Ap Textile Mills Association vs. The State Of Andhra Pradesh

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 grants the government power to fix duty rates between six paise and one rupee per unit. However, the Court struck down the amendments to Section 3 by Act 10 of 2021 and Act 23 of 2024, which granted the government power to identify categories of consumers for fixing tariff rates, deeming it excessive delegation and violative of Article 265 of the Constitution. The proviso to Section 3, stipulating a minimum duty of 6 paise per unit, was upheld. The amendments to Section 7 by Act 23 of 2024 were struck down. Consequently, G.O.Ms.No.7, dated 08.04.2022, was struck down, but the government was permitted to collect duty at the rate of 6 paise per unit. G.O.Ms.No.22, dated 23.10.2024, was also struck down, but G.O.Ms.No.277, dated 09.12.1994, was held to remain in force, permitting licensees to recover duty at 6 paise per unit. Exemptions for agricultural consumers were maintained.

Facts

The petitioners, A.P. Textile Mills Association and others, filed writ petitions challenging various Government Orders (G.Os) and amendments related to electricity duty levied by the State of Andhra Pradesh. The core of the dispute revolved around the State's power to fix different rates of electricity duty for different categories of consumers and the validity of specific G.Os that implemented these differential rates. The petitioners argued that such differential treatment was arbitrary and violated constitutional principles. The respondents, including the State of Andhra Pradesh and its power distribution companies, contended that the State had the legislative competence to levy and differentiate electricity duty.

Key Issues

1. Whether the amendment to Section 3 of the Andhra Pradesh Electricity Duty Act, 1939, by Act 10 of 2021 and Act 23 of 2024, granting the government power to identify categories of consumers for fixing tariff rates, is valid? The petitioner argued this power is excessive delegation and arbitrary. The respondent contended it is within the State's legislative power. 2. Whether the amendment to Section 7 of the Andhra Pradesh Electricity Duty Act, 1939, by Act 23 of 2024, which permits collection of electricity duty in the future, is valid? The petitioner argued it is open-ended and militates against proper consideration. The respondent argued it is a necessary provision for future revenue collection. 3. Whether G.O.Ms.No.7, dated 08.04.2022, is valid? The petitioner argued it was based on an invalid amendment and arbitrary categorization. The respondent argued it was issued based on the amended Section 3 and upheld by the court previously. 4. Whether G.O.Ms.No.22, dated 23.10.2024, is valid? The petitioner argued it was an attempt to validate G.O.Ms.No.7, which was invalid. The respondent argued it was issued as an abundant precaution to permit recovery of duty.