TaxTMI 
TaxTMI 
2016 (7) TMI 1649
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.... SLP [C] Nos. 17138-17143/2014, CA No. 5619 of 2016 @ SLP [C] No. 17469/2014, CA No. 5620 of 2016 @ SLP [C] No. 17495/2014, CA No. 5622 of 2016 @ SLP [C] No. 17509/2014, CA Nos. 5623-5625 of 2016 @ SLP [C] Nos. 17860-17862/2014, 2016 @ SLP [C] No. 18331/2014, CA No. 5671 of 2016 @ SLP [C] No. 18334/2014, CA No. 5672 of 2016 @ SLP [C] No. 18354/2014, CA No. 5673 of 2016 @ SLP [C] No. 18358/2014, CA No. 5674 of 2016 @ SLP [C] No. 18395/2014, CA No. 5675 of 2016 @ SLP [C] No. 18458/2014, CA No. 5676 of 2016 @ SLP [C] No. 18956/2014, CA No. 5677 of 2016 @ SLP [C] No. 19116/2014, CA Nos. 5678-5685 of 2016 @ SLP [C] Nos. 19261-19268/2014, CA No. 5686 of 2016 @ SLP [C] No. 19401/2014, CA No. 5687 of 2016 @ SLP [C] No. 19448/2014, CA No. 5688 of 2016 @ SLP [C] No. 19575/2014, CA No. 5689 of 2016 @ SLP [C] No. 19640/2014, CA No. 5690 of 2016 @ SLP [C] No. 19686/2014, CA Nos. 5692-5703 of 2016 @ SLP [C] Nos. 19709-19720/2014, CA No. 5704 of 2016 @ SLP [C] No. 19728/2014, CA No. 5705 of 2016 @ SLP [C] No. 19752/2014, CA No. 5706 of 2016 @ SLP [C] No. 19774/2014, CA Nos. 5707-5709 of 2016 @ SLP [C] Nos. 19782-19784/2014, CA No. 5710 of 2016 @ SLP [C] No. 19785/2014, CA No. 5711 of 2016 @ SLP [....
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.... CA No. 5853 of 2016 @ SLP [C] No. 7102/2015, CA No. 5854 of 2016 @ SLP [C] No. 7096/2015, CA No. 5855 of 2016 @ SLP [C] No. 16494/2015, CA No. 5856 of 2016 @ SLP [C] No. 16617/2015, CA No. 5857 of 2016 @ SLP [C] No. 16487/2015, C.A. No. 8249/2015; CA No. 5858 of 2016 @ SLP [C] No.12607/2015, CA No. 5859 of 2016 @ SLP [C] No. 34088/2015, CA No. 5860 of 2016 @ SLP [C] No. 3063/2016; and CA No. 5861 of 2016 @ SLP [C] No. 3516/2016 For the Appellant : Mr. C. S. N. Mohan Rao, Adv., Mr. Abhijit Sengupta, Adv., Mr. Sudhir Naagar, Adv., Mr. Y. Raja Gopala Rao, Adv., Ms. Vismai Rao, Adv., Mr. Ananga Bhattacharyya, Adv., Mr. B. Ramana Murthy, Adv., Mrs. Sudha Gupta, Adv., Mr. Rakesh Dahiya, Adv., Mr. M. P. Shorawala, Adv., Mr. M. Ram Babu, Adv., Mr. N. Eswara Rao, Adv., for M/s. M. Rambabu & Co., Mr. Senthil Jagadeesan, Adv., Mr. Venkateswara Rao Anumolu, Adv., Mr. G. Umapathy, Adv., for Mr. Rohit K. Singh, AOR, Mr. Sanjay Jain, Adv., Mr. Vikas Mehta, Adv., Ms. Anushree Menon, Adv., Ms. Liz Mathew, Adv., for M/s. Mclm & Co., Mr. D. Mahesh Babu, Adv. and Mr. Danish Zubair Khan, Adv. For the Respondent : Mr. Rakesh K. Sharma, Adv., Mr. K. V. Mohan, Adv. and Mr. G. N. Reddy, ....
