M/S. Nagahanuman Fish Packers vs. The State Of Andhra Pradesh

Held

The High Court disposed of the writ petition in terms of a common order dated June 26, 2025, passed by a Division Bench of the same Court in W.P.No.29672 of 2023 & batch. The Division Bench's order addressed several issues related to amendments to the Andhra Pradesh Electricity Duty Act, 1939, and consequential Government Orders. Specifically, the Division Bench struck down G.O.Ms.No.7, dated April 8, 2022. However, it clarified that the government is entitled to collect duty at the rate of 6 paise per unit throughout the period from the date Act 10 of 2021 was published in the Gazette until the rate of duty is modified in accordance with law. The exemption granted to agricultural consumers under G.O.Ms.No.82, dated July 7, 2003, was also affirmed to remain in force. The Division Bench also struck down G.O.Ms.No.22, dated October 23, 2024, but permitted licensees to recover duty at the rate of 6 paise per unit from consumers, subject to any exemptions, referencing G.O.Ms.No.277, dated December 9, 1994. The amendment to Section 3 of the Act by Act 23 of 2024, granting power to fix duty between six paise and one rupee per unit, was upheld, but the power to identify consumer categories for fixing tariff rates by Act 10 of 2021 and Act 23 of 2024 was set aside. Amendments to Section 7 by Act 23 of 2024 were struck down. The ratio decidendi is that while the government has the power to fix electricity duty rates within a prescribed range, the specific G.O. increasing it exorbitantly and the manner of its implementation were found to be unsustainable, leading to its being struck down, with a direction to collect duty at the statutory minimum of 6 paise per unit in the interim.

Facts

The petitioner, M/s. Nagahanuman Fish Packers, a commercial and industrial consumer, challenged G.O.Ms.No.7, dated April 8, 2022, issued by the Energy Department of the State of Andhra Pradesh. This Government Order (G.O.) exorbitantly increased the electricity duty from Rs. 0.06 per unit to Rs. 1.00 per unit on energy sales to commercial and industrial consumers. The petitioner contended that this increase was a colourable exercise of power under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939, and that the consequential action by the second respondent, Andhra Pradesh Eastern Power Distribution Corporation Limited (APEPDCL), in levying this enhanced duty on their High Tension (HT) bills from April 2022 onwards was arbitrary, illegal, and violative of their constitutional rights, principles of natural justice, and relevant tariff policies. The petitioner sought to set aside the impugned G.O. and the enhanced electricity bills, and requested a refund or adjustment of excess duty paid.

Key Issues

1. Whether the action of the first respondent in issuing G.O.Ms.No.7, dated April 8, 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, in purported exercise of powers under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939, is arbitrary, illegal, unjust, unfair, unreasonable, excessive, and violative of fundamental and constitutional rights, principles of natural justice, National Tariff Policy 2016, and the common order on Tariff for Retail Sale of Electricity for FY 2022-23 passed by the Andhra Pradesh Electricity Regulatory Commission. Petitioner's Contentions: The petitioner argued that the increase in electricity duty was a colourable exercise of power, arbitrary, illegal, and violative of various rights and policies. They relied on the Andhra Pradesh Electricity Duty Act, 1939, National Tariff Policy 2016, and the common order of the Andhra Pradesh Electricity Regulatory Commission. Respondent's Contentions: The respondents, represented by the Government Pleader for Energy and counsel for APEPDCL, did not explicitly record arguments in the judgment. However, their participation in the proceedings and the filing of IA No. 1 of 2024 to vacate interim orders and dismiss the writ petition indicate their opposition to the petitioner's claims.