Himachal Pradesh High Court Grants Interim Relief to Industries on Electricity Duty
The Himachal Pradesh High Court has issued a significant interim order, restraining the state government from collecting electricity duty beyond 16.5% from medium and large industrial consumers. This decision offers immediate relief to industries across the state, which have been grappling with steep increases in electricity charges.
Legal Challenge Against Electricity Duty Hikes
A division bench comprising Justice Vivek Singh Thakur and Justice Ranjan Sharma passed the order while hearing a petition filed by M/s Verma Stone Crusher, located in Gajari village in Theog tehsil of Shimla district. The bench also issued a notice to the power department and the state electricity board, scheduling the next hearing for April 23.
The petitioner has challenged various notifications issued by the state government that enhanced electricity duty rates over time. According to the plea, the duty for medium and large industrial consumers was initially fixed at 11% effective from July 20, 2017. However, it was later increased to 25% through a notification dated September 1, 2023, and further raised to 37.5% via a notification dated January 18, 2024.
Violation of Statutory Limits Alleged
The counsel for the petitioner argued that these sharp hikes violate sub-section (2) of Section 11 of the Himachal Pradesh Electricity (Duty) Act, 2009. This provision allows the state government to revise electricity duty rates through notifications but restricts any increase to not more than 50% of the rate previously specified under Section 3 of the Act at one time.
The court observed that the jump from 11% to 25% and subsequently to 37.5% prima facie appeared contrary to this statutory limit. Consequently, the court directed that electricity duty beyond 16.5% should not be collected by the power department and the state electricity board from medium and large industries.
State Government's Response and Legal Proceedings
Additional Advocate General Sushant Keprate, accepting notice on behalf of the state government, informed the court that the legal issue involved is similar to another batch of matters already scheduled for hearing on April 23. He stated that no separate reply is required to be filed, and the present petition could be decided based on material already submitted in the connected cases.
This interim order provides a temporary respite for industrial consumers in Himachal Pradesh, pending further legal scrutiny. The case highlights ongoing tensions between state revenue policies and statutory protections for businesses, with potential implications for industrial growth and economic stability in the region.