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....stment formula was prescribed. Regulation 45C was also inserted providing for subsidies as the State Government may consider appropriate. Regulation 45-B was further amended by way of reforms called the Andhra Pradesh Electricity Regulatory Commission (Conduct of Business) Amendment Regulations, 1 of 2003. They came into force w.e.f. 1.4.2003. The amended Regulation 45-B provided a formula for working out the FSA. Condition No.1 also mentioned that FSA will be distributed among all categories of consumers that existed in the quarter. However the consumption by the agricultural sector will be excluded till the Commission is satisfied that metering of agricultural consumption is complete, as may be notified from Tariff orders from time to time. As per section 61 of the Act of 2003, the Commission has to be guided by the aforesaid provisions. As the Central Government had not framed the national electricity policy or interim policy, as such Regulation No.9 of 2004 was notified by the A.P. Electricity Regulatory Commission. The Commission made the transitory Regulations in exercise of the power conferred under section 181 read with section 61 of the Act of 2003 called the A.P. Electric....
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....ection 26(9) of the Act of 1998 and section 62(4) of the Act of 2003, insofar as it provides for inclusion of any variation other than that arising out of fuel costs alone. It was further submitted that only fuel cost had to be considered and no other charges other than transportation can be included. The FSA formula in Regulation 45B provides for element other than variable cost of all purchases even beyond variation of fuel costs alone and the same transgresses the limits of FSA formula permitted under the Act. Since the provision of section 26(9) of the Act of 1998 and section 62 of the Act of 2003 provide for variation of tariff more than once in a financial year the exception provided is with respect to FSA. Fuel has to be given natural meaning. In fact, the negative imperative of no variation of tariff more than once is being violated. Condition Nos.5, 10 and 11 of the formula are also ultra vires to the aforesaid provisions. It was also submitted that providing for exclusion of agricultural consumption till metering of agricultural services are complete as contained in Condition 1 of Regulation 45-B is bad in law and contrary to the mandate of section 55(1) of the Act of 200....
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....2003 or in the Regulations of 2005 framed thereunder. The meaning and scope of fuel surcharge is given in Regulation 45-B of Regulations of 1999. The formula contains the components to form part of FSA and had been implemented for the last more than one decade. FSA has been determined as per the formula prescribed under Regulation 45-B. It is incorrect to submit that FSA should be confined to variation of fuel cost. Condition Nos.1, 5, 10 and 11 of Regulation 45-B have been notified in the Gazette, therefore, there is complete compliance of the provisions contained in section 55(1) of the Act of 2003. The Commission is empowered to differentiate according to consumer's load factor or power factor etc. as provided in section 26(7) of the Act of 1998. Similar provisions are contained in section 62(3) of the Act of 2003. The Commission has power to frame the regulations under sections 26(9) and 54 of the Act of 1998 with respect to FSA and under section 62(4) of the Act of 2003. FSA is a related surcharge levied to meet the increased cost of generation and purchase of electricity. The vires of section 62(4) of the Act of 2003 have not been questioned and the challenge to the vires of ....
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.... provisions of this Act; and (c) the interest of the consumers. (3) Where the Commission, departs from factors specified in the Sixth Schedule of the Electricity (Supply) Act, 1948 while determining the licensees' revenues and tariffs, it shall record the reasons therefor in writing. (4) Any methodology or procedure specified by the Commission under sub-sections (1), (2), and (3) above shall be to ensure that the objectives and purposes of the Act are duly achieved. (5) Every licensee shall provide to the Commission in a format as specified by the Commission at least 3 months before the ensuing financial year full details of its calculation for that financial year of the expected aggregate revenue from charges which it believes it is permitted to recover pursuant to the terms of its licence and thereafter it shall furnish such further information as the Commission may reasonably require to assess the licensee's calculation. Within 90 days of the date on which the licensee has furnished all the information that the Commission requires, the Commission shall notify the licensee either- (a) that it accepts the licensee's tariff p....
