Author: Khushi J Prajapati
The Punjab & Haryana High Court held that no tax can be levied on electricity consumed by agencies of the Government of India.
The court held that the Punjab State Electricity Board (PSEB) violated Article 287 of the constitution of India by imposing octroi on electricity consumed by the Military Engineering Service (MES) a Central Government Agency.
The court affirmed that Article 287 exempts central government agencies from such state taxes on electricity consumption.
The court directed the refund of Rs. 457342/- to the petitioner reinforcing that no tax can be levied on electricity consumed by central government entities after its sale by the Board.
FACTS
The petitioner was the Military Engineering Service (MES) of the Government of India and sought a refund of Rs. 4,57,342/- collected by the Punjab State Electricity Board as octroi on electricity supplied between 2000 and 2007.
The petitioner argued that according to Article 287 of the Constitution of India which exempted from taxes on consumption or sale of electric energy to the Government of India, there could not be legally charged octroi. But still, PSEB had collected it and deposited this amount with the local municipal body making the plea to refund it on the grounds of constitutional exemption.
Case Details
Case details – Union of India vs. Punjab State Electricity Board
Court: High Court of Punjab & Haryana at Chandigarh
Case Number: 213 CWP-4763-2007 (O&M)
Date of Decision: 30.07.2024
Judges: Justice Sanjeev Prakash Sharma and Justice Jagmohan Bansal
