Karnataka

Kolar

CC/142/2023

M/s. Nagesh Enterprises - Complainant(s)

Versus

Assistant Executive Engineer, BESCOM - Opp.Party(s)

Sri.B.Kumar

12 Jun 2024

ORDER

Date of Filing: 16/11/2023

Date of Order: 12/06/2024

BEFORE THE KOLAR DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, OLD D.C. OFFICE PREMISES, KOLAR – 563 101.

Dated:12^th DAY OF JUNE 2024

SRI. SYED ANSER KALEEM, B.Sc., B.Ed., LL.B., …… PRESIDENT

SMT. SAVITHA AIRANI, B.A.L., LL.M., …..LADY MEMBER

CONSUMER COMPLAINT NO:142/2023

M/s. Nagesh Enterprises.

No.285, Tyakal Road,

Bangarpet, Kolar District.

Rep. by its Partner,

Sri. S. Anil,

Aged about 64 years,

S/o Segur Sriramalu Setty.

(Rep. by Sri. B. Kumar, Advocate)                  ….Complainant.

 

                                                                                                                - V/s –

Assistant Executive Engineer,

M/s. B.E.S.C.O.M,

Bangarpet Sub Division,

Bangarpet.

(Rep. by Sri. B.S. Vijaya Kumari, Advocate)  ….Opposite Party.                     

 

-: ORDER:-

BY SRI. SYED ANSER KALEEM, PRESIDENT.,

1. This is the complaint filed under section 35 of the Consumer Protection Act 2019 against the OP alleging deficiency in service on the part of the OP authority against the claiming for recovery of arrears of tax beyond the period of 4 years hence pray to direct the OP authority to desist from collecting a sum of Rs.26,50,752/- i.e. 9% tax on electricity consumption for a period from 01/02/2019 to 31/03/2023 and seeking direction to pay a sum of Rs.50,000/-towards mental shock and grant reliefs as it deem fit in the attendant circumstances of the case.

 

 

2. The brief fact of the complaint is that, the complainant is running the rice mill in the name and style of M/s. Nagesh Enterprises for the purpose of earning his livelihood and to provide sustenance to his family.  It is stated that, the complainant has taken electricity supply since the date of inception of the rice mill i.e from during the year 2015 from the OP authority in order to run the said rice mill. 

 

3.  It is stated that, the complainant had an account ID.No.BPTHT-263 and RR.No.4025413, and the complainant making regular payment of the electricity bill towards electricity consumption.  Further it is stated that, the complainant was got surprised when the OP issued electricity bill during the month of November 2023 for a sum of Rs. 32,23,105/- by imposing  the tax @ 9% P.a  on the consumption of the electricity from the month of March 2019 till date.

 

4. Further complainant stated that, the Joint Director, District Industries Centre, Kolar has on 22/07/2016 issued a certificate to the complainant that, as per the Government Order there is an exemption of electricity tax since the enterprise is located at Zone 3 as specified in the Government Order and it is clear that, the complainant to avail the exemption from payment of electricity tax from the date of commencement of commercial production that is from 01/02/2016 for a period of 3 years.  But the OP has issued a letter dated: 09/06/2023 for demanding tax on electricity bill @ 9% P.a a sum of Rs.26,50,752/- from 01/02/2019 to 31/03/2023. The Complainant further states that, the demand of excess amount as a tax by the OP is not in accordance with law and the same is unjust and unfair trade practice of the OP. 

 

 

5. It is stated that, the Indian Central Government has reminded the State Governments that, they do not have power to impose taxes or duties on electricity generated from any source, the Ministry clarified that, the power to levy taxes and duties lies with the Central Government. 

 

6. Further complainant stated that, the misfortune of the complainant, the entire country is under lock down on account of spread of Covid-19 Pandemic, when that time all the operational activities of the complainant is stopped in view of the orders issued by the Government of Karnataka.  Further due to lock down complainant has suffered financial crisis and it requires long term schemes to revive.  Further stated that, the Licensee shall not recover any arrears after the period of 2 years when such sum became first due.  Further stated that, unless and until the OP authority has shown the aforesaid arrears of tax amount continuously in the bill as recoverable as arrears of the charges of electricity supply.

 

7.  On the above said grounds the complainant states that, on demanding Tax on Electricity bill is contrary to law and barred by limitation, thereon, by alleging unfair trade practice and deficiency in service, filed this complaint.  