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....provisions of sub-section (7). If the Commission considers that the proposed tariff or amended tariff of a licensee does not satisfy any of the provisions of sub-section (7), it shall, within 60 days of receipt of all the information which it required, and after consultation with the Commission Advisory Committee and the licensee, notify the licensee that the proposed tariff or amended tariff is unacceptable to the Commission and it shall provide to the licensee an alternative tariff or amended tariff which shall be implemented by the licensee. The licensee shall not amend any tariff unless the amendment has been approved by the Commission. (10) Notwithstanding anything contained in Sections 57-A and 57-B of the Electricity (Supply) Act, 1948, no Rating Committee shall be constituted after the date of this enactment and the Commission shall secure that licensees comply with the provisions of their licences regarding their charges for the sale of electricity (both wholesale and retail) and for the connection to and use of their assets or systems in accordance with the provisions of this Act. Explanation : -- In this section, - (a) "the expected revenue fro....
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.... Notwithstanding such repeal,- (a) anything done or any action taken or purported to have been done or taken including any rule, notification, inspection order or notice made or issued or any appointment, confirmation or declaration made or any licence, permission, authorisation or exemption granted or any document or instrument executed or any direction given under the repealed laws shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act; (b) the provisions contained in sections 12 to 18 of the Indian Electricity Act, 1910 and rules made thereunder shall have effect until the rules under sections 67 to 69 of this Act are made; (c) the Indian Electricity Rules, 1956 made under Section 37 of the Indian Electricity Act, 1910 (9 of 1910) as it stood before such repeal shall continue to be in force till the regulations under section 53 of this Act are made; (d) all rules made under sub-section (1) of section 69 of the Electricity (Supply) Act, 1948 (54 of 1948) shall continue to have effect until such rules are rescinded or modified, as the case ma....
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....ding for fuel surcharge adjustment formula. Regulation 45-B had been substituted in 2003 which is extracted hereunder: "45-B: Unless otherwise agreed by the Commission, the amount eligible for recovery towards the Fuel Surcharge Adjustment (FSA) for the price and mix variations in the quantity of energy to be purchased as per the tariff order during a quarter '1' shall be determined as per the following formula, aggregated for the quarter '1'. Fi = (Pi x Ei +FCi + Z + Ai) Qi Where Pi is the difference in the Weighted Average Variable Cost in Rupees adjusted to four decimal points, of power purchase cost in quarter '1' for the power purchase quantity mentioned in the tariff order compared to the Weighted Average Variable Cost adopted in the tariff order. Ei is the energy purchase as mentioned in the tariff order in K wh during the quarter to be submitted for each of the generating stations. FCi difference in Rupees, of the actual total fixed charges of the generating stations from the base values adopted in the tariff order. Qi is the actual energy sold to all categories in K wh in the quarter in DISCOM or RESCO, s....
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....e shall publish the FSA approved by the Commission in one English and one Telugu daily newspaper with circulation in the area of supply, for general information of the consumers, and shall make available copies of the FSA order for the relevant quarter to the public on request, at a reasonable cost. (9) The FSA shall be implemented after 7 days of such publication. (10) The actual variable costs and Fixed costs computed for Central Generating Stations 9CGS) should exclude the effect of UI charges. (11) The FSA will include not only fixed costs of two part tariff but also of single part tariff wherever applicable". (By Order of the Commission) S. SURYA PRAKASA RAO, Secretary to Commission Hyderabad, 23-06-2003." 12. Sections 61 and 62 of the Act of 2003 deal with the tariff regulations and determination of tariff. The provisions are extracted hereunder : "61. Tariff regulations. -- The Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely:- (a) the principles and methodologie....
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.... sale of electricity. (2) The Appropriate Commission may require a licensee or a generating company to furnish separate details, as may be specified in respect of generation, transmission and distribution for determination of tariff. (3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required. (4) No tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified. (5) The Commission may require a licensee or a generating company to comply with such procedure as may be specified for calculating the expected revenues from the tariff and charges which he or it is permitted to recover. (6) If any licensee or ....
