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WP No.26727 of 2022
SK,J
THE HONOURABLE SRI JUSTICE K.SARATH
WRIT PETITION No.26727 of 2022
ORDER:-
This writ petition is filed for the following relief:
"....to issue writ order or direction more
particularly one in the nature of Writ of Mandamus
declaring the Assessment Notice vide Letter
No.ADE/OP/KLP/Theft/D.No.1831 dated
09.02.2022 in respect of Kollapur Unit, and Letter
No.ADE/OP/achampet D.No.1973 dt.10.02.2022
in respect of Achampet Unit, issued by respondent
Nos.4 and 5, changing the category or private special maintenance shed (SPM) Shed from LT-III Category to LT-II category with effect from 01.01.2014 to 03.02.2022 and from 07.02.2014 to 08.02.2022 respectively, as illegal, arbitrary and violative of principles of natural justice and violative of Article-14 of Constitution of India and consequently set aside the same and also the arrears claimed in the bill pertaining to Kollapur and Makthal Units vide Service Connections Nos.551003616: USC No.104267873 dated 11.06.2022; and S.C.No.210104288: USC No.104238023 dt.04.06.2022 and further to direct the Page 2 of 17 WP No.26727 of 2022 SK,J respondents to continue categorization of the petitioner private shed in LT-III itself"
2. Heard Sri Chekuri Yadagiri, learned Counsel appearing for the petitioner, and Sri R.Vinod Reddy, learned Standing Counsel appearing for respondents,
3. The learned Counsel for the petitioner submits that the petitioner-unit is running SPM-Sheds (Special Maintenance Shed) of the respondents, carrying out the repairs to the failed 1-Phase and 3-Phase Distributions of Transformers (Conventional & CSP types) of all capacities available at Kollapur and Achampet SPM Centers. For the purpose of maintaining the distribution transformers, the petitioner engaged in manufacturing of H.V. coils and L.V. coils as per the standards and take up process of assembling of transformers at work shops. The petitioner undertakes the works purely Government Page 3 of 17 WP No.26727 of 2022 SK,J rate for maintenance of transformers erected by the Respondents-Corporation. During the maintenance activity the petitioner need to change coils as per the requirements and same involves in manufacturing H.V. Coils and L.V. Coils with suitable gauge of wire and provide insulation material and using winding wire. The petitioner has obtained power supply under LT-III category i.e. Industrial category and doing the same work since long time and same is considered as Industry and the petitioner is not due any amount till he received impugned assessment notice dated 09.02.2022 in respect of Kollapur Unit for back billing from 01.01.2014 to 03.02.2022 for an amount of Rs.2,82,423/-; and another notice dated.10.02.2022 for back billing from 07.02.2014 to 08.02.2022 for an amount of Rs.2,93,780/- in respect of Achampet Units respectively, changing his service connections Page 4 of 17 WP No.26727 of 2022 SK,J from LT-III category to LT-II category i.e. Commercial Category. The same was issued on the ground that the petitioner obtained service connection under wrong category and observed that the petitioner is utilizing the supply for transformer repairing center, and the same is not coming under Industry Category and it comes under Commercial Category i.e. LT-II Category.
4. The learned Counsel for the petitioner further submitted that the respondents without issuing any notice to the petitioner, changed the category from LT-III category to LT-II category retrospectively and the same is without any justification and the said action arbitrary, illegal and violation of Electricity Act and also against the principles of natural justice.
5. The learned Counsel for the petitioner submitted that after issuing the impugned notice, the petitioner Page 5 of 17 WP No.26727 of 2022 SK,J through their Association viz., Telangana Transformers Repairing Contractors Association, has submitted their objections and requested the respondents to waive the back billing and restore the Category-III, but as on today the respondents have not taken any decision. The respondents have no power to issue impugned assessment notice and without issuing any notice for change of category from LT-III to LT-II. The petitioner is carrying its activity in the premises of the respondents. The respondents high handedly, without taking into account of the industry's factual position, issued the impugned notice. As per Clause-3.4.1 of GTCS (General Terms and Conditions of Supply), the respondents have to issue notice to the consumer for proposed reclassification and receive objections within fifteen days from the date of receipt of notice. In the instant case, the respondents, without following the Page 6 of 17 WP No.26727 of 2022 SK,J same, straight away issued the impugned assessment notice by changing the category of service connection of the petitioner from L.T III category to L.T.II category, unilaterally and the said action of the respondents is arbitrary, illegal and liable to be set aside.
