The Alamuru Thaluka Rice Millers Association vs. The State Of Andhra Pradesh

Held

The High Court disposed of the writ petition in terms of the common order dated June 26, 2025, passed by the Division Bench in W.P.No.29672 of 2023 & batch. The Division Bench's order, which was made applicable, 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 duty rates between six paise and one rupee per unit, was upheld. However, amendments by Act 10 of 2021 and Act 23 of 2024, granting power to identify consumer categories for fixing tariff rates, were set aside. The proviso stipulating a minimum duty of 6 paise per unit in the absence of notification was upheld. Amendments to Section 7 by Act 23 of 2024 were struck down. Crucially, G.O.Ms.No.7, dated 08.04.2022, was struck down. The government was permitted to collect duty at 6 paise per unit from the date Act 10 of 2021 was published until the rate was modified lawfully. G.O.Ms.No.22, dated 23.10.2024, was also struck down, with G.O.Ms.No.277, dated 09.12.1994, remaining in force, allowing licensees to recover duty at 6 paise per unit, subject to exemptions.

Facts

The petitioner, Alamuru Thaluka Rice Millers Association, representing 128 industrial consumers, challenged G.O.Ms.No.7, Energy (Power-III) Department, dated April 8, 2022, which significantly increased the electricity duty from Rs. 0.06 to Rs. 1.00 per unit for commercial and industrial consumers. The petitioner argued this increase was arbitrary and illegal. The respondents included the State of Andhra Pradesh and electricity distribution companies. The petition sought to set aside the G.O. and consequential enhanced electricity bills issued from April 2022, and to direct the refund or adjustment of excess duty paid. Interim applications were filed seeking a stay on the G.O. and collection of duty at the enhanced rate.

Key Issues

1. Whether the action of the 1st respondent in issuing G.O.Ms.No.7, dated 08.04.2022, by exorbitantly increasing the levy of Electricity Duty from Rs. 0.06 per unit to Rs. 1.00 on energy sales to commercial and industrial consumers, is arbitrary, illegal, unjust, unfair, unreasonable, excessive, and violative of Fundamental and Constitutional Rights, Principles of Natural Justice, the National Tariff Policy 2016, and the common order on Tariff for Retail Sale of Electricity for FY 2022-23, under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939. Petitioner's Contentions: The petitioner argued that the G.O. was issued in colorable exercise of power, was contrary to law, and that the consequential actions of respondents 2 to 4 in levying duty at the enhanced rate were illegal. They sought to set aside the G.O. and the enhanced electricity bills, and to direct refund or adjustment of excess duty paid. Revenue/State's Contentions: The judgment does not record specific contentions from the revenue or state respondents. However, it notes that learned counsel appearing on either side submitted that the issue was covered by a common order of the Division Bench.