Sri Chakra Oils And Extractions (P) LTD vs. The State Of Ap

Held

The High Court disposed of the writ petition in terms of the common order dated June 26, 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, the amendments to Section 3 by Act 10 of 2021 and Act 23 of 2024, to the extent of granting power to identify consumer categories for fixing tariff rates, were set aside. The proviso to Section 3, stipulating a minimum duty of 6 paise per unit in the absence of notification, remains 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 according to law. 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.

Facts

The petitioner, Sri Chakra Oils and Extractions (P) Ltd., challenged G.O.Ms.No.7, Energy (Power-III) Department, dated April 8, 2022, issued by the State of Andhra Pradesh. This Government Order (G.O.) exorbitantly increased the levy of Electricity Duty from Rs. 0.06 per unit to Rs. 1.00 on energy sales to commercial and industrial consumers. The petitioner argued that this action was arbitrary and illegal, violating their constitutional rights and contrary to various policies and orders. The consequential action of the second respondent, Andhra Pradesh Eastern Power Distribution Corporation Limited (APEPDCL), in levying this enhanced duty 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 refund or adjust the excess electricity duty paid.

Key Issues

1. Whether the action of the first respondent in issuing G.O.Ms.No.7, 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, the National Tariff Policy 2016, and the common order on Tariff for Retail Sale of Electricity for FY 2022-23 passed by the Andhra Pradesh Electricity Regulatory Commission, is a valid exercise of power conferred under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939. Petitioner's Contention: The petitioner argued that the G.O. was issued in colorable exercise of power, was arbitrary, illegal, unjust, unfair, unreasonable, excessive, and violative of their fundamental and constitutional rights, principles of natural justice, the National Tariff Policy 2016, and the common order of the Andhra Pradesh Electricity Regulatory Commission. They sought to set aside the G.O. and consequential bills. Revenue/State's Contention: 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.