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....Electricity Policy and tariff policy to be notified by the Central Government. As the Central Government has not framed the National Electricity Policy and tariff policy till date, the Commission has not finalized the aforementioned terms and conditions for the determination of tariff. The Commission is also in the process of finalizing various other Regulations under the Electricity Act, 2003. The Commission will be notifying these Regulations including the Conduct of Business Regulations under the Electricity Act, 2003. The Commission therefore decided to make a transitory Regulation to be in force till the new Regulations are framed and accordingly published a draft Regulation in the A.P. Gazette on 16-06-2004 seeking comments and suggestions of interested persons by 26-06-2004. No suggestions for any changes/modifications have however been received. In exercise of the powers conferred on the A.P. Electricity Regulatory Commission under Section 181 read with 61 of the Electricity Act, 2003 (Act 36 of 2003) and other powers enabling the Commission in that behalf, the Commission here makes the following Regulation, namely: 1. (i) This Regulation may be called the....
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....ure of the Distribution Licensee considered as "controllable" and "uncontrollable" has been specified in Regulation 10. The cost of power purchase is uncontrollable. It is also provided in Regulation 10(4) that the Distribution Licensee shall be eligible to claim variations in "uncontrollable" items in the ARR. Regulation 24 of Regulations, 2005 deals with the saving. Same is extracted hereunder : "24. SAVING 1. Nothing in this Regulation shall be deemed to limit or otherwise affect the power of the Commission to make such orders as may be necessary to meet the ends of justice or to prevent abuse of the process of the Commission. 2. Nothing in this Regulation shall bar the Commission from adopting in conformity with the provisions of the Act, a procedure, at variance with any of the provisions of this Regulation, if the Commission, in view of the special circumstances of a matter or class of matters and for reasons to be recorded in writing, deems it necessary or expedient for dealing with such a matter or class of matters. 3. Nothing in this Regulation shall, expressly or by implication, bar the Commission from dealing with any matter or exercis....
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.... 12. Similarly, in CIT v. K. Srinivasan (1972) 4 SCC 526 a question arose whether the term 'income tax' as employed in Section 2 of the Finance Act, 1964, would include surcharge and additional surcharge whenever provided. This Court while tracing the concept of surcharge in taxation laws of our country, has observed: (SCR p. 312 : SCC p. 528, para 5) "The power to increase federal tax by surcharge by the Federal legislature was recommended for the first time in the report of the committee on Indian Constitutional Reforms, Vol. I Part I. From para 141 of the proposals it appears that the word 'surcharge' was used compendiously for the special addition to taxes on income imposed in September 1931. The Government of India Act, 1935, Part VII, contained provisions relating to finance, property, contracts and suits. Sections 137 and 138 in Chapter I headed 'finance' provided for levy and collection of certain succession duties, stamp duties, terminal tax, taxes on fares and freights, and taxes on income respectively. In the proviso to Section 137 the federal legislature was empowered to increase at any time any of the duties of taxes leviable under that section by a surch....
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....islation is but an enhancement of the land revenue by imposition of surcharge and it cannot be called a tax on land revenue, as contended by the learned counsel for the appellant. It is a common practice among the Indian legislatures to impose surcharge on existing tax. Even Article 271 of the Constitution speaks of a surcharge for the purpose of the Union being levied by way of increase in the duties or taxes mentioned in Article 269 and Article 270 .... It seems to us that the Act clearly levies land revenue although it is by way of surcharge on the existing land revenue. If this is so, the fact that the surcharge was raised to 100 per cent of the land revenue on the wet and garden land and 75 per cent of the land revenue in respect of dry lands, subject to some minor exceptions, does not change the nature of the imposition." 16. From the aforesaid decisions, it is amply clear that the expression 'surcharge' in the context of taxation means an additional imposition which results in enhancement of the tax and the nature of the additional imposition is the same as the tax on which it is imposed as surcharge. A surcharge on land revenue is an enhancement of the lan....
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....r part of any tariff creates an embargo on deviation of tariff frequently more than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified. Section 62 does not deal with the matter to be provided in determination of fuel surcharge formula. The provisions of section 61 contain principles on which the Commission has to act, it cannot be said to be ultra vires. The fuel surcharge formula in Regulation 45-B is in consonance with the factors provided under sections 61 and 62 of the Act of 2003 and also the provisions contained in section 26 of the Act of 1998. The fixation is as per law laid down by this Court and the statutory guidelines given under section 61 of the Act of 2003 are binding upon the Regulatory Commission and tariff has to be fixed in compliance thereof as held in PTC India Ltd. v. Central Electricity Regulatory Commission, through Secretary (2010) 4 SCC 603 and National Thermal Power Corporation Ltd. v. Madhya Pradesh State Electricity Board & Ors. (2011) 15 SCC 580. In Transmission Corporation of Andhra Pradesh Ltd. & Anr. v. Sai Renewable Power Pvt. Ltd. & Ors. (2011) 11 SCC 3....
