Krishna Insitute Of Medical Sciences vs. The State Of Ap

Held

The High Court disposed of the writ petition in terms of a common order passed by a Division Bench in W.P.No.29672 of 2023 & batch dated 26.06.2025. The Division Bench's order upheld the amendment to Section 3 of the 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. However, it set aside amendments to Section 3 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 to Section 3, stipulating a minimum duty of 6 paise per unit in the absence of notified rates, was left 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. Nevertheless, the government was held entitled 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 legally. The exemption for agricultural consumers under G.O.Ms.No.82 remained in force. G.O.Ms.No.22 dated 23.10.2024 was also struck down, but G.O.Ms.No.277 dated 09.12.1994 remained in force, permitting licensees to recover duty at 6 paise per unit, subject to exemptions.

Facts

The petitioner, Krishna Institute of Medical Sciences, challenged G.O.Ms.No.7, Energy (Power-III) Department dated 08.04.2022, which levied electricity duty at Re 1/- per unit on energy sales to industrial and commercial consumers. The petitioner argued this was a colorable exercise of power, overreach, and interfered with central government policy and the State Electricity Regulatory Commission's statutory powers. They also challenged the consequential action of the respondent, Andhra Pradesh Central Power Distribution Corporation (APCPDCL), in levying and collecting this duty from April 2022 without prior sanction under Section 7(1) of the Electricity Duty Act, 1939. The petitioner sought to set aside the notification and demands, and for a refund or adjustment of excess duty collected. The writ petition was filed in 2023.

Key Issues

1. Whether G.O.Ms.No.7, Energy (Power-III) Department dated 08.04.2022, levying electricity duty at Re 1/- per unit on industrial and commercial consumers, is vitiated by colorable exercise of power, gross overreach, interference with Central Government policy and the State Electricity Regulatory Commission's powers, illegality, arbitrariness, irrationality, unreasonableness, and hostile discrimination, in violation of Articles 14 and 19(1)(g) of the Constitution. 2. Whether the consequential action of the 2nd Respondent in levying and collecting electricity duty on the Petitioner in HT bills from April 2022 without previous sanction from the State Government under Section 7(1) of the Electricity Duty Act, 1939, is illegal, arbitrary, and unauthorized. Petitioner's contentions: The impugned notification (G.O.Ms.No.7) suffers from colorable exercise of power, gross overreach, and interference with statutory policy notifications of the Central Government and the exclusive statutory power of the State Electricity Regulatory Commission. It is also alleged to be illegal, arbitrary, irrational, unreasonable, and discriminatory, violating Articles 14 and 19(1)(g) of the Constitution. The consequential collection of duty by the 2nd Respondent is also challenged as illegal and unauthorized due to lack of prior sanction under Section 7(1) of the Electricity Duty Act, 1939. Respondents' contentions: Not recorded in the judgment.