; the
levy upon consumption of electric energy cannot be regarded
as duty of excise falling within Entry 84 of List I.
Held, also,
the language used in the Legislative
Entries in the Constitution must be interpreted in a broad
way so as to give the widest amplitude of power to the
Legislature to legislate and not in a narrow and ptndantic
sense.
Crvn. APPELLATE JuRISDICTION: Civil Appeal
No. 582 of 1960.
Appeal from the judgment and order dated
Febuary 5, 1959, of the Madhya Pradesh High
Court (Gwalior Bench) at Indore in Givil Misc.
Case No. II of 1959.
A. V. Viswanatha Sastri, Rameshwar Nath,
8. N. Andley and P. L. Vohra, for the app~llant.
B. Ben, B. K. B. Naidu and I. N. Shroff, for
the respondent.
1961
Tbe Jiy.jeerao
Cotton Mills Lid.
v.
Stat< of
Madhya Pradesh
1961
·nu J i_7aj1,,ao
Collon Mills Ltd.
..
Stau of
M odhya Pratl1;ll.
M..J"41k"' J,
284 SUPREME COURT REPORTS (1962) SUPP.
1961. October 31. The Judgment of the Court
was delivered by
MunHOLKAR, J.-This is an appeal on a certificate of fitness granted by tho High Court of
Madhya Pradesh under Art. 133 (I) (a) of the
constitution.
The appellant is a textile mill at Gwalior in
Madhya Pradesh. It gencrat!',a electricity for the
purpose of running its mills and for other purposes
connected therewith. It docs not 11ell electrical
energy to any person.
Under the provisions of the Contra.I Provinces
and Berar Electricity Duty Act, 1049 (No. IO ~f
1949)as amended by the llla1lhya Pradesh Taxation
Laws Amendment Act, 1956 (Act ~o. 7 of 1956)
the Government of Madhya Pradesh levied upon
the
appellant
electricity
duty amounting to
Rs. 2,78,4li/- for a certain puriod. The appellant
paid it under compulsion and thereafter preferred
a writ petition to tho High Court of Madhya Pradesh
under Art. 226 of the Constitution in which it
challenged the validity of the levy on two grounds.
The first ground was that upon a proper construotion of s. 3 of the C. P. & Borar Electricity Duty
Act,
19~9 as amended by the Madhya Pradesh
Taxation Laws Amendment Act, 1956 the appellant
would not he liable to pay any duty at all. Tho
second ground was that if the Act permitted tho
levy of duty on electricity consumed by tho producer himself it was ultra virea the Constitution because
in substance it would be a duty of excise whioh oan
be levied only by Parliament under Entry 84 of
List I and that even if it was not excise duty it wa.s
beyond the competence of the Madhya Pradesh
legislature to levy it in the absence of any
appropriate entry in List II. The petition was
summarily rejected by the High Court, but upon
an application made by the appellant it granted to
it certificate of fitness, as already stated.
--
(1) S.O.R.
SUPREME COURT REPORTS
285
Mr. Viswanatha. Sa.stri has reiterated before
us the same grounds which were urged in the High
Court.
For the purpose of appreciating the first
ground it would be useful to reproduce the terms
of s. 3 of the Act. The section runs thus :
"Le~, of duty on sale or consumption of
electrical energy.-Subjeot to the exceptions
specified in Section 3-A every distributor of
electrical energy and every producer shall
pay every month to the State Government at
the prescribed iime and in the prescribed
manner a duty calculated at t' e rates specified
in the Table below on the units of electrical
energy sold or supplied to a consumer or
consumed by himself or his employees during
the preceding month.
Table
Rates of Duty
(i) Electrical energy supplied
for consumption for lights,
fans of any other applian-
(ii)
ces normally connected to
a lighting circuit.
Electrical energy supplied
for purposes other than
those specified in item ( i)
above.
6 nP. per unit
of energy.
1 nP. per unit
of energy.
This is the charging section. It is not disputed by
Mr. Sa.stri that under this provision a producer of
electrical energy is made liable to pay duty for the
units of electrical energy consumed by himself. He,
however, contends that rates of duty have been
prescribed in the Table below s. 3 only with respect
to electrical energy "supplied for consumption" to
others and that no rates have been prescribed with
1961
Tk6 Jiyojeerao
Colton 31 ills UJ.
v;
Stale of
Madhya P,adtsh
M•dhalka< J.
1901
Tiu Jiyajttrao
Collc• _ Mub ltd.
v.
Slak of
Madhya Prad4Jh.
M1ufholkar J.
286 SUPREME OOURT REPORTS [1962) SUPP.
respect to electrical energy consumed by the producer himself. Section 2(n) of the
Act
defines
"consumer". The dt>finition, so far as relevant,
rune thus:
" 'Consumer' means any person who
consumes rlectrical energy sold or supplied by
a.
distributor
of electrical cncrj?y or a
d
"
pro uccr ................. .
