Category-specific tariff cannot bind wind projects outside accelerated depreciation scheme; contractual clauses cannot override statutory tariff determination.

Wind energy projects that did not avail accelerated depreciation were not bound by the higher tariff fixed for projects that did, because tariff under the Electricity Act must follow the statutory framework and the State Commission had limited that tariff to the relevant category. The projects could therefore seek separate tariff determination before the State Commission. The power purchase agreements did not bar that request, since a contractual tariff clause could not override the statutory tariff regime or the Commission's express category-based distinction, and no binding commitment had been given to avail accelerated depreciation when the statutory option arose. The Supreme Court held that the category-specific tariff could not be imposed on projects outside that category.

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Issues: (i) Whether wind energy projects that did not avail accelerated depreciation were entitled to seek project-wise tariff determination before the State Commission; (ii) whether the fixed tariff in the power purchase agreements barred such projects from seeking a different tariff.

Issue (i): Whether wind energy projects that did not avail accelerated depreciation were entitled to seek project-wise tariff determination before the State Commission.

Analysis: Tariff under the Electricity Act, 2003 is fixed statutorily by the Appropriate Commission under the tariff framework, and the State Commission had itself made the higher fixed tariff applicable only to projects that availed accelerated depreciation under the Income-tax Act, 1961 and the Income-Tax Rules, 1962. The statutory scheme governing depreciation required the option to be exercised at the relevant time for the assessment year in which generation commenced. Since the respondent companies did not avail accelerated depreciation, the tariff meant for projects availing that benefit could not be applied to them. The Commission had also specifically indicated that projects not availing the benefit could seek separate consideration on a case-by-case basis.

Conclusion: The respondent companies were entitled to approach the State Commission for determination of a separate tariff.

Issue (ii): Whether the fixed tariff in the power purchase agreements barred such projects from seeking a different tariff.

Analysis: The power purchase agreements could not override the statutory tariff framework or the State Commission's express stipulation that the fixed tariff applied only to projects availing accelerated depreciation. The generating companies had not given any binding commitment at the time of contracting that they would necessarily avail accelerated depreciation when the statutory option arose. In the absence of such commitment, a tariff clause framed for a different category of projects could not estop them from seeking the correct tariff applicable to their projects. The public character of the procuring entity and the renewable energy policy framework also reinforced that the contractual clause could not be used to impose an inapplicable tariff.

Conclusion: The power purchase agreements did not bar the respondent companies from seeking separate tariff determination.

Final Conclusion: The statutory tariff fixed for wind projects availing accelerated depreciation could not be imposed on projects that did not avail that benefit, and the appeals failed.

Ratio Decidendi: A tariff fixed by the Commission for a specific category of renewable energy projects cannot be enforced against projects outside that category, and a contractual tariff clause cannot defeat the statutory power of tariff determination where no binding commitment was obtained at the time the statutory option arose.

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