RAJASTHAN STATE ELECTRICITY BOARDversusCESS APPELLATE COMMITTEE AND ANR. ETC.

             RAJASTHAN STATE ELECTRICITY BOARD
A
                             v.
           CESS APPELLATE COMMITTEE AND ANR. ETC.

                              OCTOBER 8, 1990

B            [S. RANGANATHAN AND A.M. AHMADI, JJ.)

        Water (Prevention & Control of Pollution) Act, J9J4{-Th~ Water
  (Prevention and Control of Pollution) Cess Act, 1971/The Water (Pre-
  vention and Control of Pollution) Cess Rules, 1978. Sections 25( 1),
  26/Section 7/Rule 6-Trade effluent-Treatment of-Liability to pay
C cess-Grant or refusal of rebate-:--Role of Assessing Authority.

         The Water (Prevention & Control of Pollution) Act, 1974 was
  enacted inter alia to provide for the prevention and control of water
  pollntion, the maintaining or restoring of wholesomeness of water, etc ..
D Section 25 of the said Act provides that no person shall without the
  consent of the State Board, bring into use any new or altered outlet for
  the discharge of sewage or trade effiuent into a ~ream or well, or begin
  to make any new discharge of sewage or trade effiuent into a stream or
  well. Section 26 lays down that persons discharging sewage or trade
  effluent into a stream or well before the commencement of the Act shall
E apply for consent within a period of three months of the Constitution of
  State Board. Thereafter the Water (Prevention and Control of Pollu-
  tion) Cess ~ct, .1977 was enacted to provide for the levy and collection of
  cess on water ronsumed by persons carrying on certain industries,
  Power (Thermal & Diesel) Generating Industry was one such industry
  included at item No. 14 in Schedule I to the Act. Section 3 of the 1977
F Act provides that there shall he levied and collected a cess for the
  purposes of the 1974 Act and utilisation thereunder. The cess under the
  Act is made payable by every person carrying on any specified industry
  and the same has to be calculated on the basis of the water actually
  consumed at rates specified in the Schedule. Section 7 of the Act pro-
  vides for rebate.
                                              /
G

        The appellant has established a Thermal Power Station on the
  bank of River Chamhal for generating energy. It consnmes water from
  the river for condensor cooling. After the water is used for cooling, it is
  1reated as a trade effiuent in the neutralisation plant before it is dis-
H charged iuto the river. According to the appellant, the temperature,          ,

                                       120
                       R.S.E.B. v. CESS COMMITTEE                       121

 after following the prescribed procedure, is brought down· to below
                                                                              A
 40°C, when it is discharged into the river. The appellant had also instal-
 led a 0.4 MGD plant for treatment of sewage. According to the appel-
 lant both these plants are working satisfactorily. The appellant, as
 required by the rules, submitted monthly returns of the water con-
 sumed from the river for its Thermal Station for the period from July
 1983 to January 1984 and February 1984 to June 1984. The respondent-         B
 authority, assessed the cess at Rs.13,13,710 for the first period and
 Rs.9,42,013 for the subsequent period. No rebate was allowed under
 Section 7 of the 1977 Act on the ground that the so-called nentralisation
 plant was not a plant for the treatment of sewage or trade effinent
 within the meaning of the said provision.

      The appellant filed an appeal under section 13, in respect of the       c
cess claimed for the period Juiy 1983 to January 1984, but the appellate
authority dismissed the same holding that the cess was correctly asses-
sed and that the appellant was not entitled to rebate. As regards the
period from February 1984 to June 1984, the appellant submitted a
review petition which was rejected by respondent No. 2. Thereupon,            D
the appellant filed separate writ petitions before the High Court chal-
lenging the assessment orders. Both the writ petitions were dismissed by
the High Court. The High Court opined that there was nothing on
record to show that the appellant had applied for consent of the State
Board to instai a plant either under section 25 or section 26 of the 1974
Act nor was there any evidence to show that such consent was given. It        E
accordingly held that the authorities under the Act had tightly disal-
lowed the claim of rebate to the appellant under section 7. Against the
orders of the High Court as also against various assessment orders
which were passed subsequent to the orders of the High Court the
appellant has filed these appeals, after obtaining special leave.
                                                                              F
     Allowing the appeals, and remanding the cases to the Assessing
Authority for fresh disposal, this Court,

