AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 1649
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....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 [C] No. 19786/2014, CA Nos. 5712-5731 of....
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..../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, Adv. JUDGMENT ARUN MISHRA, J. 1. Delay....
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....o 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. Electricity Regulatory Commission (Transitory Provisions for ....
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....ct 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 2003; more so, after a lapse of 2 years' period. Time mandate....
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....aning 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 the provisions of section 26(9) of the Act of 1998 has been ....
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....rts 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 proposals and revenue calculations; or (b) that it does not consider the licensee's tariff proposals and revenue calculations to....
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....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 from charges" means the total revenue which a licensee is expected to recover from charges for the level of forecast supply used in the determination under sub-section (5) above in any financial year in respect of goods or serv....
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....nce, 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 may be; (e) all directives issued, before the commencement of this Act, by a State Government under the enactments specified in the Schedule shall continue to apply for the period for which such directions were issued by the State Government. (3) The provisions of the enactmen....
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....e 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, subject to condition No. 1, mentioned here under. Z is the changes in the cost in Rupees as allowed by the Commission for a period extending in the past beyond the relevant quarter. Ai adjustment in Rupees to account for the financial impact of demonstrated incidents of merit order violation on account of controllable factors or any other events the financial impact of which, in the Commission's view, should be ....
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....ing 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 methodologies specified by the Central Commission for determination of the tariff applicable to generating companies and transmission licensees; (b) the generation, transmission, distribution and supply of electricity are conducted on commercial principles; (c) the factors which would encourage competition, efficiency, economical use of the resources, good performance and optimum investments; (d) safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reaso....
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....y 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 a generating company recovers a price or charge exceeding the tariff determined under this section, the excess amount shall be recoverable by the person who has paid such price or charge along with interest equivalent to the bank rate without prejudice to any other liability incurred by the licensee." Section 62(1) provides for determination of tariff for supply of electricity by generating company to a distribution licensee, transmission of electricity, wheeling of electricity and for retail sale of electricity. Section 62(3) enables the Commission to differentiate according to consumer's load factor, power factor, voltage, tota....
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.... 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 A.P. Electricity Regulatory Commission (Transitory Provisions for Determination of Tariff) Regulation, 2004. (ii) This shall be deemed to have come into force on 10th June, 2004. 2. The existing Regulations notified by the Andhra Pradesh Electricity Regulatory Commission, including the A.P. Electricity Regulatory Commission (Conduct of Business) Regulation, 1999, incorporating the provisions relating to determination of tariff and terms and conditions and notified as Regulation No. 2 of 1999 and published in the A.P. Gazette No. 23 dt. 22-07-99 and as amended from time to time as well as all other regulations notified by the Commission from time to time under ....
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....dure, 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 exercising any power under the Act for which no Regulations have been framed, and the Commission may deal with such matters, exercise such powers and discharge such functions in a manner it deems fit." It is clearly provided in Regulation 24(3) that nothing in Regulations of 2005 shall, expressly or by implication, bar the Commission from dealing with any matter or exercising any power under the Act for which no Regulations have been framed. Meaning of 'surcharge' : 15. As to the meaning of 'surcharge', appellants have relied upon various decisions, it is appropriate to mention them. Relying upon The Commissioner of Income Tax, Kerala v. K. Srinivasan 1972 (4) SCC 526, it was submitted that income-tax includes surcharge. Reference has also been made to Sarojini Tea Co. (P) Ltd. v. Colle....
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....tions 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 surcharge for federal purposes and the whole proceeds of any such surcharge were to form part of the revenue of the federation. Sub-section (3) of Section 138 which dealt with taxes on income related to imposition of a surcharge." 13. It was further observed at page 315 of the report: (SCR p. 315 : SCC p. 530, para 10) "The meaning of the word 'surcharge' as given in the Webster's New International Dictionary includes among others 'to charge (one) too much or in addition ...' also 'additional tax'. Thus the meaning of surcharge is to charge in addition or to subject to an additional or extra charge." 14. In C.V. Rajagopalachariar v. State of Madras AIR 1960 Mad 543: (1959) in the context of the Madras Land Revenue Surcharge Act, 1954 and the Madras Land Revenue (Additional Surcharge) Act, 1955, it has been laid down: [AIR p. 545....
