Vyshno Minerals vs. The State Of Ap

Facts

The petitioners, M/s. SLV Granites and M/s. Chegu Mperium (P) Ltd., filed writ petitions challenging amendments to the Andhra Pradesh Electricity Duty Act, 1939, and subsequent Government Orders (G.Os) concerning the levy of electricity duty. The petitioners argued that amendments to Section 3(1) and Section 7(1) of the Act, particularly through the Andhra Pradesh Electricity Duty Amendment Act, 2020, the Andhra Pradesh Electricity Duty Second Amendment Act, 2024, and Act No. 10 of 2024, were unconstitutional due to excessive delegation and abdication of legislative functions. They also challenged G.O.Ms.No.7 dated 08.04.2022, which levied duty at Rs. 1/- per unit on industrial and commercial consumers, and G.O.Ms.No.22 dated 23.10.2023, which permitted licensees to recover this duty. The State of Andhra Pradesh, represented by the Energy Department and power distribution corporations, were the respondents.

Held

The Court held that the amendment to Section 3 of the Andhra Pradesh Electricity Duty Act, 1939, by Act 23 of 2024, granting power to the government to fix the rate of duty between six paise to one rupee per unit, is upheld. However, the amendments to Section 3 by Act 10 of 2021 and Act 23 of 2024, granting power to the government to identify categories of consumers for fixing tariff rates, are set aside. The proviso to Section 3, stipulating a minimum duty of 6 paise per unit in the absence of notified rates, remains unaffected. The amendments to Section 7 by Act 23 of 2024 are struck down. G.O.Ms.No.7, dated 08.04.2022, is struck down, but the government is entitled to collect duty at the rate of 6 paise per unit from the date Act 10 of 2021 was published until the rate is modified according to law. The exemption for agricultural consumers under G.O.Ms.No.82 remains in force. G.O.Ms.No.22, dated 23.10.2024, is also struck down. However, G.O.Ms.No.277, dated 09.12.1994, remains in force, permitting licensees to recover duty at 6 paise per unit, subject to exemptions. The Court found the amendments regarding categorization of consumers and Section 7 to be excessive delegation. The G.Os were struck down as they were based on invalid provisions or were themselves beyond the scope of the enabling provisions. The Court did not decide on the issue of notification for bringing the 2020 Act into force.

Key Issues

1. Whether the amendment to Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939, as amended by the Andhra Pradesh Electricity Duty Amendment Act, 2020, the Andhra Pradesh Electricity Duty Second Amendment Act, 2024, and Andhra Pradesh Electricity Duty Amendment Act, 2024 (Act No. 10 of 2024), is unconstitutional due to excessive delegation or abdication of essential legislative functions by the State Legislature? The petitioner argued that the legislature had improperly delegated its core function of fixing duty rates and categories of consumers. The respondents contended that the amendments were valid exercises of legislative power. 2. Whether Section 7(1) of the Andhra Pradesh Electricity Duty Act, 1939, as amended by the Andhra Pradesh Electricity Duty Second Amendment Act, 2024, is unconstitutional and liable to be struck down? The petitioner argued this section also suffered from excessive delegation. The respondents did not record specific arguments on this point. 3. Whether G.O.Ms.No.7, dated 08.04.2022, levying electricity duty at Rs. 1/- per unit on energy sales to industrial and commercial consumers, is vitiated by colourable exercise of power, gross overreach, interference with Central Government policy, and violation of Article 14 of the Constitution? The petitioner contended this G.O. was arbitrary and discriminatory. The respondents argued it was a valid exercise of power based on the amended Act. 4. Whether G.O.Ms.No.22, dated 23.10.2023, permitting licensees to recover electricity duty from consumers, is vitiated by lack of power and jurisdiction? The petitioner argued the G.O. was beyond the authority of the issuing department. The respondents did not record specific arguments on this point. 5. Whether the aforesaid notifications dated 08.04.2022 and 23.10.2023 are illegal and void for want of any notification to bring the Andhra Pradesh Electricity Duty Amendment Act, 2020, into force as required by Section 12 of the said Act? The petitioner argued that the amendments were not properly notified. The respondents did not record specific arguments on this point.