      HELD: A plant has undoubtedly been installed for the treatment
of sewage and no dispute in that behalf was raised. However, as the
bulk consumption of water from the river is used at the condensor             G
cooling plant the question is whether the appellant can be said to have
installed a plant for the treatment of a trade effiuent. [130G]

      The Appellate Anthority took the view that a 150 ft. long channel
 meant for carrying the trade effiuent cannot be described as a treat-
·ment plant. The iippellant contended that the treatment plant installed      H
      122        Sl,JPREME COURT REPORTS              [1990] Supp. 2 S.C.R.

      by it comprised of an arrangement to lift the water to a height of 22tl.
A
      and then drop it from that height into an open channel so that it cools
      down on co111ing in contact with the atmosphere and then flows towards
      and into the river. [130H; 131A)

          Section 7 as well as Rule 6 do not envisage the Board's consent
B   under Section 25(1) of the 1974 Act as a sine-qua-non. Under Section 7
   .the consumer has only to show that he has installed a plant for the
    treatment of sewage or trade effiuent and that it functioned successfully
    during the relevant period to earn rebate. Section 25(1) operates in a
    different field and has nothing to do with a plant installed for the
    treatment of a trade effiuent although the grant of consent to a new
C . outlet can be conditional on the existence of a plant for the satisfactory
    treatment of effiuents to safeguard against pollution of the water in the
    stream; [131C-E]

            Since the Board's consent under-Section 25(1) was not imperative
      that part of the High Court's order cannfit be sustained.,[131E]
D
           CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
      4843-44 of 1990.

           From the Judgment and Order dated 28.10. 1988 of the Rajas-
      than High Court in D.B. Civil W.P. No 966 of 1986 and 121of1985 ..
E

           Dr. L.M Singhvi, P. Agarwal, S.K. Jain, Sahid Rizvi and D.K.
      Singh for the Appellant.                                      ·

            N.S. Hegde, Additional Solicitor General, J.D. Jain, R. Mohan,
F     R.A. Perumal, Heinant Sharma, Ms. A. Subhashini and Ms. Sushma
      Suri for the Respondents.

            The Judgment of the Court was delivered by

            AHMADI, J. Special leave granted in all the cases.
G
            .Pursuant to the resolution passed by certain State Legislatures
      including that of Rajasthan under clause 1 of Article 252 of the Con-
      stitution, Parliament enacted The Water (Prevention & Control of
      Pollution) Act,1974 (Act VI of 1974), (hereinafter called the '1974
      Act'), to provide for the prevention and control of water pollution, the
J-1   maintaining or restoring of wholesomeness of water, the establishment
              R.S.E.B. v. CESS COMMIITEE (AHMADI, J.J                 123

of Boards for the prevention and control of water pollution, the con-
                                                                             A
ferring on and assigning to such Boards powers and functions relating
thereto and for matters connected therewith. 'Pollution', as defined in
section 2(e ), means "such contamination of water or such alteration of
physical, chemical or biological properties of water or such discharge
of any sewage or trade effluent or of any other liquid, gaseous or solid
substance into water as may, or is likely to, create a.nuisance or render    B
such water harmful or injurious to public health or safety, or to
domestic, commercial, industrial, agricultural or other legitimate uses,
or to the life and health of animals or plants or of acquatic organisms".
"Sewage. effluent" according to section 2(g) means "effluent from any
sewerage system or sewage disposal works and includes sullage from
open drains". "Trade effluent" according to Section 2{k) includes
"any liquid, gaseous or solid substance which is discharged from any         c
premises used for carrying on any trade or industry, other than
domestic sewage". Section 3, 4 and 13 provide for the constitution of a
Central Board, a State Board and a Joint Board, respectively. Section
 16 enumerates the functions of the Central Board constitution for
promoting cleanliness of streams and wells in different areas of the         D
State. Section 17 sets out the functions of the State Board which, amongst
others, include preparing a comprehensive programme for the preven-
tion, control or abatement of pollution of streams and wells in the
State and for securing its execution; inspection of sewage or trade
effluents, works and plants for the treatment of sewage and trade
effluents: evolving methods for treatment of sewage and trade                E
effluents and for the disposal thereof and laying down standards of
treatment of sewage and trade effluents to be discharged into any
particular stream. Sections 21and22 confer power on the State Board
or any officer empowered by it to take for the purpose of analysis
samples of water from any stream or well or samples of any sewage or
trade effluent which is passing from any plant or' vessel or from any        F
other place into any stream o1 well and to send the samples for analysis
to the Laboratory established or recognised for that purpose by the
concerned Board. Section 24 prohibits the use of any stream or well for
the disposal of polluting matters. Section 25 imposes restrictions on
new outlets and new discharges. Section 25(1) reads as under:
                                                                             G
            "Subject to the provisions of this section, no person shall,
            without the previous consent of the State Board, bring into
            use any new or altered outlet for the discharge of sewage or
            trade effluent into a stream or well, or begin to make any
            new discharge of sewage or trade effluent into a stre~ or
            well."                                                           H
     124         SUPREME COURT REPORTS               [ 1990] Supp. 2 S.C.R.