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.... the formula given in para 16.7.2. The formula considered by this Court in Rohtas Industries (supra) and relevant discussion is extracted hereunder : "9. The next argument advanced on behalf of the appellants was that even if the Board is legally entitled to levy the fuel surcharge, that can only be for the purpose of recouping the amounts actually paid by the Board by way of "fuel surcharge" to the Damodar Valley Corporation and the U.P. State Electricity Board for the quantities of energy purchased by the Board from those sources and the extra cost that the Board had actually to incur on fuel consumed in those two generating stations at Patratu and Barauni. From the counter-affidavit filed on behalf of the Board, it is seen that in respect of the increase in the cost of production of electricity in the two generating stations of the Board, the fuel surcharge has taken into account only that part of the increase in cost which is relatable to the increased price of the coal and oil i.e. fuel alone. The increase in expenditure referable to the enhancement in cost of the energy generated on other accounts such as wages, maintenance, etc. has not been taken into account in th....
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....ontents of paragraph 16.7.3. From a reading of these provisions it is abundantly clear that the entire increase in cost incurred in the purchase of energy from the D.V.C. and the U.P. State Electricity Board has to go into the computation of the surcharge leviable under paragraph 16.7. The contention to the contrary advanced by the appellants is therefore, only to be rejected. There is no ambiguity whatever in the words used in Cl so as to require us to take light from paragraph 16.7.3 for the purpose of understanding their scope and meaning. xxx xxx xxx 18. Some of the appellants have endeavoured to persuade us to go into the minutest details of the mechanism of the tariff fixation effected by the Board in an endeavour to demonstrate in relation thereto that a factor here or a factor there which ought to have been taken into account has been ignored. We have declined to go into those factors which are really in the nature of matters of price fixation policy and the Court will be exceeding its jurisdiction if it is to embark upon a scrutiny of matters of this kind which are essentially in the domain of the executive to determine, subject, of course, to the constitutiona....
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.... B2 + C2 + D2 + E2 + F2 + G2 + H2).... Whereas, S1 = Average fuel surcharge per unit in paise applicable during the financial year. A1, B1, C1 = Units generated from PTPS, BTPS and MTPS respectively. D1, E1, F1, G1, H1 = Units purchased from DVC, U.P. SEB, OSEB, NTPC, PGCIL and any other source respectively. A2, B2, C2 = Units sold, out of sent out from PTPS, BTPS and MTPS on which fuel surcharge is leviable. D2, E2, F2, G2, H2 = Units sold, out of purchased from DVC, U.P. SEB, OSEB, NTPC, PGCIL and any other source respectively during the year in which fuel surcharge is leviable. A3, B3, C3 = Increase in average cost of fuel surcharge in paise per unit computed for Board's generation at PTPS, BTPS and MTPS. D3, E3, F3, G3, H3 = Increase in average unit rate of purchase of energy from DVC, U.P. SEB, OSEB, NTPC, PGCIL and any other source respectively during the year for which the surcharge is to be calculated. The said increase to be calculated with respect to the year 1992-1993 (after amendment, read 1991-1992). (In the above, PTPS stands for Patratu Thermal Power Station, BTPS ....
