M/S. K.M.C. Ice Factory vs. State Of Andhra Pradesh

Held

The High Court, by referring to a common order passed by a Division Bench of the same court on 26.06.2025 in W.P.No.29672 of 2023 & batch, disposed of the writ petition. The Division Bench had upheld the amendment to Section 3 of the Andhra Pradesh Electricity Duty Act, 1939, by Act 23 of 2024, to the extent of granting power to the government to fix the rate of duty between six paise and one rupee per unit. However, the amendments to Section 3 by Act 10 of 2021 and Act 23 of 2024, granting power to identify categories of consumers for fixing tariff, were set aside. Consequently, G.O.Ms.No.7, dated 08.04.2022, was struck down. The court held 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 in the Gazette until the rate is modified according to law. The proviso to Section 3, stipulating a minimum duty of 6 paise per unit, was held to remain unaffected. 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. The operative direction was to dispose of the cases in terms of the Division Bench's order, which included striking down G.O.Ms.No.7 and allowing collection of duty at 6 paise per unit.

Facts

The petitioner, M/s. K.M.C. Ice Factory, filed a writ petition challenging G.O.Ms.No.7, Energy (Power-Ill) Department, dated 08.04.2022, which increased electricity duty from Rs.0.06 to Rs.1 per unit for commercial and industrial consumers. The petitioner contended this was an arbitrary and illegal exercise of power under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939. The petitioner also challenged the consequent levy of duty by the Andhra Pradesh Eastern Power Distribution Company Co Ltd (APEPDCL), including an HT bill for March 2025. The petitioner sought to set aside the G.O. and the bill, and to refund excess duty paid. The writ petition was filed under Article 226 of the Constitution of India.

Key Issues

1. Whether G.O.Ms.No.7, Energy (Power-Ill) Department, dated 08.04.2022, which increased electricity duty from Rs.0.06 to Rs.1 per unit for commercial and industrial consumers, is valid and was issued in colourable exercise of power under Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939? 2. Whether the consequent action of the 2nd Respondent (APEPDCL) in levying/recovering electricity duty at the enhanced rate is legal? Petitioner's arguments: The petitioner argued that the G.O. was arbitrary, illegal, unjust, unfair, unreasonable, excessive, and violative of constitutional rights and principles of natural justice. They contended it was a colourable exercise of power under Section 3(1) of the Act and that the enhanced levy by APEPDCL was also illegal. The petitioner sought to set aside the G.O. and the impugned bill, and for a refund of excess duty paid. Revenue/State's arguments: The judgment records that counsel for both sides submitted the issue was covered by a common order of the Division Bench dated 26.06.2025 in W.P.No.29672 of 2023 & batch. The specific arguments of the State are not detailed in this excerpt, but the reference to the Division Bench order implies the State likely defended the G.O. and the levy.