     Under these provisions the application for consent has to be made to
A
     the State Board in the prescribed form containing the particulars relat-
     ing to the proposed construction, installation or operation of any treat- 1
     men! or disposal system or of any extension or addition thereto.
     Sub-section (7), which is relevant for our purpose, reads as under:

                 "The consent referred to in sub-section ( 1) shall, unless
                 given or refused earlier, be deemed to have been given
                 unconditionally on the expiry of a period of four months of
                 the making of an application in this behalf complete in all
                 respects to the State Board."

C    Section 26 provides that persons discharging sewage or trade effluent
     into a stream or well before the commencement of the Act shall apply
     for consent within a period of three months of the constitution of the
     State Board. If the State Board refuses to grant consent or withdraws
     consent already granted an appeal is provided to the appellate autho-
     rity. Section 29 confers revisional powers on the State Government to
t>   call for the records of any case where an order has been made by the
     State Board under Sections 25, 26 and 27 for the purpose of satisfying
     itself as to the legality or propriety of any such order. Failure to com-
     ply with the requirements of the statute is punishable under Chapter
                                                                                   I
     VII. Thus, this law aims at prevention and control of water pollution.

E       On 7th December, 1977, the President gave his assent to the
  Water (Prevention and Control of Pollution) Cess act, 1977(Act No.
  XXXVI of 1977), (hereinafter referred to as 'the 1977 Act'). This Act
  was enacted to provide for the levy and collection of a cess on water
  consumed by persons carrying on certain industries, with a view to
  augment the resources of the statutory Boards for the prevention and
f control of water pollution. Section 2(c) defines "specified industry" to
  mean "any industry specified in Schedule I". Power (Thermal &
  Diesel) Generating Industry is included at item No. 14 in Schedule.I to
  the Act. Section 3 which is the charging section inter alia provides that
  there shall be levied and collected a cess for the purposes of the 1974
  Act and uti.lisation thereunder. The Cess under sub-section ( 1) is made
G payable by every person carrying on any specified industry to be
  calculated on the basis of water actually consumed for any of the
  purposes specified in column l of Schedule II, at such rate not exceed-
  ing the rate specified in the corresponding ·entry in column 2 thereof.
  Schedule II enumerates in column l the purposes for which water is
  consumed and sets out the maximum rate of cess therefor in column 2.
H The rate of cess for industrial cooling is three-fourths ofa paisa, per
               R.S.E.B. v. CESS COMMIITEE [AHMADI, J.]                125

kilolitre, while it is one paisa per kilolitre for domestic purpose. Where
                                                                             A
water gets polluted and the pollutants are easily bio-degrad.able, the
rate is 2 paise per kilolitre but where the pollutants are not easily
bio-degradable and are toxic, the rate is two and a half paise per
kilolitre. It is obvious that the rate of cess depends on the degree of
pollution. It may also be noticed at this stage that the cess is to be
calculated on the basis of the water 'consumed' for any of the purposes      B
specifiecj in column I of Schedule II at the rate set out in the notifica-
tion issued by the Central Government not exceeding the rates
specified in column 2 of the said schedule. Section 4 provides for
affixing of meters for tlie purposes of measuring and recording the
quantity of water consumed. Section 5 requires every person carrying
on any specified industry and every local authority, liable to pay the
cess under seo.tion 3, to furnish returns in such forms and at such          c
intervals containing such particulars as may be prescribed to the officer
or authority appointed therefor. The officer or authority to whom the
return has been furnished under section 5 is charged with the duty to
make an inquiry as to the particulars stated in the return and then pass
an assessment order stating the amount of cess payable by the                D
concerned person or local authority, as the case may be. Section 14
prescribes a penalty for failure to file a retmq and section 1I provides a
penalty for failure to pay the cess within the specified time. Any
person or local authority aggrieved by an order of assessment made
under section 6 or by an order imposing penalty under section I I, may
file an appeal under section 13 within the prescribed time. Section 7        E
provides for a rebate if the cess is payable. It reads as under:

            "Where any person or local authority, liable to pay the cess·
            under this Act, instals any plant for the treatment of
            sewage or trade effluent, such person or local authority
            shall from such date as may be prescribed, be entitled 10        F
            rebate of seventy per cent of the cess payable by such
            person or, as the case may be, local authority."

