M/S.V.K.Y.Nails vs. The State Of Andhra Pradesh

Held

The High Court, referencing a common order passed by a Division Bench in W.P. No. 29672 of 2023 & batch dated June 26, 2025, held that G.O. Ms. No. 7 dated April 8, 2022, is struck down. The Court upheld the amendment to Section 3 of the Duty Act to the extent of granting the government power to fix the rate of duty between six paise and one rupee per unit. However, the power to identify categories of consumers for fixing tariff rates was set aside. The proviso to Section 3, stipulating a minimum duty of 6 paise per unit, was upheld. Consequently, the levy of duty at the enhanced rate of Rs. 1/- per unit for commercial and industrial consumers as per G.O. Ms. No. 7 was invalidated. The government is entitled to collect duty at the rate of 6 paise per unit. G.O. Ms. No. 22 dated October 23, 2024, was also struck down, but G.O. Ms. No. 277 dated December 9, 1994, remains in force, permitting the recovery of duty at 6 paise per unit.

Facts

The petitioners, commercial and industrial consumers, challenged G.O. Ms. No. 7 Energy (Power-II) Department dated April 8, 2022, which increased electricity duty from Rs. 0.06 per unit to Rs. 1/- per unit for such consumers. They sought a declaration that this action was illegal and arbitrary, and requested that the respondents be directed not to levy the enhanced duty and to adjust any refundable amounts against future bills, levying duty only at the original rate of Rs. 0.06 per unit. The petitioners also sought interim relief to prevent disconnection of power supply for non-payment of the enhanced duty. The respondents are the State of Andhra Pradesh and the Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL).

Key Issues

1. Whether G.O. Ms. No. 7 dated April 8, 2022, issued by the Energy Department, which increased electricity duty from Rs. 0.06 to Rs. 1/- per unit for commercial and industrial consumers, is valid. Petitioner's contention: The petitioners argued that the G.O. was illegal, arbitrary, and contrary to statutory provisions. They sought to restrain the respondents from levying the enhanced duty and to adjust any excess payments against future bills. Respondent's contention: The respondents contended that the G.O. was issued in accordance with the amended provisions of the Andhra Pradesh Electricity Duty Act, 1939, and that the enhanced duty was legally leviable. They relied on the government's power to fix different rates for different categories of consumers.