 

8. Upon admission of complaint and on issuance of notice, OP appeared through his counsel and filed its version. 

 

 

9. In the version of OP it is denied that, the complainant to earn his livelihood he is running rice mill in the name and style of M/s Nagesh Enterprises and the complainant is doing the said business and contributing the earnings to his family members.  It is admitted that, OP supplied with electricity for his own use by the license is a consumer before the Hon’ble Commission is true and correct.  It is also admitted that, it is true and correct that, the complainant had account ID No. 4025413 and       RR.No. BPTHT-263 and he is rendered the making payment.  It is also admitted that, OP issued the bill for a sum of Rs.32,23,105/- and imposed tax @ 9% P.A and the consumption of electricity from the month of March 2019 till date.  Further OP given intimation to the complainant regarding tax arrears from 01/02/2019 to 31/03/2023 for a sum of Rs.26,50,752/-.  It is contended that, on 22/07/2016 issued a certificate to the complainant stating that, as per the Government order there is an exemption of electricity/duty since the enterprise is located at zone 3 as specified in the Government order and he is clear that, the complainant to avail the exemption from payment of electricity tax from the payment of commencement of commercial production is from 01/02/2016 for a period of   3 years is true and correct.  It is contended that, later the consumer has not submitted the letter for extension of tax exemption and due to shortage and staff and oversight the tax to the electricity bill from 01/02/2019 was not included in the immediate monthly bill.  Further contended that, same was noticed during the audit verification and account officer instructed to recover the arrears of tax from 01/02/2019 to 31/03/2023.  Hence contended that, complainant shall pay tax on electricity bill at 9% P.A from 01/02/2019 to 31/03/2023 and justify the demand to pay a sum of Rs. 26,50,752/-.  

 

10. It is contended that, the Ministry clarified that, the power to levy taxes and duties lies with the Central Government and any taxes or duties not specifically mentioned in the VII schedule be imposed by the State Government and the same is published by the Times of India News Paper dated 29/10/2023 is not true and correct.  Whereas contended that, as per the Government Gazette dated: 19/03/2015 as per notification No.EN106EBS2018 dated 19/07/2018 at 9% of tax on electricity bill is applicable. 

 

11. Further contended that, it is false and incorrect that, complainant suffered financially could not run the rice mill.  Further OP contended that, all the rest of the allegations made in the complaint averments are all denied as false and incorrect and also contended that, there is no deficiency of service by the side of the OP.  Hence contended that, complainant shall pay tax at the rate of 9% P.A on the electricity bill for the period from 01/02/2019 to 31/03/2023.   On the above said grounds OP prays to dismiss the complaint.

 

12.  In order to prove the case of the parties filed their affidavit evidence along with documents to supporting their case.

 

13. On the basis of the pleadings of the parties the following points will do arise for our consideration.

 

 

 

 

 

 

 

1. Whether the complainant is a consumer?
2. Whether the complainant proves that, claiming arrears of tax @ 9% P.A on the electricity bill from 01/02/2019 to 31/03/2023 beyond the period of 2 years and it amounts to deficiency in service on the part of the OP?
3. Whether the complainant is entitled for the relief as sought in the complaint?
4. What Order?

 

We have heard the arguments of both parties and perused the evidence placed on record.

 

Our answers to the above points as under:

Point No. (1):-            In the Negative.

Point No. (2) & (3):-    Are in the Negative.

Point No. (4):-            As per the final orders

                                for the following.

 

                            REASONS

14. Point No.(1):- On perusal of the pleadings of the parties and evidence placed on record it is an undisputed fact, that the complainant is running a rice mill under the name and style of M/s Nagesh Enterprises since 2015 and OP has given the power supply of electricity service from 01/01/2016 to run the rice mill.  

 

15. It is worth to note that, on perusal of the entire complaint averments, though, complainant pleaded that, to earn his livelihood he is running the rice mill by taking power consumption from the OP authority and also taken exemption of tax from 01/02/2016 to 01/02/2019 but not paid the arrears of tax @ 9% P.a from 01/02/2019 to 31/03/2023.

 

It is worth note that, Rice milling industry is one of the most energy consuming industry like capital, labour and material, energy is one of the production factors we choose to produce final product.  Electricity is the main energy source for these rice mills and he is imported from the State Electricity Board Grids.  Hence the large scale of production of rice in the rice mill and consumption of huge electricity power to run the rice mill itself is evident that, the complainant is not a potential consumer and thereon, it cannot be construed as to earn his livelihood running the rice mill.  Under these circumstances we reached to a conclusion that, the supply of electricity to run the rice mill from the OP authority to the complainant enterprises (rice mill) cannot come under the domain of the Consumer Protection Act and hence we hold that, complainant is not a consumer. Accordingly we answered the Point No.(1) in the Negative.

16. Point No.(2) &  (3):- On perusal of the pleadings of the parties and evidence placed on record and we are of the opinion that, these two points are interlinked to each other and in order to avoid repetition of discussion of facts and for the sake brevity these points will taken up together for common discussion.

 

17. Further on perusal of the pleadings of both the parties, it is an undisputed fact that, the complainant had taken the electricity power supply from the OP authority since 2015 to run the rice mill under the name and style of M/s. Nagesh Enterprises.  It is also not in the dispute that, as per the exemption granted by the competent authority no tax was imposed on electricity bill from 01/02/2016 for the period of 3 years. 
18. It is noteworthy to mention that, only during the year 2023 OP authority demanded arrears of tax since 01/02/2019 to 31/03/2023 to an extent of amount of Rs.26,50,752/- hence, the complainant objected that beyond the period of 2 years OP cannot claim the arrears of tax in question. 

