M/S Sree Madhava Crushers vs. State Of Andhra Pradesh

Held

The Court held that the amendment to Section 3 of the Andhra Pradesh Electricity Duty Act, 1939, by Act 23 of 2024, granting the government power to fix the rate of duty between six paise and one rupee per unit, is upheld. However, the Court struck down the amendments to Section 3 by Act 10 of 2021 and Act 23 of 2024, to the extent they granted power to the government to identify categories of consumers for fixing tariff rates, finding it to be excessive delegation and violative of Article 265 of the Constitution. Consequently, G.O. Ms. No. 7, dated 08.04.2022, which fixed different rates for different categories, was struck down. The Court clarified that the proviso to Section 3, stipulating a minimum duty of 6 paise per unit, remains valid. The government is entitled to collect duty at 6 paise per unit from the date Act 10 of 2021 was published until the rate is modified legally. G.O. Ms. No. 22, dated 23.10.2024, was also struck down, but G.O. Ms. No. 277, dated 09.12.1994, remains in force, permitting recovery of duty at 6 paise per unit. The amendments to Section 7 by Act 23 of 2024 were struck down. The exemption for agricultural consumers under G.O. Ms. No. 82 remains in force.

Facts

The petitioners, various commercial and industrial consumers of electricity, challenged the action of the respondents (State of Andhra Pradesh and electricity distribution companies) in issuing G.O. Ms. No. 7 dated 08.04.2022, which increased the electricity duty from Rs. 0.06 per unit to Rs. 1.00 per unit for commercial and industrial consumers. The petitioners sought a writ of mandamus to declare this G.O. illegal and arbitrary, and to direct the respondents to adjust the refundable amount in future consumption bills, levying electricity duty only at Rs. 0.06 per unit. They also sought an interim direction not to disconnect power supply for recovery of the enhanced duty. The judgment also discusses G.O. Ms. No. 22 dated 23.10.2024, which further permitted recovery of electricity duty as notified in G.O. Ms. No. 7.

Key Issues

1. Whether 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 to one rupee per unit, is valid? The petitioners argued that the increased duty was arbitrary and contrary to law. The respondents contended that the amendments were for protecting the collection of duty. 2. Whether the amendment to Section 3 of the Act by Act 10 of 2021 and Act 23 of 2024, granting power to the government to identify categories of consumers for fixing tariff rates, is valid? The petitioners argued that the categorization and differential rates were illegal. The respondents did not record specific arguments on this point. 3. Whether G.O. Ms. No. 7, dated 08.04.2022, is valid? The petitioners argued it was illegal and arbitrary. The respondents relied on the amended Section 3 of the Duty Act. 4. Whether G.O. Ms. No. 22, dated 23.10.2024, is valid? The petitioners argued it was illegal. The respondents did not record specific arguments on this point.