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....in view of the decision of this Court in Rohtas Industries (supra) and Pulak Enterprises (supra) and in view of the provisions of the Act of 1998 and the Act of 2003. Scope of interference : 23. The scope of interference in judicial review in such matters reserved for expert bodies is limited. The court cannot substitute its opinion. It has been laid down by this Court that price fixation is not the function of the court. This Court in Pulak Enterprises (supra) has discussed the scope of interference in such a matter thus : "29. The significance of the question as to whether fixing the rate of fuel surcharge is a legislative function or a non-legislative function is that if the function is held to be legislative, in the absence of any provision in that regard the principles of natural justice would not be applicable and the scope of judicial review would also be limited to plea of discrimination i.e. violation of Article 14 of the Constitution of India. As a general proposition, the law on the point is settled. 30. In Prag Ice and Oil Mills v. Union of India (1978) 3 SCC 459 a seven-Judge Bench of this Court by majority observed: (SCC p. 490, para 52) ....
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....lic notice and a public hearing before say, for example, levying a municipal rate-in which case the substantial non-observance of the statutorily prescribed mode of observing natural justice may have the effect of invalidating the subordinate legislation. ... But, where the legislature has not chosen to provide for any notice or hearing, no one can insist upon it and it will not be permissible to read natural justice into such legislative activity." Reference may also be made to a Constitution Bench decision in Shri Sitaram Sugar Co. Ltd. v. Union of India (1990) 3 SCC 223. 34. In a sense, fixing rate of fuel surcharge under Clause 16.10 of the tariff notification is different from fixing the tariff under Section 49 of the Act. Fuel surcharge is undoubtedly a part of tariff. But fixing rates of consumption charges or the guaranteed charges or the fixed charges or the delayed payment surcharge, etc. and fixing rates of fuel surcharge do not stand on a par. Though rates of consumption charges, etc. are based on objective materials, there is enough scope for flexibility in fixing the rates. It also involves policy to fix different rates for different categories of co....
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....3 contain an embargo on variation of tariff more than once in a financial year. Negative words are prohibitory and are ordinarily used as legislative devise to make a statute imperative as laid down by this Court in M. Pentiah & Ors. v. Muddala Veeramallappa & Ors. AIR 1961 1107 and as emphasized by this Court in Mannalal Khetan & Ors. v. Kedar Nath Khetan & Ors. 1977 (2) SCC 424. However, there is a positive mandate as to FSA variation which cannot be ignored and has to be given full effect. While doing so there is no variation of tariff as contemplated under the aforesaid provisions. Mechanism of determination of tariff is different. In Re : Disrimination vis-à-vis Agriculture Sector : 27. A challenge has been made to Regulation 45-B submitting that it casts additional burden without authority of law inasmuch as the letter "Q" in the formula is subject to condition 1 and therefore excludes the consumption by agricultural sector and does not permit distribution of additional charge among all consumers for the actual energy sold to them. It makes all the consumers not only to pay for the energy consumed by them but also for the electricity consumed in the agricultural ....
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....egories, viz. "domestic", "commercial (i)", "commercial (ii)", "street light", "irrigation", "light tension industrial" (small scale industrial upto 100 h.p.), "11 k.v. h.t.s.", "33 k.v. h.t.s.", "132 k.v. h.t.s." and "railway traction (25 k.v.)". It is seen from the materials on record for us that the industries between themselves consume nearly 65 per cent of the total quantity of energy supplied by the Board. Apparently with a view to encouraging the establishment of industries in the State, the general tariff rate applicable in respect of high tension supply to industries and factories has been fixed at rates which are much lower when compared to those applicable to other types of consumers. While the general rate applicable for supply of high tension electric energy for industries of the class to which the appellants belong was 22 paise per unit, consumers belonging to "commercial" categories were charged at rates ranging between 48 paise to 58 paise per unit, "agricultural" consumers at 29 paise per unit, "low tension" consumers at 34 to 38 paise per unit and "domestic" consumers at rates ranging between 38 to 43 paise per unit. Thus, in the fixation of the general tariff rat....
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....ure which the Board had to incur in the generation of electricity in the two power stations run by the Board and in the purchase of power from the two outside sources, namely, the D.V.C. and the U.P. State Electricity Board and 65 per cent of the total quantity of energy supplied by the Board is consumed by the industrial and railway traction consumers. A classification of these bulk consumers has a rational nexus with the object and purposes of the levy of surcharge. Having regard to all these facts and circumstances, we find no substance in the contention advanced by some of the appellants that the imposition of fuel surcharge under paragraph 16.7 of the 1979 tariff is arbitrary and violative of Article 14 of the Constitution." 30. In Hindustan Zinc Ltd. etc. etc. v. Andhra Pradesh State Electricity Board & Ors. (1991) 3 SCC 299 placing burden of enhanced tariff on high tension consumers including power intensive industries was held not unreasonable and discriminatory since consumers consisted a separate class. The challenge on the ground of making good the loss on supply of electricity at cheaper rates was also repelled. This Court also laid down that the court could not stri....
