Expressing displeasure and surprise over the Punjab government charging tax from private companies for inter-state sale of electricity,the Punjab and Haryana High Court on Thursday has not only quashed the 2010 notification issued in this regard by the government but also gave it month to repay the tax amount. It will also have to pay an interest of nine per cent.
In 2010,the government had issued a notification under Section 3 of the Punjab Electricity Duty Act-2005,stating that all private companies that had been selling electricity to other states were to pay a tax of 13 per cent. Since then several lakhs have been recovered from such companies.
Aggrieved,several companies had moved the court the same year. The court had admitted their petitions with the caveat that if it allows the petitions,the government will have to refund the entire amount to the companies.
The petitioners had taken the ground that a government can only impose tax on intra-state sale of electricity and that it has no legal right to charge tax on inter-state sale.