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To, Executive Engineer (Legal) Jodhpur Discom, Jodhpur

Subject : Legal opinion in regard to the recovery of Electricity Duty and Water Conservation Cess in cases of electricity theft

Dear Sir, 1) With reference to your letter dated 24/04/2013, I am hereby rendering my legal opinion in regard to the recovery of Electricity Duty (hereafter referred to as ED) and Water Conservation Cess (hereafter referred to as WCC) in cases of electricity theft. 2) At the outset, it is incumbent on me to state that the levy of EC and WCC (on all consumers) is compulsory; including those consumers who have indulged in electricity theft. This proposition is corroborated by subsection(2) of Section 3 of the Rajasthan Electricity (Duty) Act [hereafter referred to as the ED Act]; which enumerates the consumers who shall be exempted from paying the ED. This list is exhaustive in nature, and it does not include the consumers who have indulged in electricity theft. 3) The contention that neither the RERC notification dated 20/6/2006 nor the ED Act envisage the levy of ED and WCC on consumers who indulge in electricity theft will produce absurd result(s). It is settled law that in such cases, where there are competing interpretations, the Court - in order to effectuate the intention of the legislature/rule-making authority shall provide purposive interpretation to the impugned provision(s).

4) A cess/duty is of the same nature as a tax, and therefore, it has to be compulsorily levied on every consumer; apart from those who have been granted explicit/unambiguous exemptions. Thus, it has to be compulsorily levied on consumers who indulge in electricity theft. 5) That the Boards Order dated 10/11/2003 categorically states that henceforth, the element of ED shall be considered as inclusive in the case of compensation/settlement charges for consumers indulging in electricity theft. Thus, it becomes abundantly clear that the element of ED is an integral part of the dues recoverable from a consumer indulging in electricity theft. 6) Point 5 in paragraph 4/n of your letter states that the Jodhpur Discom ought to proceed on the verbatim text of the RERC notification. This is a flawed assumption, as the notification ought not to be read in isolation; but conjointly with the ED Act. And, on a conjoint reading of the notification and the Act, along with the Order of 2003, the conclusion that ED is an integral element of the provisional liability - to be imposed a consumer indulging in electricity theft is inescapable. 7) Section 5 of the ED Act enumerates that in the event of non-recovery of ED from a consumer, the supplier (in this case, Jodhpur Discom) shall be liable to pay the amount, along with interest, to the govt. This provision is of utmost importance, as it clearly demonstrates that the intention of the legislature is to ensure the procurement of ED, by mandating it as a compulsory charge on the consumption of electricity. 8) In my considered opinion, since the Order which includes ED as an element of compensation charges has already been promulgated, it is redundant to frame any extra set of rules for the levy of ED on consumers who indulge in electricity theft. This Order (promulgated in 2003) squarely covers the case of M/s Belim Steels Pvt. Ltd.

9) However, since no such Order/notification has been promulgated for the levy of WCC in cases of consumers indulging in electricity theft, it is submitted that the proper course of action would be to frame rules, or promulgate an Order, before levying WCC. 10) It is pertinent to note that such rules/Order can be effectuated retrospectively. In other words, WCC can be imposed on M/s Belim Steels Pvt. Ltd. even if such an Order was non-existent when the liability arose. 11) Hence, in my considered opinion, the proper course of action on the part of Jodhpur Discom would be to promulgate a retrospective Order for the levy of WCC; and subsequently proceed to recover both ED and WCC from M/s Belim Steels Pvt. Ltd.