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.... 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 land revenue to the extent of the imposition of surcharge. The nature of such imposition is the same viz., land revenue on which it is a surcharge." 16. In State of Orissa & Anr. v. Jayashree Chemicals & Ors. 2004 (13) SCC 594, this Court considered the provisions contained in section 2(g)(v) and section 3 of the Orissa Electricity (Duty) Act, 1961 and held that charge in section 2(g)(v) includes surcharge which amounts to charge on freight. 17. On due consideration of meaning of 'surcharge' in various decisions, in our opinion, nature of surcharge has to be considered as per intendment in which it has been used in the enactment. 'Surcharge' is basically over and above main levy and is in the form of additional charge. It may carry different contours as per provisions of an enactment and different methodology for its determination. In Re : Formula of FSA and its vires : 18. In the b....
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.... 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 34 also, similar proposition was laid down : "56. Sections 61 to 64 of the Electricity Act, 2003 place an obligation upon the appropriate Commission to determine the tariff in accordance with the provisions of this Act. An application for determination of tariff shall be made by the generating company under Section 64 and the tariff has to be determined by the appropriate Commission and it is also required to specify the terms and conditions for determination of the tariff as per the factors and the guidelines specified under Section 61 of the Act." 19. It is also true, as contended on behalf of the appellants that administrative instructions are binding in the absence of statutory guidelines and any breach thereof would be arbitrary as held in Dr. Amarjit Singh Ahluwalia v. The State of Punjab & Ors. (1975) 3 SCC 503 which decision has been followed in B.S. Minhas v. Indian Statistical In....
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.... 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 the fuel surcharge. Such increase in cost of production on account of those other factors has been offset by a revision of the basic general tariff by 16.5 per cent payable not only by the industries but by all classes except the agriculturist class. In respect of the energies purchased by the Board from outside sources, namely, the Damodar Valley Corporation and the U.P. State Electricity Board, the increase in cost per unit incurred by the Board has been included in the computation of the fuel surcharge. We see no substance whatsoever in the contention advanced by the appellants that only such amounts, if any, as might have been paid by the Board to the D.V.C. and the U.P. State Electricity Board as and by way of fuel surcharge can go into the computation of the fuel surcharge levied by the Board under paragraph 16.7 of the 1979 tariff. Though the nomenclature given to the levy is "fuel surcharge" it is reall....
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....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 constitutional limitations." It was submitted on behalf of the appellants that the stand of the Bihar Electricity Board in Rohtas Industries (supra) particularly in para 9 of the report, where it had realized fuel surcharge on the basis of that part of the increase in cost which is relatable to increased price of coal and oil that is fuel alone but a close scrutiny of para 9 makes it clear that in respect of energy purchased by the Board from outside sources namely Damodar Valley Corporation and U.P.State Electricity Board, the increase in cost per unit incurred by the Board has been included in the computation of fuel surcharge and this Court has found no merits in the contention that such amount as might have been paid by the Board to the DVC and the U.P.State Electricity Board as and by way of fuel surcharge can go into the computation of fuel surcharge levied by the Board under the 1979 tariff. The law laid down is that the nomenclature given to the levy as....
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....e 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 for Barauni Thermal Power Station and MTPS for Muzaffarpur Thermal Power Station. They are Board's own generating stations. Likewise, DVC stands for Damodar Valley Corporation, U.P. SEB for Uttar Pradesh State Electricity Board, OSEB for Orissa State Electricity Board, NTPC for National Thermal Power Corporation and PGCIL for Power Grid Corporation of India Ltd. They are external sources of supply of electricity to the Board.)" This Court has laid down that fuel surcharge has to be calculated strictly within the framework of the formula provided in tariff notification. This Court also laid down that 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, and fixing rates of fuel surcharge do not stand on a par. 22. This Court in Pulak Enterprises (supra) has reaffirmed the decision in Rohtas Industries (supra) as to the factors which can be taken into consideration for determination of fuel surcharge. Since determi....
