M/S Jagadeesh Chemicals 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 26.06.2025. The Division Bench's order upheld the amendment to Section 3 of the 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 struck down amendments to Section 3 by Act 10 of 2021 and Act 23 of 2024, to the extent they granted power to identify consumer categories for tariff fixing. G.O.Ms.No.7, dated 08.04.2022, was struck down, but 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. The exemption for agricultural consumers under G.O.Ms.No.82 remained in force. G.O.Ms.No.22 was also struck down, but G.O.Ms.No.277 remained in force, permitting licensees to recover duty at 6 paise per unit.

Facts

The petitioner, M/s. Jagadeesh Chemicals, filed a writ petition challenging G.O.M.S.NO. 7, Energy (Power-III) Department, dated 08-04-2022, 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 argued this was a colourable exercise of power under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939, and that the consequential action by the second respondent (APEPDCL) in levying duty at the enhanced rate, reflected in H.T. bills from April 2022, was arbitrary and illegal. The petitioner sought to set aside the G.O. and the enhanced electricity bills, and to direct a refund or adjustment of excess duty paid.

Key Issues

1. Whether the action of the first respondent in issuing G.O.M.S.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 a colourable exercise of powers conferred under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939, and thus arbitrary, illegal, unjust, unfair, unreasonable, excessive, and violative of Fundamental and Constitutional Rights, Principles of Natural Justice, National Tariff Policy 2016, and the common order on Tariff for Retail Sale of Electricity for FY 2022-23. Petitioner's Contention: The petitioner argued that the G.O. was issued in a colourable exercise of power, making it arbitrary, illegal, and violative of various rights and policies. The petitioner sought to set aside the G.O. and consequential bills. Respondent's Contention: The judgment does not explicitly record arguments from the respondents. However, it notes that the issue is covered by a common order of the Division Bench.