B S R Rice Mill vs. The State Of Andhra Pradesh

Held

The High Court disposed of the writ petition in terms of a common order passed by a Division Bench in W.P.No.29672 of 2023 & batch dated 26.06.2025. The Division Bench had struck down G.O.Ms.No.7 dated 08.04.2022. However, it upheld the amendment to Section 3 of the Act by Act 23 of 2024, granting the government power to fix the duty rate between six paise and one rupee per unit. The proviso to Section 3, stipulating a minimum duty of 6 paise per unit in the absence of a notified rate, was also left unaffected. The government was permitted to collect duty at the rate of 6 paise per unit from the date Act 10 of 2021 was published until the rate was modified according to law. The exemption for agricultural consumers under G.O.Ms.No.82 dated 07.07.2003 was also confirmed to remain in force. The court did not go into other contentions against G.O.Ms.No.7 as it was struck down.

Facts

The petitioners, six commercial and industrial consumers of electricity, challenged G.O.Ms.No.7 (Energy Power-III Department) dated 08.04.2022, issued by the State of Andhra Pradesh. This G.O. increased the electricity duty from Rs. 0.06 paise to Rs. 1/- per unit on energy sales to commercial and industrial consumers. The petitioners contended that this action was an arbitrary and colourable exercise of power under Section 31 of the Andhra Pradesh Electricity Duty Act, 1939, and violated their constitutional rights. They sought to set aside the G.O. and consequential bills, and to recover excess duty paid. The matter was heard by the High Court of Andhra Pradesh.

Key Issues

1. Whether the action of the State of Andhra Pradesh in issuing G.O.Ms.No.7 dated 08.04.2022, increasing the electricity duty from Rs. 0.06 paise to Rs. 1/- per unit on energy sales to commercial and industrial consumers, is a colourable exercise of power under Section 31 of the Andhra Pradesh Electricity Duty Act, 1939, and consequently illegal, arbitrary, irrational, unreasonable, discriminatory, and in violation of Article 14 of the Constitution. 2. Whether the consequential action of the electricity distribution company in levying duty at the enhanced rate is illegal and contrary to the common order on Tariff for retail sale of electricity for FY 2022-2023. Petitioner's arguments: The petitioners argued that the increase in electricity duty was an arbitrary and colourable exercise of power, violating principles of natural justice and Article 14 of the Constitution. They also contended it was an excessive delegation of power and contrary to the tariff order. They relied on the common order on Tariff for retail sale of electricity for FY 2022-2023. Respondent's arguments: The judgment does not explicitly record arguments made by the respondents. However, the court's decision references a prior Division Bench order that addressed similar issues concerning the G.O. and amendments to the Electricity Duty Act.