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....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) "52. ... In the ultimate analysis, the mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of [persons], the processual basis of price fixation has to be accepted in the generality of cases as valid." 31. The legal position was reiterated in Rohtas Industries Ltd. v. Bihar SEB (1984) Supp. SCC 161 and Kerala SEB v. S.N. Govinda Prabhu & Bros. (1986) 4 SCC 198 wherein it was observed, " 'price fixation' is neither the forte nor the function of the court" (Kerala SEB case, SCC p. 214, para 10). 32. As regards the nature of the function, in Saraswati Industrial Syndicate Ltd. v. Union of India (1974) 2 SCC 630 the Court had observed (at SCC p. 636, para 13) that "price fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material". It should not, therefore, give rise to a complaint that rule of natural justice has not been followed in fixing the price. In Pra....
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....es. It also involves policy to fix different rates for different categories of consumers. Such is not the position with the fuel surcharge. 35. Clause 16.10.1 specifies the categories coming in the net of the levy and Clause 16.10.3 provides the formula. In simple words, the formula envisages addition of units generated or purchased and increased average cost of fuel and average unit rate of purchase rates and division of the total by the quotient is the average fuel surcharge per unit (expressed in terms of paise) described by denominator S1 in the formula. The whole exercise, it would appear, involves arithmetical accounting. There is no scope for exercise of any discretion or flexibility. This distinction, however, does not help the petitioners. It rather goes against them because if fixing rate of fuel surcharge is just an arithmetical exercise, giving opportunity of hearing would hardly serve any useful purpose." 24. In National Thermal Power Corporation Ltd. (supra), this Court has observed that price fixation is legislative in character. In PTC India Ltd. (supra) also, this Court has held that fixation of tariff like price fixation is legislative in character. The functio....
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....but also for the electricity consumed in the agricultural sector which is arbitrary and contrary to the scheme of the Act and in particular sections 61 and 62. The submission cannot be accepted as differential treatment is permissible within the ken of the provisions of section 26. As provided in section 26(8) in case consumers are similarly placed same tariff has to be applied. Agriculturists and consumers like appellants cannot be said to be similarly placed. It is also provided in section 26(7) that the tariff implemented may differentiate according to the consumer's load factor or power factor, consumer's total consumption of energy during any specified period from the time at which supply is required or paying capacity of category of consumers and need for gross subsidization. Thus paying capacity inter alia is one of the factors which can be used for protective discrimination under discriminatory tariffs as provided in section 26(7)(a). 28. In Real Food Products Ltd. & Ors. v. A.P. State Electricity Board & Ors. 1995 (3) SCC 295, this Court considered the claim of discrimination of HT consumers with agriculturists to be untenable. Concessional tariff extended to agriculturis....
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....Thus, in the fixation of the general tariff rate, a substantial concession has been shown in favour of industrial low tension and high tension consumers. The appellants have no case that any illegality was involved in treating the industrial consumers, as a separate class and granting them the benefit of a preferential treatment for the purpose of fixing the basic rate of levy for supply of electricity. The stand taken by the Board is that it was found absolutely necessary at the time of the revised tariff fixation effected in 1979 to augment its revenue by levying of the additional fuel surcharge in order to offset the heavy increase in expenditure and after taking into account all relevant facts and circumstances, it was decided to distribute that burden amongst the privileged class of consumers, namely those belonging to categories of low tension industrial service, high tension service, extra high tension service and railway traction service. Even after taking into account the fuel surcharge so levied under 1979 tariff, the rates applicable to high tension consumers like the petitioners range between 40.31 paise and 58.80 paise per unit only, while the commercial (ii) consumer ....
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.... also laid down that the court could not strike down the upward revision made as arbitrary unless the Board is found to have shed its public utility character and there is a limited scope of judicial review and this Court further laid down that there is a limited judicial review in the matter of price fixation. The relevant portion is extracted hereunder : "26. It is, therefore, obvious that mere generation of surplus by the Board as a result of adjusting its tariffs when the quantum of surplus has not been specified by the State Government after the 1978 amendment of Section 59 of the Supply Act, cannot invite any criticism unless it is further shown that the surplus generated as a result of the adjustment of tariffs by the Board has resulted in the Board acting as a private trader shedding off its public utility character. In other words, if the profit is made not merely for the sake of profit, but for the purpose of better discharge of its obligations by the Board, it cannot be said that the public enterprise has acted beyond its authority. The Board in the present case has shown that the surplus resulting from upward revision of tariffs applicable to the HT consumers made in ....
