Supreme Court rules electricity tariff concessions withdrawal applies prospectively, not retrospectively, modifying prior judgment.

The SC held that the Government Order withdrawing electricity tariff concessions retrospectively should only apply prospectively from the order's date. The Kerala State Electricity Board's application of commercial tariffs was invalid as it contravened the State's policy treating hotels as an industry. The SC upheld the Board's right to recover dues incurred under the previous legal framework, dismissing the argument based on Section 56(2) of the Electricity Act, 2003. The HC's judgment was modified accordingly, and the appeals were allowed with costs.

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Issues Involved:
1. Withdrawal of electricity tariff concessions from an anterior date.
2. Application of commercial tariff despite hotels being considered an industry.
3. Legality of raising bills after a period of two years under Section 56(2) of the Electricity Act, 2003.

Detailed Analysis:

Withdrawal of Electricity Tariff Concessions from an Anterior Date:
The appellants, owners of hotels in Kerala, were initially granted various concessions, including electricity tariff concessions, under a policy treating tourism as an industry. These concessions were later withdrawn by a Government Order dated 26.9.2000, effective retrospectively from 15.5.1999. The appellants argued that the concessions should not have been withdrawn from an anterior date. The court held that while the State has the power to review and alter policy decisions, such changes should generally be prospective unless explicitly stated otherwise. The retrospective withdrawal of concessions without adequate notice was deemed unreasonable and violative of the principle of promissory estoppel. The court emphasized that any policy decision with retrospective effect must be explicitly stated and justified by overriding public interest, which was not adequately demonstrated in this case.

Application of Commercial Tariff Despite Hotels Being Considered an Industry:
The appellants contended that the Kerala State Electricity Board (the Board) could not apply commercial tariffs as the hotels were classified as an industry. The court noted that the Board is bound by the State's policy decisions under Section 78A of the Electricity (Supply) Act, 1948, which directed the application of industrial tariffs to the hotels. The Board's unilateral decision to apply commercial tariffs was deemed invalid as the State's policy was binding on the Board. The court held that the State could grant subsidies from its own funds instead of directing the Board to provide concessions, but any such change must be prospective.

Legality of Raising Bills After a Period of Two Years:
The appellants argued that under Section 56(2) of the Electricity Act, 2003, no bills could be raised after two years. The court clarified that the 2003 Act does not apply to bills raised under the Electricity (Supply) Act, 1948. The liabilities incurred under the previous Act continue to be valid, and the limitation period under Section 56(2) of the 2003 Act does not apply retrospectively. The court upheld the Board's right to recover dues incurred before the enactment of the 2003 Act, emphasizing that statutory liabilities and their consequences persist unless explicitly repealed.

Conclusion:
The Supreme Court held that the Government Order dated 26.9.2000, which withdrew electricity tariff concessions retrospectively, should only be applied prospectively from the date of the order. The Board's application of commercial tariffs was invalid as it contravened the State's binding policy decision. The court also upheld the Board's right to raise bills for dues incurred under the previous legal framework, dismissing the argument based on Section 56(2) of the 2003 Act. The High Court's judgment was modified to reflect these findings, and the appeals were allowed with costs.

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