An Andhra Pradesh High Court Bench of Justice Ravi Nath Tilhari has explained the difference between tariff and duty while hearing a plea against the demand for electricity duty by the Central Power Distribution Corporation of Andhra Pradesh Limited in its monthly current consumption bills.

Counsel K Gopal Chowdary, among others, appeared for the petitioners, while Government Pleader P Shreyas Reddy, among others, appeared for the respondents.

In this case, the Court was hearing a petition challenging a notification of the Energy Department. The challenge the demand of electricity duty by the 2nd respondent, Central Power Distribution Corporation of Andhra Pradesh Limited, in its monthly current consumption bills.

The petitioner's argument was based on the premise that this duty cannot be recovered from them by the "licensee" under Section 3 of the APED (Andhra Pradesh Electricity Duty) Act.

The petitioners alleged that is the responsibility of the "licensee" to bear the burden of paying electricity duty, and they argue that there is no prior authorization from the State Government under Section 7(1) of the APED Act, 1939, allowing the "licensees" to recover electricity duty either entirely or partially from industrial and commercial consumers.

Furthermore, the petitioners contend that any electricity duty that has already been paid or collected from them should be refunded.

They challenged the validity of the impugned notification primarily on the grounds that it unfairly discriminates against industrial and commercial consumers and represents a potentially unconstitutional exercise of power, violating Article 14 of the Indian Constitution, which guarantees the right to equality before the law.

The Court took note that the State Government notified the rate of duty as Re.1 per unit for the commercial and industrial category consumers, but continuing with the exemption on for the agriculture consumers category as also continuing with six paise duty per unit for the domestic consumers category.

Subsequently, the Court analysed a catena of Judgments including Gujarat Urja Vikas Nigam Limited v. Solar Semiconductor Power Company (India) Private Limited and others and State of WB vs Kesoram Industries, to observe that,

- In exercise of its statutory duty under Section 62 of the Electricity Act the Commission has fixed the tariff rate. The word "tariff" means a Schedule of a standard/prices or charges provided to the category or categories for procurement by licensing from generating company, wholesome or bulk or retail/various categories of consumers. After taking into consideration the factors in Section 61 (1) (a) to (i), the State Commission determines the tariff rate for various categories and the same is applied uniformly throughout the State.

- A levy essentially in the nature of a tax and within the power of the State Legislature cannot be annulled as unconstitutional merely because it may have an effect on the price of the commodity.

Subsequently, the Court held that since the petitioners failed to establish that all the category of consumers stand on equal footing, the challenge on the ground of violation of Article 14 of the Constitution of India that the equals cannot be treated unequally, was unsustainable. In that context, the Court observed that, "Equal treatment in the matter of imposition of duty, equally on all or at equal rate would amount to violation of the equality clause, as unequals cannot be treated equally."

The petitions were decided accordingly. No orders as to costs.

Cause Title: Saiglobal Yarntex India Pvt Ltd. vs The State of Andhra Pradesh

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Andhra Pradesh High CourtJustice Ravi Nath TilhariElectricity Act

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