M/S. Rami Reddy Agro Industry vs. The State Of Andhra Pradesh

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'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 to Section 3 by Act 10 of 2021 and Act 23 of 2024, granting power to identify consumer categories for tariff fixing, were set aside. The proviso stipulating a minimum duty of 6 paise per unit in the absence of notification remained 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. The government was 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 lawfully. 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, subject to exemptions.

Facts

The petitioner, M/s. Rami Reddy Agro Industry, filed a writ petition challenging G.O.M.S.NO. 7, Energy (Power-III) Department, dated 08-04-2022, 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 contended that this action was arbitrary, illegal, and violative of constitutional rights, common orders on tariff, and the National Tariff Policy 2016. The consequential action of the second respondent in levying Electricity Duty at the enhanced rate through High Tension (HT) bills from April 2022 onwards was also challenged. The petitioner sought to set aside the G.O. and the impugned bills, and to direct the refund or adjustment of excess electricity duty paid.

Key Issues

1. Whether the action of the respondent in issuing G.O.M.S.NO. 7, Energy (Power-III) Department, 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, is arbitrary, illegal, unjust, unfair, unreasonable, excessive, and violative of Fundamental and Constitutional Rights, Principles of Natural Justice, National Tariff Policy 2016, and common orders on tariff for the financial year 2022-23, in colourable exercise of powers under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939. Petitioner's Arguments: The petitioner argued that the G.O. was arbitrary, illegal, unjust, unfair, unreasonable, excessive, and violative of constitutional rights, principles of natural justice, the National Tariff Policy 2016, and the common order on tariff for the financial year 2022-23. They contended that the increase in duty was a colourable exercise of power under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939. Respondent's Arguments: The judgment does not record specific arguments from the respondents. However, it notes that the issue was covered by a common order of the Division Bench.