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....om each source being nearly equal and the entire electricity generated is fed into a common grid, from which it is supplied to all categories of consumers. On this basis, it was argued that the rise in the fuel cost which led to the fuel cost adjustment applicable only to the HT consumers was unreasonable and discriminatory since the burden of rise in fuel cost was placed only on the HT consumers. In our opinion, this argument has no merit. The HT consumers, including the power intensive consumers, are known power guzzlers and in power intensive industries, electricity is really a raw material. This category of consumers, therefore, forms a distinct class separate from other consumers like LT consumers who are much smaller consumers. There is also a rational nexus of this classification with the object sought to be achieved. Moreover, the power intensive consumers have been enjoying the benefit of a concessional tariff for quite some time, which too is a relevant factor to justify this classification. Placing the burden of fuel cost adjustment on these power guzzlers, who had the benefit of concessional tariff for quite some time and have also a better capacity to pay, cannot, ther....
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....f Rupee : 32. It was also submitted on behalf of the appellant that Regulation 45B that letter 'Z' in the formula for which the Commission to apply the change in cost of rupee for a period beyond the period of supply of electricity to the consumers without any time limit, the submission in this regard is baseless and cannot be accepted. As a matter of fact the fuel surcharge is determined as per the formula which takes into account the change in cost of rupee for a period extending in the past beyond the relevant quarter. There is nothing bad in it as there is change in the cost of rupees which can be allowed by the Commission for realization of fuel surcharge as and when it is determined. It is a method of determining the actual value to be paid in rupees and cannot be said to be illegal or arbitrary at all. It is in consonance with business norms. In Re : Vagueness of Formula : 33. It was also submitted that letter 'A' in the formula is vague and unrealistic so as to permit the Commission to impose additional burden unrelated to escalation of fuel cost under the guise of FSA. The submission is too tenuous to be accepted and proceeds on assumption that only escalation in ....
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....any subsidy to any consumer or class of consumers in the tariff determined by the State Commission under section 62, the State Government shall, notwithstanding any direction which may be given under section 108, pay, in advance and in such manner as may be specified, the amount to compensate the person affected by the grant of subsidy in the manner the State Commission may direct, as a condition for the licence or any other person concerned to implement the subsidy provided for by the State Government: Provided that no such direction of the State Government shall be operative if the payment is not made in accordance with the provisions contained in this section and the tariff fixed by the State Commission shall be applicable from the date of issue of orders by the Commission in this regard." 36. Considering the condition of farmers which is pathetic and they are unable to face the burden, it is rightly pointed out on behalf of the Commission that the State Government had given them certain concessions in the form of subsidy. However the Commission had excluded them from meeting the fuel surcharge adjustment charges. Provision of section 65 relating to subsidy by the St....
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....o provision has been made in the regulations framed in the year 2005. On facts also, the Regulation 45-B was implemented subsequently and had been again amended in the year 2013. It has operated for more than a decade for determination of FSA. In Re : Procedural lapse in framing Regulations : 38. The submission raised that amended Regulations were without previous publication as envisaged under section 181(3) of the Act of 2003, as such they are void due to non-compliance of the said provision. It is apparent that Regulation 9/2004 was previously notified as mentioned in the notification itself. A draft of regulations was published seeking suggestions and comments. No suggestions for changes/modification were submitted. As such the regulations are in compliance with the provision of section 181 read with section 61. Thus we find no violation of the provision of section 181(3). The contention that there was no previous publication is factually incorrect. Effect of Regulations of 2005 : 39. Submission raised that the FSA can be realized in terms of the Regulations of 2005 cannot be accepted for the simple reason that the Regulations of 2005 do not deal with FSA and there ....