Per contra, OP contended that, due to oversight they have not generated the bill for collecting tax since 01/02/2019 and also contended that, complainant has not given any requisition for extension of tax exemption and by oversight the tax to the electricity bill from 01/02/2019 was not included in the immediate monthly bill.  Further contended that, same was noticed during the audit verification and account officer instructed to recover the arrears of tax from 01/02/2019 to 31/03/2023.  Hence contended that, complainant shall pay tax on electricity bill at 9% P.A from 01/02/2019 to 31/03/2023 and justify the demand to pay a sum of Rs. 26,50,752/-.

19.  The crux of the matter is to consider, whether there is a point of limitation is involved in demanding the arrears of tax from the complainant?

It is well settled law as per section 17 of the Limitation Act, on perusal of the same it reads thus, “Where in the case of any action for which a period of limitation is prescribed by this Act either.

1. The action is based upon the fraud of the defendant or his agent or of any person through whom his claims or his agent or
2. The right of action is concealed by the fraud of any such person as aforesaid or
3. The action is for relief from the consequences of the mistake.

The period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake as case may be or could be reasonable diligence have discovered it.  The above provision of Law of Limitation clearly speaks about, when the mistake is comes to the knowledge of the party he has got right to recover the tax.  Furthermore, OP in his version clearly stated that, though they raised the bill from 01/02/2019 to 31/03/2023 not raised the tax on the electricity consumption bill, but same is deducted during the internal audit period.  Furthermore, the OP also filed the copy of auditor report dated: 10/03/2023, on perusal of the same the mistake of non-paying of the tax by the complainant is deducted and thereon, the limitation of two years runs from the date of discovering the mistake.  Hence complainant cannot take a stand the period of limitation is 2 years which holds no water.

20.   Further we lay our hands to the decision of the Hon’ble Apex Court cited in Civil Appeal No.1672/2020 in the case of Assistant Engineer Ajmer Vidyut Vitarn Nigam Limited & another V/s Rahamatullah Khan alias Rahamjulla, wherein which Hon’ble Apex Court clearly held that, as per section 17(1)(c)  of the limitation Act 1963 in case of a mistake, the limitation period begins to run from the date from the mistake is discovered first time.  Also we have referred the decision of the Hon’ble Apex Court rendered in Civil Appeal No.7235/2009 in the case of M/s. Prem Cottex V/s Uttar Haryana Bijli Vitarn Nigam Limited and others where in the Apex Court based on the judgment of the Apex Court passed in the case of Assistant Engineer Ajmir Vidyut, Vitarn Nigam limited and another V/s Rahamatulla Khan alias Rahamjulla.  The Hon’ble Apex Court clearly held on the point of limitation for recovery of dues by the Electricity supply authority.  When the electricity charges would become first due only after the bill is issued, even though the liability as arisen on consumption on the issue of limitation of 2 years Apex Court held that, the period of limitation of 2 years commence from the date becomes first due.  That the Apex Court raising an additional or supplementary demand after the expiry of the period of limitation in the case of mistake or bonafide error and refer the section 71(1)(c) of the limitation Act.  Obviously on referring the judgment of the Hon’ble Supreme Court it is made it clear after discovering the mistake, the period of limitation is 2 years.  On perusal of the report of the audit conducted by the auditors of OP authority and they came to know that, first time for non-collecting the arrears of tax @ 9% P.A since 01/02/2019 to 31/03/2023 and generated the bill for arrears of tax.  Hence demanding to pay arrears of tax in accordance with law is not amounts to deficiency in service on the part of the OP.

 

21.   It is worth to note that, during the course of arguments, counsel for the complainant filed a memo for molding the prayer and prayed to pass orders to pay the arrears of tax amounts to an extent of Rs.26,50,752/- in 26 installments.  Further, that the OP’s obligatory duty to collect the arrears of tax and after knowing the date of mistake for not generating the bill and immediately first due becomes during the year 2023 and OP demanding to pay the arrears of tax.  Under these circumstances the complainant also fairly under takes to pay the arrears of tax in 26 installments and hence we deem it just and proper OP at liberty to recover the arrears of tax @ 9% P.A as fixed by the law or the authority in 12 to 15 installments whichever is convenient.  However, on foregoing reasons discussed above we reached to conclusion that, complainant unable to prove the deficiency in service on the part of the OP and hence complainant is not entitled for the relief as sought in the complaint.  However, OP is at liberty to grant installments as ordered above.  Accordingly for non-proving deficiency in service on the part of the OP and thereon, not entitled for the relief prayed in the complaint, we answered the Point No.(2) and (3) are in the Negative.

 

22. Point No. (4):- On the basis of discussion and reasons assigned while answering Point No.(1) to (3) and thereon we proceed to pass the following order:

 

ORDER

1. The complaint is hereby dismissed.       No order as to cost.
2. Send a copy of this order to all the parties to the proceedings at free of cost.

 

            (Dictated to the Stenographer, transcribed by him, corrected and then pronounced by us on this 12^th DAY OF JUNE 2024)

 

 

        MEMBER                               PRESIDENT