M/S. Hotel Manasarovar vs. The 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 June 26, 2025. The Division Bench's order, as referenced, struck down G.O.Ms.No.7, dated April 8, 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 July 7, 2003, was also stated to remain in force. The Division Bench upheld the amendment to Section 3 by Act 23 of 2024, granting power to the government to fix the duty rate between six paise and one rupee per unit, but set aside amendments allowing the government to identify categories of consumers for tariff fixing. Amendments to Section 7 by Act 23 of 2024 were struck down. G.O.Ms.No.22, dated October 23, 2024, was also struck down, while G.O.Ms.No.277, dated December 9, 1994, was permitted to remain in force, allowing licensees to recover duty at 6 paise per unit subject to exemptions.

Facts

The petitioner, M/s. Hotel Manasarovar, represented by its authorized signatory, filed a writ petition challenging G.O.Ms.No.7, Energy (Power-III) Department, dated April 8, 2022. This Government Order (G.O.) purportedly increased the levy of Electricity Duty from Rs. 0.06 per unit to Rs. 1.00 per unit on energy sales to commercial and industrial consumers in Andhra Pradesh. The petitioner contended that this action was arbitrary, illegal, and violative of various constitutional and legal provisions. The petitioner sought to set aside the impugned G.O. and consequential electricity bills issued from April 2022, seeking a refund or adjustment of excess duty paid and a direction to not levy duty at the enhanced rate for future charges. The petition was filed before the High Court of Andhra Pradesh.

Key Issues

1. Whether the action of the respondent in issuing G.O.Ms.No.7, Energy (Power-III) Department, dated April 8, 2022, by exorbitantly increasing the levy of Electricity Duty from Rs. 0.06 per unit to Rs. 1.00 on energy sales to commercial and industrial consumers is arbitrary, illegal, unjust, unfair, unreasonable, excessive, and violative of Fundamental and Constitutional Rights, Principles of Natural Justice, National Tariff Policy 2016, and the common order on Tariff for Retail Sale of Electricity for FY 2022-23 passed by the Andhra Pradesh Electricity Regulatory Commission, turning on Section 3(1) of the Andhra Pradesh Electricity Duty Act, 1939. Petitioner's Contentions: The petitioner argued that the G.O. was issued in colorable exercise of power, was contrary to law, and violated constitutional rights. They sought to set aside the G.O. and consequential bills, and sought a refund of excess duty paid. Respondent's Contentions: The judgment does not record specific contentions from the respondents. However, it notes that learned counsel appearing on either side submitted that the issue was covered by a common order of the Division Bench.