Maithan Alloys LTD vs. The State Of Ap

Held

The High Court disposed of the writ petition in terms of a common order dated 26.06.2025 passed by a Division Bench in W.P.No.29672 of 2023 & batch. The Division Bench order upheld the amendment to Section 3 of the Electricity Duty Act 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 by Act 10 of 2021 and Act 23 of 2024 that allowed the government to identify consumer categories for tariff fixing. The proviso for a minimum duty of 6 paise per unit in the absence of notification 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 permitted to collect duty at 6 paise per unit from the date Act 10 of 2021 was published until the rate was modified lawfully. 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, with G.O.Ms.No.277 dated 09.12.1994 remaining in force, permitting recovery of duty at 6 paise per unit, subject to exemptions.

Facts

The petitioner, Maithan Alloys Ltd., filed a writ petition challenging 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 contended this was an arbitrary and discriminatory exercise of power, interfering with central government policy and the State Electricity Regulatory Commission's statutory functions. The petitioner sought to declare the G.O. and consequential actions by the 2nd Respondent (Eastern Power Distribution Company of AP Ltd.) in levying electricity duty illegal, and sought refund or adjustment of excess amounts collected. The dispute pertains to the period from April 2022 onwards.

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 statutory powers of the State Electricity Regulatory Commission, 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's 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 arguments: The petitioner argued that the impugned G.O. was unconstitutional and illegal, violating fundamental rights and statutory provisions. They sought to set aside the G.O. and consequential demands, and sought refund or adjustment of excess duty paid. Respondent's arguments: The respondents' arguments are not explicitly recorded in the provided text, but the court's disposal indicates reliance on a previous Division Bench order that addressed similar issues.