In Brief
A sugar mill generating electricity from bagasse (a by-product) supplied surplus power to Bihar's electricity board (BSEB). The state issued a large demand for electricity duty, treating the sale to BSEB as taxable. The mill argued the state lacked power to tax such sales to licensees, not end-consumers, relying on statutory definitions and constitutional limits. The High Court declined to hear the case, citing an alternative remedy and factual disputes. The Supreme Court held the questions were purely legal—whether state law permits taxing generator-to-licensee sales—and remanded the case to the High Court for decision on merits.
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