Kamalapuram Road Metals vs. The State Of Ap

Held

The Court held that the amendment to Section 3 of the Electricity Duty Act by Act 23 of 2024, empowering the government to fix the duty rate between six paise and one rupee per unit, is upheld. However, the amendments to Section 3 by Act 10 of 2021 and Act 23 of 2024, which grant the government power to identify consumer categories for tariff fixing, are set aside. The proviso to Section 3, mandating a minimum duty of 6 paise per unit in the absence of a notified rate, remains unaffected. The amendments to Section 7 by Act 23 of 2024 are struck down. Consequently, G.O.Ms.No.7, dated April 8, 2022, is struck down. Despite this, the government is entitled to collect duty at the rate of 6 paise per unit from the date Act 10 of 2021 was published until the rate is modified legally. The exemption for agricultural consumers under G.O.Ms.No.82 remains in force. G.O.Ms.No.22 is also struck down, but G.O.Ms.No.277 remains in force, permitting licensees to recover duty at 6 paise per unit, subject to exemptions. The ratio is that while the government has power to fix duty rates, the method of categorizing consumers for tariff fixing and certain amendments were found to be beyond the statutory power, leading to the striking down of the specific G.O. that imposed the higher duty.

Facts

The petitioner, Kamalapuram Road Metals, filed a writ petition challenging G.O.Ms.No.7, Energy (Power-III) Department, dated April 8, 2022. This Government Order (G.O.) increased the Electricity Duty from 0.06 paise per unit to Rs.1.00 paise on energy sales to commercial and industrial consumers. The petitioner contended that this action by the respondents, the State of Andhra Pradesh and others, was illegal and arbitrary. The court noted that the issue was covered by a common order previously passed by a Division Bench of the same High Court in W.P.No.29672 of 2023 and batch, dated June 26, 2025.

Key Issues

1. Whether the amendment to Section 3 of the Electricity 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, is valid? The petitioner likely argued against the increased duty, while the respondent would have defended the government's power to levy it. 2. Whether the amendments to Section 3, by Act 10 of 2021 and Act 23 of 2024, granting the government power to identify consumer categories for tariff fixing, are valid? The petitioner would likely challenge the categorization leading to increased duty, whereas the respondent would uphold the government's authority. 3. Whether the proviso to Section 3, stipulating a minimum duty of 6 paise per unit in the absence of a notified rate, is valid? This question pertains to the default rate. 4. Whether the amendments to Section 7, by Act 23 of 2024, are valid? The petitioner would likely challenge these amendments if they contributed to the increased duty or its collection. 5. Whether G.O.Ms.No.7, dated April 8, 2022, which increased the Electricity Duty, is valid? This is the primary issue raised by the petitioner, who likely argued it was arbitrary and illegal. The respondent would defend the G.O. 6. Whether G.O.Ms.No.22, dated October 23, 2024, is valid, particularly concerning the sanction to collect duty fixed under G.O.Ms.No.7? The petitioner would likely challenge this G.O. as consequential to the invalidity of G.O.Ms.No.7.