Sthira Pragna Hospitality Limited vs. The State Of Andhra Pradesh

Held

The High Court disposed of the writ petition in terms of the common order dated 26.06.2025 passed by a Division Bench in W.P. No. 29672 of 2023 & batch. The Division Bench held that G.O. Ms. No. 7, dated 08.04.2022, is struck down. The Court upheld the amendment to Section 3 of the Duty Act by Act 23 of 2024, granting the government power to fix the rate of duty between six paise and one rupee per unit. However, it set aside amendments to Section 3 by Act 10 of 2021 and Act 23 of 2024, which granted power to identify categories of consumers for fixing tariff rates. The proviso to Section 3, stipulating a minimum duty of 6 paise per unit in the absence of notified rates, remains unaffected. Consequently, 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 until the rate is 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, remains in force, permitting licensees to recover duty at 6 paise per unit, subject to exemptions.

Facts

The petitioner, M/s. Sthira Pragna Hospitality Limited, filed a writ petition challenging G.O. Ms. No. 7 Energy (Power-II) Department dated 08-04-2022, which increased electricity duty from Rs. 0.06 per unit to Rs. 1/- per unit for commercial and industrial consumers. The petitioner argued that this enhanced levy was illegal, arbitrary, and contrary to statutory provisions. They sought a direction to levy electricity duty at the original rate of Rs. 0.06 per unit and to adjust any excess amount paid. The respondents are the State of Andhra Pradesh and its power distribution companies. The writ petition was filed seeking interim relief to prevent disconnection of power supply for non-payment of the enhanced duty.

Key Issues

1. Whether G.O. Ms. No. 7, dated 08.04.2022, which increased the electricity duty for commercial and industrial consumers, is valid and in accordance with the statutory provisions of the Andhra Pradesh Electricity Duty Act, 1939 (the 'Duty Act')? 2. Whether G.O. Ms. No. 22, dated 23.10.2024, which permitted licensees to collect electricity duty as notified in G.O. Ms. No. 7, is valid? Petitioner's arguments: The petitioner contended that the enhanced levy of electricity duty under G.O. Ms. No. 7 was illegal, arbitrary, and contrary to statutory provisions. They sought to pay duty only at the rate of Rs. 0.06 per unit. Respondents' arguments: The judgment notes that the learned counsel appearing on either side submitted that the issue was covered by a common order of the Division Bench. The judgment does not explicitly detail the respondents' specific arguments against the petitioner's challenge to G.O. Ms. No. 7, but implies they supported the validity of the G.O. and the enhanced levy.