6. The learned Counsel for the petitioner in support of his contention, relied upon the judgment of this Court in Hindustan Petroleum Corporation Ltd., Vs. Andhra Pradesh Southern Power Distribution Company Ltd.,1 and another judgment of Gujarath High Court in Hindustan Petroleum Corporation Ltd., Vs. Gujarath Electricity Board,2
7. The learned Counsel for the petitioner at the time of arguments submitted "UDYAM Registration Certificate" issued by the Ministry of Micro, Small and 1 2016 (2) ALT 349 2 Air 2005 Guj.164 (Guj)1-GLR 519 Page 7 of 17 WP No.26727 of 2022 SK,J Medium Enterprises, Government of India in the name of "Polamani Krishna", Narayanpet, Narayanpet District and the activity of the said unit is mentioned as "Manufacturing Unit" and the same is attested by the Divisional Engineer, Electrical, Technical/TSSPDCL, Mahabubnagar. The said certificate extracted below:
S.No. NIC 2 Digit NIC 4 Digit NIC 5 Digit Activity 1 27 - 2710 - Manufacture 27102 - Manufacturing Manufacture of electric motors, Manufacture of of electrical generators, electric Power equipment transformers and Distribution electricity distribution transformers, arc-
and control welding
apparatus transformers,
fluorescent
ballasts,
transmission and
distribution
voltage regulators
8. The learned Counsel for the petitioner further submitted that the said Polamani Krishna also filed another Writ Petition along with the petitioner before this Court vide W.P.No.25440 of 2022 questioning the Page 8 of 17 WP No.26727 of 2022 SK,J similar notice. In view of the same, the unit of the petitioner has to be considered as 'Manufacturing Unit' by the Government of India and the same can be treated as Industrial Category i.e. LT-III as per TSERC Tariff Order. The learned Counsel for the petitioner prayed to set aside the impugned notice and direct the respondents to consider the unit of the petitioner as Industry under LT-III Category.
9. Sri R.Vinod Reddy, learned Standing Counsel appearing for the respondents submit that the petitioner-unit is running a firm, carrying out repairs of failed 1-Phase and 3-Phase Distribution Transformers of all capacities issued by the TSSPDCL within the area of their operation in the SPM sheds provided to the petitioner and similar persons. As per the terms and conditions of agreement, on job contract basis and claims the amount for such repairs from the Page 9 of 17 WP No.26727 of 2022 SK,J TSSPDCL. The petitioner activity is not manufacturing any goods, and it only carrying out to repair the failed electric Distribution Transformers (DTRs) which is a commercial activity and therefore petitioner's firm has to be billed under LT-II category i.e. Commercial Category as per the tariff order issued by the Telangana State Electricity Regulatory Commission (TSREC). The contention of manufacturing H.V. and L.V. coils are false and baseless, for the reason that there is no machinery in the SPM sheds for manufacturing the coils. The petitioner procures the coils, insulation papers and others parts from the market and repair the DTRs issued to them under the Job Contract basis and claim the bill amount from the TSSPDCL. The activity carried by the petitioner is commercial/non-industrial and as such it has to be billed under LT-II Category as Page 10 of 17 WP No.26727 of 2022 SK,J per the tariff applicable tariff orders issued by the TSERC on year to year basis. As per Clause-3.4.1 of GTCS the respondents have power to alter the classification and revise the bills with retrosepctive effect and carry out assessment for the entire period during which such reclassification is needed and requested to dismiss the writ petition.
10. After hearing both sides, this Court is of considered view that, admittedly the petitioner is carrying out repairs to failed 1-Phase and 3-Phase Distribution of Transformers (Conventional and CSP Types) of all capacities and the petitioner stated that for the purpose of maintaining the distribution transformers, engaged in manufacturing of H.V. coils and L.V. coils as per the standards and also taking up the process of assembling of transformer at work shops. The petitioner is doing only maintenance of Page 11 of 17 WP No.26727 of 2022 SK,J transformers erected by the respondents-corporation. The respondents given power supply to the petitioner under Category-III i.e. Industrial category and doing the same work since long time in their premises. The respondents without issuing any notice to the petitioner straight away reclassified the category and retrospectively assessed the charges and issued impugned assessment notice for back-billing from 01.01.2014 to 03.02.2022 (for Kollapur Unit) and from 07.02.2014 to 08.02.2022 (for Atchampet Unit) basing on the inspections conducted on 03.02.2202 and 08.02.2022 respectively. The respondents not issued any notices to the petitioner before changing the category from LT-III to LT-II category. In their counter also, the respondents not denied with regard to non- issuance of notice before issuing impugned notices of Page 12 of 17 WP No.26727 of 2022 SK,J back billing for change of category. The same is contrary to Clause 3.4.1 of GTCS.
