M/S. Santoshimata Oils And Fats (P) LTD vs. The State Of Andhra Pradesh

Held

The High Court disposed of the writ petition in terms of the common order passed by a Division Bench in W.P.No.29672 of 2023 & batch dated June 26, 2025. The Division Bench had struck down G.O.Ms.No.7, dated April 8, 2022. However, it held that the government is entitled to collect Duty at the rate of 6 paise per unit throughout the period from the date Act 10 of 2021 was published in the Gazette until the rate of duty is modified in accordance with law. The exemption granted to agricultural consumers under G.O.Ms.No.82, dated July 7, 2003, was also confirmed to remain in force. The Division Bench also struck down G.O.Ms.No.22, dated October 23, 2024, but permitted licensees to recover duty at the rate of 6 paise per unit under G.O.Ms.No.277, dated December 9, 1994, subject to any exemptions. The amendment to Section 3 of the Act by Act 23 of 2024, granting power to fix duty between six paise and one rupee, was upheld, but the power to identify consumer categories for tariff fixing was set aside. Amendments to Section 7 by Act 23 of 2024 were struck down. The ratio is that while the government has the power to fix electricity duty rates within a specified range, the arbitrary increase beyond the statutory minimum without proper justification and adherence to policy and regulatory framework is impermissible. The operative direction was to dispose of the writ petition in terms of the Division Bench's order, implying relief consistent with that order.

Facts

The petitioner, M/s. Santoshimata Oils and Fats (P) Ltd., filed a writ petition challenging G.O.M.S.NO. 7, Energy (Power-III) Department, dated April 8, 2022, which 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 contended that this action was arbitrary, illegal, and violative of constitutional rights, national policies, and regulatory orders. The consequential action of the second respondent, Andhra Pradesh Southern Power Distribution Corporation Limited (APSPDCL), in levying this enhanced duty on 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 first respondent in issuing G.O.M.S.NO. 7, dated April 8, 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, contrary to the National Tariff Policy 2016, contrary to the common order on Tariff for Retail Sale of Electricity for FY 2022-23, and contrary to law? (Mixed question of law and fact, turning on the Andhra Pradesh Electricity Duty Act, 1939, National Tariff Policy 2016, and AP Electricity Regulatory Commission orders). Petitioner's contentions: The increase in electricity duty was arbitrary, illegal, unjust, unfair, unreasonable, excessive, and violated 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. The petitioner relied on the principles of natural justice and relevant policies and orders. Respondent's contentions: The judgment does not record specific contentions made by the respondents. However, the context implies they defended the G.O. and the consequential levy.