M/S Sri Venkateswara Rice Mill vs. The State Of Andhra Pradesh

Held

The Court, referencing a common order passed by a Division Bench in W.P. No. 29672 of 2023 & batch, held that G.O.M.S. No. 7 dated April 8, 2022, is struck down. The reasoning was that while the amendment to Section 3 of the Duty Act, granting the government power to fix rates between six paise and one rupee per unit, was upheld, the power to identify categories of consumers for fixing tariff rates was set aside. Consequently, G.O.M.S. No. 7, which was based on this invalid categorization, could not stand. Similarly, G.O.M.S. No. 22 dated October 23, 2024, was also struck down as it provided sanction to collect duty fixed under the now-struck-down G.O.M.S. No. 7. However, the Court clarified 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 until the rate is modified according to law. The Court also upheld the proviso to Section 3, stipulating a minimum duty of 6 paise per unit, and G.O.M.S. No. 277 dated December 9, 1994, which remains in force, permitting licensees to recover duty at 6 paise per unit.

Facts

The petitioner, M/s Sri Venkateswara Rice Mill, challenged the action of the State of Andhra Pradesh in issuing G.O.M.S. No. 7 dated April 8, 2022, which exorbitantly increased the 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. Consequently, the second respondent, Andhra Pradesh Eastern Power Distribution Corporation Limited (APEPDCL), began levying Electricity Duty at the enhanced rate, reflected in LT bills from April 2022. The petitioner sought to declare the G.O. and consequential bills illegal, arbitrary, and violative of constitutional rights, seeking a refund of excess duty paid and an injunction against future enhanced levies. The case was filed under Article 226 of the Constitution.

Key Issues

1. Whether G.O.M.S. No. 7 dated April 8, 2022, issued by the State of Andhra Pradesh, is valid? The petitioner argued that the G.O. was an illegal, arbitrary, and colourable exercise of power under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939, violating constitutional rights and principles of natural justice, and was contrary to the National Tariff Policy 2016 and the Andhra Pradesh Electricity Regulatory Commission's orders. The respondents contended that the G.O. was issued in accordance with the amended provisions of the Electricity Duty Act, empowering the government to fix different rates for different consumer categories. 2. Whether G.O.M.S. No. 22 dated October 23, 2024, which accorded permission to licensees to recover Electricity Duty as notified in G.O.M.S. No. 7, is valid? The petitioner argued this G.O. was also illegal. The respondents likely argued it was a consequential measure to facilitate collection as per the law.