The expressions 'sewage' and 'trade effluents' having not been defined
would have the same meanings respectively assigned to them under the
1974 Aci: Section 17 empowers the Central Government to make rules           G
for carrying out the purposes of the Act. Under that section, the Cent-
ral Government made the Water (Prevention & Control of Pollution)
Cess Rules, 1978, (hereinafter called 'the Rules'). Rule 6 thereof deals
with rebate'. Under that rule where a consumer instals any plant for the
treatment of sewage or trade effluent such consumer becomes entitled          .;,
                                                                             \•,1f;
to the -rebate under section 7 on or from the expiry of 15 days from the     'H
    126         SUPREME COURT REPORTS                [ 1990) Supp. 2 S.C.R.

    date on which such plant is successfully commissioned and so Jong as it
A
    functions successfully.

          The appellant, the Rajasthan State Electricity Board constituted
    in 1957 under section 5 of the Electricity (Supply) Act, 1948, estab-
    lished a Thermal Power Station on the bank of River Chambal in Kota
    for generating energy. lt admittedly consumes water from the river for
    Condensor Cooling. The water drawn from the river is filtered and
    thereafter passes through an enclosed pipeline over the condensor unit
    for cooling the condensor. After the water is used for cooling, it is
    treated as a trade effluent in the neutralisation plant installed by the
    appellant at considerable expense with a view to preserving the whole-
    someness of water before it is discharge<! into the river. After con-
c   densor cooling, the water passes through an enclosed underground
    steel pipeline of the length of about 478 meters upto the seal pit. On
    reaching the seal pit the water is pumped to a height of about 22 feet
    from where it is made to fall into an open channel and is then carried in
    that channel to a distance of about 150 feet before it plunges into the
D   river. In this manner the water at the seal pit comes in contact with air.
    Its temperature is reduced firstly by the 22 feet fall into the open
    channel and thereafter by covering a distance pf about 150 feet before
    getting merged in the river or stream. The temperature is thus brought
    down to below 40'C, the standard prescribed under the Minimum
    National Acceptable Standards published by the State Board. The
    appellant had also installed a 0.4 MGD plant for treatment of sewage.
    Both these plants, contends the appellant, are working satisfactorily.

        The appellant submitted monthly returns of the water consumed
  from river Chambal for its Thermal Station, units 1 and 2, for the
  period from July, 1983 to January, 1984 and February, 1984 to June
F 1984. The Assessing Authority, respondent No. 2, assessed the cess at
  Rs.13, 13)10 for the first period and Rs.9,42,013 for the.subsequent
  period. No rebate was allowed under section 7 of the 1977 Act on the
  ground that the so-called neutralisation plant was not a plant for the
  treatment of sewage or trade effluents within the meaning of the said
  provision. Nothing was said about the plant for the treatment of
G sewage. The appllant filed an appeal under section 13 in respect of the
  cess claimed for the period from July, 1983 to January, 1984. The
  appellate authority dismissed the appeal holding that the cess was
  correctly assessed and the appellant was not entitled to rebate. In
  respect of the assessment for the period from February, 1984 to June,
  1984 the appellant submitted a review petition which was rejected by
H respondent No. 2. The appellant then preferred an appeal but the
               R.S.E.B. v. CESS COMMITTEE [AHMADI, J.l                 127

same was dismis_sed as barred by limitation. The appellant preferred
                                                                             A
separate Writ Petitions Nos. 121/85 and 96ii/S6 in the High Court
challenging the two assessment orders. In the former writ petition the
High Court granted interim stay against the recovery of the disputed
cess amount to the extent of seventy percent till the disposal of the writ
petition. In the second writ petition since the appellant had already
paid the amount of cess, the application for stay did not survive but for    B
future assessment orders, it directed the appellant to pay thirty percent
regularly and the remaining seventy percent with interest at 15% per
annum in the ·event the challenge failed. Both the aforesaid writ peti-
tions were finally disposed of by a Division Bench on 28th October,
1988which dismissed them holding that the cess was correctly assessed
and the appellant was not entitled to rebate. In taking this view the
Division Bench came to the conclusion that there was no material on
                                                                             c
record. to show that the appellant had applied for consent of the State
Board to instal a plant either under section 25 or section 26 of the 1974
Act nor was there evidence to show that such consent was given. It,
therefore, opined that the authorities below had rightly concluded that
the benefit of rebate under section 7 was not admissible to the appel-       D
lant. While dismissing the writ petitions the Division Bench, however,
observed as under:

