The Karnataka Electricity (Taxation on Consumption) Act, 1959

Short title, extent and commencement.-

1. (1) This Act may be called the Karnataka Electricity (Taxation on Consumption) Act, 1959.
2. (2) It extends to the whole of the State of Karnataka.
3. (3) The provisions of this Act, except section 13, shall be deemed to have come into force on the first day of July, 1959.

Amendment of the title, long title and preamble.- In the Karnataka Electricity (Taxation on Consumption) Act, 1959 (Karnataka Act 14 of 1959) (hereinafter referred to as the principal Act),-

1. (i) in the title, after the word "consumption", the words "or sale" shall be inserted;
2. (ii) in the long title and preamble after the word "consumption", the words "or sale" shall be inserted.

Levy of tax on electricity charges.- Subject to the provisions of this Act, there shall be levied and paid to the State Government, advolorem tax (hereinafter referred to as "electricity tax") at five percent on the electricity charges payable (excluding arrears) by all the consumers except consumers under agricultural (irrigation pump sets upto and inclusive of Ten Horse Power), Bhagya jyothi and Kutira jyothi categories.

Payment of electricity tax.-

1. (1) Every licensee shall collect and pay to the State Government at the time and in the manner prescribed, the electricity tax payable under this Act on the electricity charges included in the bill issued by him to the consumer. The tax so payable shall be a first charge on the amounts recoverable by the supplier for the energy supplied by him and shall be a debt due by him to the State Government: Provided that where the licensee has been unable to recover the amounts due to him for the energy supplied by him he shall not be liable to pay the tax in respect of the energy so supplied.
2. (2) A licensee may be granted a rebate of such amount, as may from time to time be determined by the State Government regard being had to the cost of collection of the electricity tax incurred by such licensee: Provided that the amount of rebate shall not exceed two per cent of the electricity tax collected by the licensee.
3. (3) Every person, who consumes energy generated by himself, or who supplies energy to any other person free of charge, shall pay, or collect and pay, as the case may be, to the State Government, at the time and in the manner prescribed, the electricity tax payable under section 3.
4. (4) When any consumer fails or neglects to pay at the time and in the manner prescribed, the amount of electricity tax due from him, the licensee or, as the case may be, the person supplying energy free of charge, may without prejudice to the right of the State Government to recover the amount under section 7, after giving not less than seven clear days’ notice in writing to such person, cut off supply of energy to such person; and he may, for that purpose, exercise the power conferred on a licensee by sub-section
5. (1) of section 24 of the Indian Electricity Act, 1910, for the recovery of any charge or sum due in respect of energy supplied by him.
6. (5) Nothing in this section shall apply,-
   • (i) to any person who generates energy for the purpose of supplying it for the use of vehicles or vessels;
   • (ii) to the consumption of energy generated by means of generators not exceeding ten kilowatts in capacity.

Books of account, etc.- Every licensee and every person not being a licensee referred to in sub-section

1. (3) of section 4 shall keep books of account, in the prescribed form and submit to the State Government or to the prescribed officer, returns in such form and at such times as may be prescribed, showing the units of energy consumed by him and the total units of energy supplied by him to consumers, and the amount of tax payable thereon under section 3 and such other particulars as may be prescribed.

Amendment of section 4.- In section 4 of the principal Act, -

1. (i) for sub-section (1), the following shall be substituted, namely:- "(1) Every licensee shall collect and pay to the State Government at the time and in the manner prescribed, the electricity tax payable under this Act,-

1. (a) on the electricity charges included in the bill issued by him to the consumer. The tax so payable shall be a first charge on the amounts recoverable by the supplier for the electricity supplied by him and shall be a debt due by him to the State Government: Provided that where the licensee has been unable to recover the amounts due to him for the electricity supplied by him he shall not be liable to pay tax in respect of the electricity so supplied;
2. (b) on the units of electricity supplied to consumers by non licensee through the licensee."
   • (ii) for sub-section (3), the following shall be substituted, namely:- “(3) Every person who consumes electricity generated by himself, and or who supplies electricity free of charge or otherwise to any other person through his own system, shall pay, or collect and pay, as the case may be, to the State Government, at the time and in the manner prescribed, the electricity tax payable under section 3.”
   • (iii) in sub-section (4),-
3. (a) the words "free of charge" shall be omitted.
4. (b) for the words "sub-section

1. (1) of section 24 of the Indian Electricity Act, 1910", the words "sub-section
2. (1) of section 56 of the Electricity Act, 2003 (Central Act 36 of 2003)" shall be substituted.

Amendment of section 7.- In section 7 of the principal Act,-

1. (a) in clause
   • (ii) the words “free of charge” shall be omitted;
2. (b) after clause (ii), the following shall be inserted, namely:- “(iii) the amount received or recovered towards the arrears of tax or revenue due to government shall be adjusted first towards penalty, balance if any towards the outstanding interest on the tax or revenue. After such adjustment the balance amount be adjusted towards tax or revenue;”

Power of State Government to notify exemptions and reductions of tax.- The State Government may, by notification, make an exemption or reduction in rate in respect of the tax payable under this Act,-

1. (i) on energy supplied or consumed for any specified purpose; or
2. (ii) by any class of consumers.

