Grindwell Norton Limited 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 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, which granted power to identify consumer categories for fixing tariff rates. The proviso to Section 3, mandating 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, but 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. 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, 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, Grindwell Norton Limited, 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 sought to declare this notification illegal, arbitrary, and in violation of constitutional provisions, and to set aside the consequential demands made by the respondent, Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL). The petitioner also sought a refund or adjustment of excess electricity duty collected. The writ petition was filed under Article 226 of the Constitution of India.

Key Issues

1. Whether the impugned notification in G.O.Ms.No.7, Energy (Power-III) Department dated 08.04.2022, levying electricity duty at Re 1/- per unit on energy sales to industrial and commercial consumers, is vitiated by colorable exercise of power, gross overreach, interference with statutory policy notifications of the Central Government, and the exclusive statutory power of the State Electricity Regulatory Commission, and is thus illegal, arbitrary, irrational, unreasonable, discriminatory, and 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 Company 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 arguments: The petitioner contended that the G.O. was issued in colorable exercise of power, constituted a gross overreach, interfered with Central Government notifications and the State Electricity Regulatory Commission's powers, and was illegal, arbitrary, irrational, unreasonable, and discriminatory, violating Articles 14 and 19(1)(g). They also argued that the levy was unauthorized due to lack of prior sanction under Section 7(1) of the Electricity Duty Act, 1939. Respondent's arguments: The judgment does not record specific arguments made by the respondents. However, the court's decision references a common order that addressed similar issues.