            "Anyhow if the consent after the period of assessment in
            dispute has either been obtained for discharge of effluent
            etc., or can be deemed to have been obtained and if the          E
            treatment plants are working satisfactorily, the petiti</,.ner
            shall be entitled to rebate according to the provisions of
            rules for that period."

It follows therefrom~that the Division Bench refused to grant rebate to
the extent of seventy per cent for want of consent under section 25 or       F
26 of the 1974 Act.

      Feeling aggrieved by the Judgment and order passed by the Divi-
sion Bench of the High Court, the appellant preferred special leave
petitions (Civil) Nos., 1429 and 2157 of 1989 challenging the dismissal
of the said two writ petitions. During the pendency of these proceed-        G
ings several assessment orders came to be made for the subsequent
periods uptc may, 1989 for the water consumed at the appellant's
Thermal Units. The Assessing Authority also refused to grant rebate.
The appellant preferred appeals against the assessment orders passed
from time to time but to no avail. Instead of approaching the High
Court the appellant has filed Special Leave Petitions Nos. 3223, 3262,
    128         SUPREME COURT REPORTS                [1990] Supp. 2 S.C.R.

    3272. 4599 and 4600 of 1990 in this Court against the said assessment
A
    orders a5 well as the refusal to grant rebate on the ground that similar     1
    questions were involved in the earlier two special leave petitions which
    were pending in this Court. We have granted special leave in all cases
    under Article 136 of the Constitution and we now proceed to dispose
    them of by this common Judgment.
B
          Dr. Singhvi, the learned counsel for the appellant contended that
    the 1977 Act was an independent piece of legislation and was not, what
    he called, 'the pari materia or parasite legislation' to the 1974 Act, and
    hence once it is shown that the appellant had installed a plant for the
    treatment of a trade effluent within the meaning of section 7 of the
     1977 Act read with rule 6 of the Rules, the appellant was entitled to
c   rebate regardless of whether or not the appellant had secured the
    consent of the State Board under section 25( 1) of the 1974 Act. He
    contended that the State Board's consent became necessary only if an
    outlet new or altered was sought to be used for the discharge of
    se~;ege or trade effluent in the stream and not otheIWise. In the pre-
D   sent case, contended Dr. Singhvi, the appellant had put up an indepen-
    dent sewage plant for the treatment of sewage and an independent
    neutralisation plant for the treatment of water discharged from the
    condensor cooling plant of the Thermal Station. So far as the former is
    concerned the consumption of water is negligible; the bulk consump-
    tion takes place at the condensor cooling plant from where water is
E   discharged after use at a temperature far above the standard of 40°C,
    which if discharged into the stream without treatment would be harm-
    ful and injurious to acquatic organisms in the stream. That is why the
    neutralisation plant was necessary to bring down the temperature of
    water to 40"C or below before its actual discharge in the stream. At the
    point where this water merges into the stream its temperature is below
F   40°C and therefore it ceases to be a contaminated trade effluent. Sirtce
    the outlet is used for the discharge of this water which is no more
    polluted it cannot be said that it is used for the discharge of a trade
    effluent within the meaning of section 25(1) qf the 1974 Act. Accord-
    ing to Dr. Singhvi the enactment being essentially for the preventiOn,
    control and abatement of pollution of streams apd wells, the duty to
G   ensure the purity of streams and wells is cast on the State Board and
    for the effective performance of the same, section 25(1) provides for
    previous consent if any new or altered outlet is intended to be brought
    to use for the discharge of sewag_e or trade effluent. But no such
    previous consent would be necessary if uncontaminated water is
    sought to be discharged into the stream. In other war-Os accordirtg to
H   Dr. Singhvi the expression 'trade effluent' in section 2fk) must be read
                         R.S.E.B. v. CESS COMMITTEE !AHMADI, J.]               129

