The State Of Andhra Pradesh vs. Saiglobal Yarntex INDIA PVT LTD

Held

The Court upheld the amendment to Section 3 of the Andhra Pradesh Electricity Duty Act, 1939, by Act 23 of 2024, to the extent it empowers the government to fix duty rates between six paise and one rupee per unit. However, it struck down amendments to Section 3 (by Act 10 of 2021 and Act 23 of 2024) and Section 7 (by Act 23 of 2024) that granted the government power to identify categories of consumers for fixing tariff rates, deeming them violative of Article 265 of the Constitution and constituting excessive delegation. Consequently, G.O.Ms.No.7, dated 08.04.2022, which fixed differential rates for different consumer categories, was struck down. The Court affirmed the validity of the proviso to Section 3, stipulating a minimum duty of 6 paise per unit. G.O.Ms.No.22, dated 23.10.2024, was also struck down as it was based on the invalid G.O.Ms.No.7. However, the Court held that the government is entitled to collect duty at the rate of 6 paise per unit, and G.O.Ms.No.277, dated 09.12.1994, remains in force, permitting licensees to recover duty at 6 paise per unit. Exemptions for agricultural consumers under G.O.Ms.No.82, dated 07.07.2003, were preserved.

Facts

The petitioners, A.P. Textile Mills Association and others, challenged amendments to the Andhra Pradesh Electricity Duty Act, 1939, and related Government Orders (G.Os). Specifically, they contested amendments that allowed the government to fix electricity duty rates between six paise and one rupee per unit and to identify different categories of consumers for differential rates. The petitioners argued that these amendments were retrospective and amounted to excessive delegation of power. The State and the distribution companies (DISCOMs) defended the amendments and G.Os, asserting their validity and legality. The core dispute revolved around the authority of the State to levy and collect electricity duty under the amended provisions and the validity of specific government orders issued pursuant to these amendments.

Key Issues

1. Whether the amendment to Section 3 of the Andhra Pradesh Electricity Duty Act, 1939, by Act 23 of 2024, which empowers the government to fix electricity duty rates between six paise and one rupee per unit, is valid? The petitioner contended that this amendment is retrospective and thus invalid. The respondents argued for its validity. 2. Whether the amendments to Section 7 of the Andhra Pradesh Electricity Duty Act, 1939, by Act 23 of 2024, which permit the collection of electricity duty, are valid? The petitioner argued that these amendments are retrospective and constitute excessive delegation. The respondents defended their legality. 3. Whether G.O.Ms.No.7, dated 08.04.2022, is valid? The petitioner challenged this G.O. as being based on an invalid amendment and amounting to excessive delegation. The respondents supported its validity. 4. Whether G.O.Ms.No.22, dated 23.10.2024, is valid? The petitioner argued that this G.O. is consequential to G.O.Ms.No.7, which they deemed invalid. The respondents contended for its validity.