Dispensing with the performance of certain contracts.- Notwithstanding anything contained in any law for the time being in force or in any judgment, decree or order of any Court or in any contract or instrument having force by virtue of any such law, but subject to section 8,-

1. (a) the performance of any contract by the State Government or the licensee in so far as it provides for reimbursement or indemnification in favour of the consumer, of or for any amount levied on or collected from him as tax under this Act shall be and shall be deemed always to have been dispensed with and any amount due or payable by the State Government or the licensee to a consumer by way of such reimbursement or indemnification under the contract, including the amount of interest, if any, shall be deemed to be wholly discharged;
2. (b) no Civil Court shall entertain any suit or proceeding against the State Government or the licensee for the recovery of any amount by way of such reimbursement or indemnification including interest, if any;
3. (c) all suits and proceedings (including appeals, revisions, attachments or execution proceedings) pending on the said date against the State Government or the licensee for the recovery of any such amount shall abate; Provided that nothing in this section shall entitle the State Government or the licensee for refund of any amount already paid by way of reimbursement or indemnification before the commencement of the Karnataka Electricity (Taxation on Consumption) (Amendment) Act, 1990.

Penalties.-

1. (1) If any person liable under section 5 to keep books of account or submit returns fails to keep or submit the same in the manner prescribed or obstructs an Inspector in the exercise of his powers and duties under this Act, or contravenes any rule made under section 10, he shall, on conviction, be punished with fine which may extend to five hundred rupees. (2)
   • (a) Where an offence under sub-section
2. (1) has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this clause shall render any such person liable to any punishment provided in the aforesaid sub-section if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
   • (b) Notwithstanding anything contained in clause
   • (a) where an offence under sub-section
3. (1) has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.—For the purposes of this sub-section,—
   • (a) “company” means a body corporate, and includes a firm or other association of individuals; and
   • (b) “director” in relation to a firm means a partner of the firm.

Power to make rules.-

1. (1) The State Government may, by notification, make rules to carry out the purposes of this Act.
2. (2) In particular and without prejudice to the generality of the foregoing power, the State Government may make rules,-
   • (a) prescribing the time and manner of payment of the electricity tax under sections 3 and 4;
   • (b) prescribing the form of the books of account to be kept and the times at which, the form in which and officers to whom the returns required by section 5 shall be submitted;
   • (c) prescribing the powers and duties of Inspecting Officers; and
   • (d) providing for any other matter for which there is no provision or insufficient provision in this Act and for which provision is, in the opinion of the State Government, necessary for giving effect to the provisions of this Act.

Rules and Notifications to be laid before State Legislature.- Every rule made under section 10 and every notification issued under section 8 or 14 shall be laid as soon as may be after it is made or issued before each House of the State Legislature while it is in session for a total period of thirty days which may be comprised in one session or in two or more sessions and if, before the expiry of the said period, either House of the State Legislature directs any modification in such rule or notification or directs that such rule or notification shall not have effect, and if the modification or direction is agreed to by the other House, the said rule or notification, as the case may be, shall thereafter have effect only in such modified form or be of no effect, as the case may be.

Repeal and savings.- The Mysore Electricity (Taxation on Consumption) Act, 1950 (Mysore Act XX of 1950), as in force in the Mysore Area, Part II of the Bombay Finance Act, 1932 (Bombay Act II of 1932) as in force in the Belgaum Area and the Madras Electricity Duty Act, 1939 (Madras Act V of 1939), as in force in the Mangalore and Kollegal Area, shall stand repealed: Provided that such repeal shall not affect,-

1. (a) the previous operation of the said enactments or anything duly done or suffered thereunder;
2. (b) any right, privilege, obligation or liability, acquired, accrued or incurred under the said enactments; or
3. (c) any penalty, forfeiture or punishment incurred in respect of any offence committed against the said enactments; or
4. (d) any investigation, legal proceeding (including assessment proceeding) or remedy in respect of any such right, privilege, obligation, liability, forfeiture or punishment as aforesaid: and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if this Act had not been passed.

Repeal of Karnataka Ordinance No. 2 of 1959 and savings.- The Karnataka Electricity (Taxation on Consumption) Ordinance, 1959, is hereby repealed; Notwithstanding such appeal,-

1. (i) any right, privilege, obligation or liability acquired, accrued or incurred under the said Ordinance;
2. (ii) any penalty, forfeiture or punishment incurred in respect of any offence committed against the said Ordinance; and
3. (iii) any appointment, notification, order, rule or form, made or issued or anything done or any action whatsoever taken under the said Ordinance; shall be deemed to have been acquired, accrued or incurred, or made, issued, done or taken under this Act at the relevant time.

Power to remove difficulties.-

1. (1) If any difficulty arises in giving effect to the provisions of this Act in consequence of the transition to the said provisions from the provisions of the enactments repealed by section 12 the State Government may, by notification, make such provisions as appear to it to be necessary or expedient for removing the difficulty.
2. (2) If any difficulty arises in giving effect to the provisions of this Act (otherwise than in relation to the transition from the provisions of the enactments repealed by section 12), the State Government may, by notification, make such provisions, not inconsistent with the purposes of this Act as appear to it to be necessary or expedient for removing the difficulty.