          in the context of the purpose and object of the law and the mischief it
                                                                                      A
          seeks to curb. Yet, by way of abundant caution, the appellant applied
          for the grant of consent under section 25/26 of the 1974 Act by the
          letter dated 9th April, 1984 for the neutralisation plant and by the
          letter dated 12th April, 19.84 for the sewage plant meant for the colonv
          of workmen situate within the power Station. Under sub-section (7) of
          section 25 since the State Board neither granted nor refused consent        B
          within the period of four months from the receipt of the applications, it
          must be deemed to have been granted unconditionally on the expiry of
          the said period. Lastly, he pointed out that during the pendency of the
          two writ petitions in the High Court, the Secretary of the State Board
          granted the required consent and conveyed it by his Jetter No. F.
          5(B- 14 )RSEB/Tech/86/11472 dated 24th March, 1988. Therefore,
          when the Division Bench of the High Court disposed of both the writ         c
 '
,..
\         petitions the consent of the State Board under section 25( I) was
    '     already granted and hence the High Court was not right in making the
          observations it made in. paragraphs 7 and 9 of the impugned judgment.

                We may clarify that in the present appeals we are not concerned       D
          with the legality and validity of the levy of cess. Dr. Singhvi, however,
          stated that the appellant reserved the right to challenge the validity of
          the 1977 Act, if the interpretation placed by the authorities below on
          the true scope and meaning of section 7 read with rule 6 is found to be
          correct. We may state that since we are not required to go into the
          question of Parliament's competence to enact the 1977 Act, we do not        E
•l        propose to delve into this aspect of the matter.

     '•         Now, on a plain reading of sub-section (1) of section 25 it be-
          comes clear that the previous consent of the State Board is necessary
          where any new or altered outlet is proposed to be used for the dis-
          charge of sewage or trade effluent into a stream or well. If what is        F
          discharged,in the stream or well is not a polluttefl 'trade effluent'
          (section 2(k)) or a 'sewage effluent' (section 2(g)), can there be any
          question of seeking the previous consent of the State Board? The
          appellant has a separate sewage plant. Since the bulk of the water is
          consumed at the condensor cooling plant and the same is recycled into
          the stream, the question is whether what is discharged in the stream        G
          can be said to be a trade effluent? Dr. Singhvi emphasised that the
          consent of the State Board would not be necessary under section 25(1)
          for the discharge of that recycled water, unless it is shown that what
          the appellant discharged in the stream or river was polluted water.
     <    According to Dr. Singhvi, the use of water at the condensor cooling
     '    plant merely raises the temperature of water above the tolerance limit      H
    130         SUPREME COURT REPORTS                [ 1990] Supp. 2 S.C.R.

    of 40° C. if the water is discharged in the river or stream before its
A
    temperature is reduced to 40° C or below, it may well be contended
    that within the broad meaning of the expression 'pollution· in section
    2( e ), it was imperative for the appellant to obtain the previous consent
    of the State Board for making use of that outlet. But if, on the other
    hand, it is shown that'the temperature of water is brought down to the
B   prescribed standard and the water is no more harmful or injurious to
    acquatic organisms in the river or stream i.e. is not polluted, the dis-
    charge of such water cannot be equated with discharge of a trade
    effluent. This raises a mixed question of law and fact, viz., whether the
    recycled water returned to the stream in the same condition in which it
    was drawn with the temperature reduced to less than 40° C, can still be
    said to be a 'trade effluent' requiring consent under Section 25( I)? It
c   may, in this context be mentioned that samples of the trade effluent
    were collected by the State Board for analysis on 24th May, 1984. By
    letter dated 3rd December, 1984, the appellant requested the
    Assistant Engineer, State Board, to supply a copy of the analysis
    report which was refused by the letter dated 26th December, 1984.
D   The appellant was informed that the monitoring results co.nductecl by
    the Board were not supplied to the concerned industries. He added
    that the appellant could get the sample tested, if so desired, at the
    Board's Laboratory on payment basis. We think that if the Board was
    in posse_ssion of this vital information, it should have in all fairness
    brought it on record rather than withhold it. If that information was
E   available on record Dr. Singhvi's contention could have been met. We
    are, however, not inclined to raise any adverse inference as was
    suggested.

