M/S. Veerabhadra Exports (P) LTD. 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 a Division Bench in W.P.No.29672 of 2023 & batch. The Division Bench's order upheld the amendment to Section 3 of the Act by Act 23 of 2024, granting the government power to fix duty rates between six paise and one rupee per unit. However, it set aside amendments by Act 10 of 2021 and Act 23 of 2024 to the extent they granted power to identify consumer categories for fixing tariff rates. The proviso for a minimum duty of 6 paise per unit in the absence of notified rates 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 entitled to collect duty at 6 paise per unit from the date Act 10 of 2021 was published until the rate was 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.

Facts

The petitioner, M/s. Veerabhadra Exports (P) Ltd., challenged G.O.Ms.No.7, dated 08.04.2022, issued by the State of Andhra Pradesh, which exorbitantly increased the Electricity Duty from Rs. 0.06 per unit to Rs. 1.00 on energy sales to commercial and industrial consumers. The petitioner argued this was an arbitrary and illegal exercise of power under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939. The consequential action by the second respondent, Andhra Pradesh Eastern Power Distribution Corporation Limited (APEPDCL), in levying this enhanced duty through High Tension (HT) bills from April 2022 onwards, was also challenged. The petitioner sought to set aside the G.O. and the enhanced bills, and to refund or adjust excess duty paid.

Key Issues

1. Whether the action of the first 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 in the State of Andhra Pradesh, 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, is valid in law? Petitioner's Contention: The petitioner argued that the G.O. was issued in colorable exercise of powers conferred under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939, and was contrary to various legal provisions and policies. The petitioner sought to set aside the G.O. and consequential bills. Respondent's Contention: The judgment does not record specific arguments from the 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.