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....r capacity to pay, cannot, therefore, be faulted since the consumption in the power intensive industries accounts for a large quantity." The decision in Hindustan Zinc Ltd. (supra) has been followed in Pulak Enterprises (supra). 31. This Court in Association of Industrial Electricity Users v. State of A.P. & Ors. 2002 (3) SCC 711 has considered and upheld the levy of different tariffs. It has laid down thus : "10. We are also unable to agree with the learned counsel for the appellants that the Act does not envisage classification of consumers according to the purpose for which electricity is used. Sub-section (9) of Section 26 does state that the tariff which is fixed shall not show undue preference to any consumer of electricity but then the said sub-section itself permits differentiation according to the consumer's load factor or power factor, consumer's total consumption of energy during the specified period, time at which the supply is required or paying capacity of category of consumers and the need for cross-subsidisation or such tariff as is just and reasonable and be such as to promote economic efficiency in the supply and consumption of electricity and the tariff may a....
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....calation in fuel cost can be levied even the financial year impact of demonstrated incidents of merit order violations on account of controllable factors and any other event which had the financial impact can be given appropriate treatment and can also form part of FSA as laid down by this Court in Rohtas Industries (supra) and Pulak Enterprises (supra). In Re : Metering of consumption : 34. Coming to the submission that as metering is mandated on completion of two years, as such agricultural aspect cannot be included on lapse of said period. Section 55 of the Act of 2003 deals with the use of meters and it is provided that no licensee shall supply electricity after expiry of two years from the appointed date except through installation of a correct meter in accordance with the regulations. The said Commission may also extend the period up to two years for a class or class of persons as may be specified in the notification. The provision made in condition No.1 of Regulation 45-B cannot be said to be repugnant to section 55(1) as it deals with the licensee's obligation to supply electricity after two years only on the basis of metered supply. It has not been achieved so far. Howe....
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....ment is not at all attracted. The matter involved in the present cases is not of subsidy but determination of fuel surcharge formula. Thus, the submission based upon the violation of the provision of section 65 is wholly unwarranted and is liable to be rejected as subsidy has not been included in the determination of fuel surcharge. It cannot be invalidated on the ground of violation of provisions contained in section 65 of the Act of 2003. In Re : Lapse of Regulations of 1999 : 37. Next submission raised on behalf of the appellants is that the Regulations of 1999 as amended in 2003 being the tariff regulation under the Act of 1998, ceased to have effect on 10.6.2004 after one year from the date of coming into force of the said Act, by reason of proviso to section 61 of the Act of 2003. The submission raised is untenable for various reasons. First is that regulations have been framed with effect from 10.6.2004. The proviso to section 61 of the Act of 2003 makes it clear that the terms and conditions for determination of tariff and the enactment specified in the Schedule as they stood before the appointed date, shall continue to apply for a period of one year or until the terms a....
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....as provided in Regulation 24. Moreover, the Act of 1998 had not been repealed and there was re-adoption of the Regulations of 1999 in the year 2004. It is also factually incorrect submission that FSA had been realized under the Regulations of 2005 after framing of the said regulations. In fact FSA had been determined as rightly contended on behalf of the Commission under Regulation 45-B as amended in 2003 for more than a decade. A challenge had been raised for the first time after 10 years. It is obvious that the parties clearly understood Regulation 45-B is in vogue and in fact it legally prevailed and rightly followed. 40. It was also submitted that Regulation 6(4) of Regulations of 2005 provides that ARR shall contain power purchase cost for each year of the controlled period. It is clear from ARR as defined in Regulations of 2005 and FSA that they do not run counter to each other but are supplementary. The Regulations of 2005 do not deal with determination of fuel surcharge. Regulation 45-B cannot be said to be invalid for the aforesaid reason. 41. There is a saving clause contained in Regulation 24 of Regulations of 2005. Regulation 12.4 provides that the distribution licens....