Sionc Pharmaceuticals Private Limited vs. The State Of Andhra Pradesh

Held

The High Court disposed of the writ petition in terms of the common order dated 26.06.2025 passed by the Division Bench in W.P.No.29672 of 2023 & batch. The Division Bench's order held that the amendment to Section 3 of the Duty Act by Act 23 of 2024, granting power to the government to fix the rate of duty between six paise and one rupee per unit, is upheld. However, the amendment to Section 3 by Act 10 of 2021 and Act 23 of 2024, granting power to identify consumer categories for tariff fixing, was set aside. The proviso to Section 3, stipulating a minimum duty of 6 paise per unit in the absence of notified rates, remains unaffected. 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 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. 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, permitting licensees to recover duty at 6 paise per unit. The exemption for agricultural consumers under G.O.Ms.No.82 remains in force. The writ petition was disposed of accordingly.

Facts

The petitioner, Sionc Pharmaceuticals Private Limited, filed a writ petition challenging G.O.Ms.No.7 Energy (Power-III) Department dated 08.04.2022, which increased the electricity duty from Rs.0.06 paise per unit to Rs.1.00 paise on energy sales to commercial and industrial consumers. The petitioner sought a declaration that this levy was illegal and arbitrary, and requested that the duty be levied at the original rate of Rs.0.06 paise per unit and any refundable amount be adjusted in future bills. Interim applications were also filed seeking to prevent power disconnection for recovery of the enhanced duty and to vacate an interim order. The respondents were the State of Andhra Pradesh and the Eastern Power Distribution Company of Andhra Pradesh Ltd.

Key Issues

1. Whether G.O.Ms.No.7, dated 08.04.2022, which increased the electricity duty on energy sales to commercial and industrial consumers from Rs.0.06 paise to Rs.1.00 per unit, is illegal, arbitrary, and contrary to law, as contended by the petitioner. 2. Whether the amendment to Section 3 of the Duty Act by Act 10 of 2021 and Act 23 of 2024, granting power to the government to identify categories of consumers for fixing tariff rates, is valid. 3. Whether the amendments to Section 7 of the Duty Act by Act 23 of 2024 are valid. Petitioner's arguments: The petitioner argued that the levy of electricity duty at Rs.1.00 per unit was illegal and arbitrary. They relied on the principle that the government's power to levy duty is subject to statutory provisions and that arbitrary increases without proper justification are unsustainable. They sought relief by way of adjustment of refundable amounts and levy of duty at the original rate. Revenue/State's arguments: The judgment indicates that the parties agreed that the issue was covered by a common order passed by a Division Bench in a batch of writ petitions. Therefore, specific arguments from the revenue or state regarding the validity of G.O.Ms.No.7 or the relevant statutory amendments were not separately recorded in this order, as the matter was disposed of based on the precedent.