        We now come to the second limb of Dr. Singhvi's submission.
  According to him, section 7 of the 1977 Act is not dependent on the
p Board's consent under section 25(1) of the 1974 Act. In fact neither
  section 7 nor rule 6 speak about the same. All that section 7 says is that
  any person or local authority which is liable to pay cess can claim
  rebate of 70% of the cess payable by him or it, if he or it has installed a
  plant f6r the treatment of sewage or trade effluent, as the case may be.
  A plant has undoubtedly been installed for the treatment of sewage
G and no dispute in that behalf was raised before us. However, as the
  bulk consumption of water from the river is used at the condensor
  cooling plant the question is whether the appellant can be said to have
  installed a plant for the treatment of a trade effluent. The Appellate
  Authority took the view that a 150 ft. long channel meant for carrying
  the trade effluent cannot be described as a treatment plant. The appel-
H Iant contended that the treatment plant installed by it comprises of an
               R.S.E.B. v. CESS COMMITTEE [AHMADI, J.}                  131

arrangement to lift the water to a height of 22 ft. and then.drop it from
                                                                              A
that height into an open channel so that it cools down on coming in
contact with the atmosphere and then flows towards and into the river.
It would appear that this arrangement was not specifically brought to
the notice of the authorities below including the High Court and it
seems the authorities decided the question of the existence of the
treatment plant on the premise that it consisted of merely a single 150 ft.   B
long channel. However, this aspect has to be looked into.

       The High Court has, however, taken the view that in the absence
of consent under Section 25(1); the appellant is not entitled to rebate·.
We find it difficult to agree with this view. Section 7 as well as Rule 6
do not envisage the Board's consent under Section 25(1) of the 1974
Act as a sine-qua-non. Under section 7 the consumer has only to show          c
that he has installed a plant for the treatment of sewage or trade
effluent and that it functioned successfully during the relevant period
to earn rebate. Section 25( 1) operates in a different field and has
nothing to do with a plant installed for the treatment of a trade effluent
although the grant of consent to a new outlet can be conditional on the       D
existence of a plaint for the staisfactory treatment of effluents to safe-
guard against pollution of"the water in the stream. The High Court
refused the claim for rebate as it erroneously thought that the prior
consent of the State Board was a must. That is why in the concluding
part of the Judgment it observed that if the consent is subsequently
obtained or deemed to be obtained and the plant is working success-           E
fully, the appellant will be entitled to rebate. Since we are of the view
that the Board's consent under Section 25(1) was not imperative, we
think that that part of the High Court's order cannot be sustained.

      So far as the 1977 Act is concerned it would be necessary to
consider the true scope and meaning of section 7 and rule 6. On a plain       F
reading of the said provisions it would be necessary to decide (i)
whether water discharged from the condensor cooling plant can be said
to be a 'trade effluent' by reason only of the fact of its temperature
being above the prescribed standard, (ii) whether but for the treat-
ment given to it as described by the appellant and set out above such
water would have been discharged in the stream or river at a tempera-         G
ture above 40°C, and (iii) whether the arrangement made by the appel-
lant as set out above can, therefore, be described as a plant for the
treatment of a trade effluent. These and the related questions must be
answered to effectively deal with the appellant's claim for rebate. The
authorities below including the High Court have not applied their
minds to these essential for deciding the question of grant or refusal of     H
    132         SUPREME COURT REPORTS               [ 1990] Supp. 2 S.C.R.

A rebate. If it is found that the plant in question is one for the treatment
  of a trade effluent, the appellant would be entitled· to rebate notwith-
  standing the absence of consent under section 25( I) of the 1974 Act.
  We feel that the parties did not focus their attention on these vital
  aspects and, therefore, failed to place on recrod the material essential
  for deciding the application for grant of rebate. In the circumstances,
B we are left with no alternative but to remit the matter to the Assessing
  Authority with a dtrection to permit the appellant as well as the State
  Board to place on record such material as is considered relevant and
  thereafter give the parties an opportunity of being heard before decid-
  ing the matter. The Assessing Authority should do so without being
  influenced by the previous orders of the authorities as well as the High
C Court. In the meantime i.e. till the Assessing Authority decides the
  matter afresh, the appellant will continue to pay 30% of the cess
  amount and will file an undertaking in this Court within eight weeks
  from today to the effect that in the event the appellant is finally found
  liable to pay the balance of 70% the appellant will pay the.same with
D interest at 15% per annum within six months from the final determina-
  tion. The appeals are allowed accordingly. Having regard to the facts
  and circumstances of these cases, we make no order as to costs.

    Y. Lal                                                Appeals allowed.