Vasudha Pharma Chem LTD.(Unit-Ii) vs. State Of Andhra Pradesh

Held

The High Court disposed of the writ petition in terms of the common order passed by the Division Bench in W.P.No.29672 of 2023 & batch dated 26.06.2025. The Division Bench's order struck down G.O.Ms.No.7, dated 08.04.2022. However, it permitted the government 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 of duty is modified in accordance with law. The exemption granted to agricultural consumers under G.O.Ms.No.82, dated 07.07.2003, was also confirmed to remain in force. The Division Bench upheld the amendment to Section 3 of the Duty Act by Act 23 of 2024, granting power to the government to fix the rate of duty between six paise to one rupee per unit, but set aside amendments granting power to identify consumer categories for tariff fixing. Amendments to Section 7 by Act 23 of 2024 were struck down. G.O.Ms.No.22, dated 23.10.2024, was also struck down, with G.O.Ms.No.277, dated 09.12.1994, remaining in force, permitting licensees to recover duty at 6 paise per unit.

Facts

The petitioners, Vasudha Pharma Chem Ltd. (Units II, III, IV, and V), filed a writ petition challenging G.O.Ms.No.7 Energy (Power-III) Department dated 08.04.2022. This Government Order (G.O.) increased the Electricity Duty from Rs. 0.06 Paise per unit to Rs. 1.00 Paise on energy sales to commercial and industrial consumers. The petitioners sought a declaration that this action was illegal and arbitrary, and requested that the respondents adjust refundable amounts in future bills, levying duty only at Rs. 0.06 Paise per unit. Interim applications were filed seeking to prevent power disconnection for recovery of the increased duty and to vacate any interim orders. The State of Andhra Pradesh and Eastern Power Distribution Company of Andhra Pradesh Ltd. were the respondents.

Key Issues

1. Whether the action of the Respondents in issuing G.O.Ms.No.7 Energy (Power-III) Department dated 08.04.2022, which increased the Electricity Duty from Rs.0.06 Paise per unit to Rs.1.00 Paise on energy sales to commercial and industrial consumers, is illegal, arbitrary, and contrary to law? (Question of law, turning on the Andhra Pradesh Electricity Duty Act, 1949, as amended). Petitioner's arguments: The petitioners contended that the increased levy was illegal, arbitrary, and contrary to law. They sought a direction to adjust refundable amounts in future bills and to levy duty at the original rate of Rs. 0.06 Paise per unit. Respondent's arguments: The respondents did not present specific arguments in the judgment, as the matter was disposed of based on a previous Division Bench order. The judgment notes that learned counsel appearing on either side submitted that the issue was covered by a common order passed by the Division Bench.