The Clause 3.4.1. of GTCS, reads as follows: Reclassification of consumer Category- 3.4.1 . Where a consumer has been classified under a particular category and is billed accordingly and it is subsequently found that the classification is not correct (subject to the condition that the consumer does not alter the category/ purpose of usage of the premises without prior intimation to the Designated Officer of the Company), the consumer will be informed through a notice, of the proposed reclassification, duly giving him an opportunity to file any objection within a period of 15 days. The Company after due consideration of the consumer's reply if any, may alter the classification and suitably revise the bills if necessary even with retrospective effect, the assessment shall be made for the entire period during which such reclassification is needed, however, the period during which such reclassification is needed cannot be ascertained, such period shall be limited Page 13 of 17 WP No.26727 of 2022 SK,J to a period of twelve months immediately preceding the date of inspection"
11. As per the above said clause, the consumer will be informed through notice of the proposed tariff reclassification duly giving him opportunity of file objections, if any, within fifteen days. The respondents after due consideration of the consumer reply, if any, may alter the classification and suitably revise the bills, if necessary, even with retrospective effect, the assessment shall be made for the their period during the which such reclassification is needed cannot be ascertained, such period shall be limited to a period of twelve months immediately after preceding the date of inspection.
12. In the instant case, the above said procedure is not followed by the respondents and only basing on the inspection conducted by the Assist Engineer, Page 14 of 17 WP No.26727 of 2022 SK,J issued the present impugned notice reclassified the category of the petitioner from LT-III to LT-II/Non- Domestic/commercial category, and retrospectively charged with back billing, which clearly shows that the respondents without following the procedure issued present impugned notice.
13. The issue raised by the petitioner is that the petitioner's unit comes under Industry i.e. Category-LT-III. But in the counter the respondents have not given any clarification about LT-III Category and without any basis stating that the petitioners unit does not fall under Category-LT-III as there is no machinery for manufacturing of coils.
14. The judgments relied by the learned Counsel for the petitioner in Hindustan Petroleum Corporation Ltd., Vs. Andhra Pradesh Southern Power Distribution Company Ltd., (supra 1) and Page 15 of 17 WP No.26727 of 2022 SK,J Hindustan petroleum Corporation Ltd., Vs. Gujarath Electricity Board (supra 2) apply to the present case.
15. In Hindustan Petroleum Corporation Ltd., Vs. A.P.S.P.D.C.L (supra 1), this court concluded that:
"The question whether an activity which does not involved manufacture of goods can still be considered as in industrial activity or not, depends upon the interpretation of the extant statutory provisions/notifications. Going by the language of the tariff order, it is clear that even of no manufacturing activity is undertaken, it is enough if a consumer carries on the activity of processing and/or preserving of goods for sale"
16. In the instant case also the tariff order is issued for supply, manufacturing, process/or preserving goods. Moreover, the Government of India also issued "UDAYAM" Registration Certificate taking into the Page 16 of 17 WP No.26727 of 2022 SK,J activity of the petitioner and similar persons as "Manufacturing Unit".
17. The respondents, without issuing any notice to the petitioner for proposed reclassification of category and not giving him an opportunity to file any objection, cannot declare that the petitioner is doing commercial activity and issue notice under back billing by calculating the charges retrospectively and the same is contrary to Clause-3.4.1 of GTCS. Moreover, the Government of India issued certificate that the activity of the petitioner-unit and similarly situated as Manufacturing Unit. In view of the same the impugned notices are liable to be set aside.
18. Accordingly, the impugned notices are set aside and the Writ Petition is allowed. There shall be no order as to costs.
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WP No.26727 of 2022 SK,J
19. Miscellaneous petitions, pending if any, shall stand closed.
_____________________ JUSTICE K.SARATH Date:07/12/2022 trr