Grasim Industries Limited vs. The State Of Ap

Held

The High Court disposed of the writ petition in terms of the common order passed by the Division Bench in W.P.No.29672 of 2023 & batch dated June 26, 2025. The Division Bench's order 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 and one rupee per unit, is upheld. However, amendments granting power to identify consumer categories for fixing tariff rates (by Act 10 of 2021 and Act 23 of 2024) were set aside. The proviso regarding a minimum duty of 6 paise per unit in the absence of a notified rate remains unaffected. Amendments to Section 7 by Act 23 of 2024 were struck down. Crucially, G.O.Ms.No.7, dated April 8, 2022, was struck down. The government was permitted to collect duty at the rate of 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 October 23, 2024, was also struck down, with G.O.Ms.No.277, dated December 9, 1994, remaining in force, permitting licensees to recover duty at 6 paise per unit, subject to exemptions. The ratio is that while the government can fix a range for electricity duty, specific G.Os. increasing it beyond the statutory minimum without proper procedure or within the permissible limits are liable to be struck down.

Facts

The petitioner, Grasim Industries Limited, filed a writ petition challenging G.O.Ms.No.7, Energy (Power-III) Department dated April 8, 2022, which exorbitantly increased the electricity duty from Rs. 0.06 per unit to Rs. 1 per unit on energy sales to commercial and industrial consumers. The petitioner contended that this action was arbitrary and illegal. The petitioner also challenged the consequent action of the Andhra Pradesh Eastern Power Distribution Company Ltd. (APEPDCL) in levying and recovering electricity duty at the enhanced rate, including raising High Tension (HT) bills from April 2022 to September 2023, and sought a refund of Rs. 17,56,32,712/- paid as excess duty. The petitioner sought to set aside the G.O. and the bills, and to prevent future levy at the enhanced rate.

Key Issues

1. Whether the action of the 1st Respondent in issuing G.O.Ms.No.7, Energy (Power-III) Department dated 08.04.2022, exorbitantly increasing the levy of electricity duty from Rs.0.06 per unit to Rs.1 per unit 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, and contrary to law, in purported exercise of powers under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939? 2. Whether the consequent action of the 2nd Respondent in levying/recovering electricity duty at the enhanced rate, including raising HT Bills from April 2022 to September 2023, is illegal? Petitioner's Contentions: The petitioner argued that the increase in electricity duty was exorbitant and arbitrary, violating their constitutional rights and principles of natural justice. They relied on the fact that the G.O. was issued without proper sanction and was contrary to law. They sought the setting aside of the G.O. and the consequent bills, and a refund of the excess duty paid. Respondent's Contentions: The judgment notes that learned counsel for both sides submitted that the issue was covered by a common order of the Division Bench in W.P.No.29672 of 2023 & batch dated June 26, 2025. No specific arguments for the respondents were recorded beyond this submission.