'Producer' as defined s. 2( d-1) of the Act means "a
person who generates electrical energy at a voltage
exceeding hundred volts for hiA own consumption
or for supplyine: to others". If we read the two
definitions together, omittinl( the non-essentials,
'consumer' would include "any person who consumes
electrical energy supplied by a person who generates
eleotrical energy for his own consumption". t ·nder
s. 3 a person who gpncratcs elcctricnl energy over
hundred volts for his own consumption is liable to
pay duty on the units
of electrical
energy
colll!llmed by
himself.
A producer consuming
the electrical energy generated by him is also a.
consumer, that is to say, he is a. person who consumes electrical energy supplied by hims<;Jf. The
Table prescribes rates of duty payable with respect
to electrical energy snpp)iP,d for consumption and,
therefore, the lovy on the appellant fa.118 squarely
within the Table under s. 3 of the Act and
~f/s. Viswanat ha Sastri's argument is devoid of
substanct>.
It is difficult to sec how the levy of duty
upon consumption of · electrical energy can be
regarded as duty of excise foiling within Entry 84
of List I. Under that Entry what is permitted
to Parliament is levy of duty of excise on manufacture or production of goods (other than those excepted expressly by that rntry). The taxable event
with respect to a duty of excise is "manufacture" or
"production".
Herc the taxable event is not
production or generation of electrical energy but
(1) S.C.R. SUPREME COURT REPORTS
287
its consumption. If producer generates electrical ·
energy and stores it up, he would not be required
to pay any duty under the Act. It is only when
he sells it or consumes it that he would be rendered liable to pay the duty prescribed by the Act.
The Central Provinces and Berar Electricity Act
was enacted under Entrv 48B •>f List II of the
Government of India . .\ct, 1935.
The relevant
portion of that Entry read thus :
"Taxes on the consumption or sale of electricity .. :r ·····"Entry 53 of List II of the Constitution :iti to the same effect.
The argument of
Mr. Sastri is that the word "consumption" shoulu
be accorded the meaning which it had under the
various Act, including the Indian Electricity Act,
1980.
Under that Act and under the various
Provincial and State Act, consumption of electricity
mean, according to him, consumption by persons
other than producers and that both in the Government of India Act and under the Constitution the
word 'consumption' must be deemed to have been
used in the same sense. The Acts in question deal
only with a certain aspect of the topic "electricity",
and not with all of them. Therefore, in those Acts
the word "consumption" may have a limited meaning, as pointed out by learned counsel.
But the
word
"c9nsumption" has a wider meaning. It
means also "use up" "spend" etc. The mere fact that
a series of Jaws were concerned only with a certain
kind of use of electricity, that is consumption of
electricity by pers0ns other than the producer cannot justify the conclusion that the British Parliament in using the word "consumption" in Entry
48B and the Constituent Assembly in Entry ;j3
of List II wanted to limit the meaning of "consumption" in the same way. The language used in
the legislative entries in the Constitution must he
interpreted in a broad way so as to give the widest
amplitude of power to the legislature to lagislate
~lld not in a narrow and
pedantic sense, We
1961
Tht .Tiyajttrao
Cotton Mills ltd.
v.
Stale of ,1fadhya
Pradesh
1\1 udholkar J.
28S SUPREME COURT REPORTS [1962] SUPP.
19111
n, Jiyajtnao
Collon Id ills Ltd.
v.
cannot, therefore, accept either of the two grounds
urged by Mr. Viswanatha S&stri challenging th(•
vires of the Act.
Stott of Madhμ
PtaJule
MudholkM J.
111111
The appeal fails and is dismissed with
costs.
App,·al diami .. ed.
IN THE MATTER OF MR. 'A' AN ADVOCATE
(B. P. SINHA, c. J., K. SUJIBA RAO, J. c. SHAH,
RAOHU11AR DAYAL and J. R. MUDHOLKAR, JJ.)
Proft83ional Miaconduct-Adoocate on Record writing
Uttcra wliciting bri•f•-lf guilty of profuaional miacondudUnlrulhful comlucl in court-Defect of character-Puniahment--
Supremt Cou•I Ru lea, 19a0 (aa amended), 0. IV A, r. 2.
Mr. A, an Advocate on Record of this Court, wrote
letters soliciting clients. One of such letters, a post-card was
addres.ed to the Law Minister of Maharashtra and ended as
follows,-
"You might have got an Advocate on Record in this
Court but I would like to place my services at your disposal if
you so wish and agree,,.
To the Registrar of this Court he admitted
having
written the post-card, but before the Tribunal stoutly denied
having don' so. The Tribunal found on evidence that the
Advocate had written the post-card. When the matter came
up before the court, the Advocate at lint denied having
written the post-card but on being pressed by the court to
make a true statement admitted that he had writren the postcard and had admitted that before the Registrar.
lldd, that it is against the etiquette of the Bar and its
professional ethics to •olicit briefs from clients and an Advocate who docs so must be guilty of gTOSily unprofessional
cond1:ct.
Th•rc can be no doubt in the instant case that the Advocate concerned had written the post-card soliciting bri.Cs. It
makes no diffcronce whether he did •o in ingorance of this
elementary rule of the profession or in disregard of it, since his
conduct in court showed that he had no regard for truth and,
consequently, he deserved no •ympathy of the court and must
be suspended.
'