[Cites 6, Cited by 0]
Chattisgarh High Court
State Of Chhattisgarh vs M/S. Acb India Ltd on 12 March, 2026
Author: Ramesh Sinha
Bench: Ramesh Sinha
1
2026:CGHC:11782-DB
NAFR
BABLU
RAJENDRA
BHANARKAR HIGH COURT OF CHHATTISGARH AT BILASPUR
Digitally signed by
BABLU RAJENDRA
BHANARKAR
Date: 2026.03.13
10:11:51 +0530
WA No. 213 of 2026
1 - State Of Chhattisgarh Through- The Secretary, Department Of
Energy, Mahanadi Bhawan, Mantralaya, Nava Raipur, Atal Nagar,
Raipur, District Raipur, Chhattisgarh
2 - Special Secretary Department Of Energy, Mahanadi Bhawan,
Mantralaya, Nava Raipur, Atal Nagar, Raipur, District Raipur,
Chhattisgarh.
3 - Chief Electrical Inspector Government Of Chhattisgarh, B-Block,
Second Floor, Indravati Bhawan, Nava Raipur, Atal Nagar, Raipur,
District Raipur, Chhattisgarh.
... Appellants
versus
M/s. ACB India Ltd. A Company Incorporated Under Provisions Of The
Companies Act Having Registered Office At C-102, L.G.F. Surya
Enclave, Multan Nagar, New Delhi 110056 Having Plant At Village
Kasaipali, Post Jawali, District Korba, Chhattisgarh, Represented
Through Its Authorised Representative, Sh. Arbind Kumar Singh.
... Respondent
For Appellants : Mr.P.K.Bhaduri, Deputy Advocate General
For Respondent : Mr.Ravindra Shrivastava, Senior Advocate
through video conferencing assisted by
Mr.Abhishek Vinod Deshmukh, Advocate
Hon'ble Shri Ramesh Sinha, Chief Justice
Hon'ble Shri Ravindra Kumar Agrawal, Judge
Judgment on Board
Per Ramesh Sinha, Chief Justice
12.03.2026
1. Heard Mr.P.K.Bhaduri, learned Deputy Advocate General for the
appellants/State as well as Mr.Ravindra Shrivastava, learned
Senior Advocate appearing through video conferencing assisted
by Mr.Abhishek Vinod Deshmukh, learned counsel appearing for
the respondent on IA No.01/2026, which is an application for
condonation of delay of 24 days in filing the present writ appeal.
2. On due consideration, IA No.01/2026 is allowed. Delay of 24 days
in filing the writ appeal is hereby condoned.
3. With the consent of learned counsel for the parties, the matter is
heard finally.
4. The appellants/State have filed this writ appeal against the order
dated 09.12.2025 passed by the learned Single Judge in WPC
No.3685/2023, whereby the writ petitions preferred by the
respondent / writ petitioner have been allowed by setting aside the
demand dated 22.05.2023 raised by the appellants/State towards
electricity duty.
5. Brief facts necessary for disposal of the case are that the
respondent Company had set up a captive power plant of 270 MW
in village Ksaipali which comprises of two units, each of 135 MW.
On 5.12.2013 the respondent Company entered into a power
purchase agreement with Chhattisgarh State Power Trading Co.
Ltd. to meet its power requirement. Appellant No.2 exercising the
powers vested in Section 3B and Section 3-C of the Chhattisgarh
Electricity Duty Act, 1949 (for short 'the Act of 1949') issued a
Notification dated 12.8.2016 granting concession in payment of
electricity duty to certain producers including captive power
generation plants. Consequently, the respondent Company has
also been granted exemption/concession in payment of electricity
duty and since then the respondent has been paying electricity
duty on concessional rates. As per notification dated 12.8.2016,
rate of electricity duty applicable on consumption would be 15% of
tariff till 31.3.2016 and thereafter 10% of average cost of supply
and such exemption to the respondent Company was to start from
1st April 2016 or date of commercial production, whichever is later,
till 12 years and thereafter rate of average cost of supply for time
being in force. Appellant No.3 issued notice of demand to the
respondent demanding arrears of electricity duty mentioned
therein for the period from January 2017 to March 2023. The
Respondent Company submitted letter dated 17.8.2021 requesting
appellant No.3 to recalculate electricity duty and interest amount,
but the same failed to evoke any response till date. The State
Government vide Notification dated 11.10.2022 revised the
electricity duty by making certain changes in slabs. In respect of
category of consumers in which the respondent falls, electricity
duty is increased to 21% of average cost of supply till 30.9.2022
and thereafter 14% of rate of average cost of supply in the tariff
order from 1.10.2022 till 12 years. The respondent Company
addressed a letter to appellant No.3 seeking clarification regarding
applicability of aforementioned Notification to the consumers who
had already granted concession as per Notification dated
12.8.2013 for a period of 12 years etc. Instead of clarifying position
in this regard, appellant No.3 issued demand notice in terms of
Notification dated 11.10.2022 directing the respondent Company
to deposit difference amount of electricity duty for the period from
April, 2017 to March 2023 on the basis of tariff revised vide
Notification dated 11.10.2022, as also interest amount payable
thereon.
6. Being aggrieved by the same, the respondent Company filed writ
petitions, which were allowed by learned Single Judge by the
impugned order. Hence, this writ appeal.
7. Learned Deputy Advocate General for the appellants/State
submits that learned Single Judge has failed to appreciate the
scope and ambit of Section 3-B of the Chhattisgarh Electricity Duty
Act, 1949 (hereinafter called as "the Act of 1949"). In exercise of
powers under Section 3-B of the Act, the State Government had
issued a notification dated 12.08.2016, whereby exemption from
payment of electricity duty was granted in public interest. Section
3-B(a) clearly provides that if the State Government is of the
opinion that it is necessary or expedient in the public interest, it
may, by notification, exempt any person or class of persons from
payment of electricity duty. It is submitted that the very same
provision also empowers the State Government to cancel or
withdraw such exemption. In terms of Section 3-B(b), if the State
Government subsequently forms an opinion that such exemption is
no longer required in public interest, the Government is competent
to cancel or supersede the earlier notification by issuing a like
notification. Further, Section 3-C of the Act of 1949, read with the
amendment introduced in the year 2013, empowers the State
Government to amend the Schedule appended to Section 3 of the
Act whenever it considers it necessary or expedient in public
interest. In exercise of the aforesaid statutory powers, the State
Government issued a subsequent notification dated 11.10.2022,
which superseded the earlier notification dated 12.08.2016. While
issuing the said notification, the State Government formed a
considered opinion that continuation of the earlier exemption was
resulting in substantial loss of revenue to the State, amounting to
approximately Rs. 667 Crores. It was further assessed that the
amendment in the Schedule would significantly increase the
revenue collection of the State from about Rs. 500 Crores to
approximately Rs. 1009 Crores in future. Thus, the decision was
taken strictly in larger public interest and fiscal considerations. It is
well settled that policy decisions of the Government taken in public
interest, particularly in matters relating to economic or fiscal policy,
are entitled to considerable judicial deference. In this regard,
reliance is placed upon the judgment of the Hon'ble Supreme
Court in Yamuna Expressway Industrial Development Authority
Etc. v. Shakuntla Education and Welfare Society & Others,
2022 LiveLaw (SC) 536 wherein the Hon'ble Court, while referring
to APM Terminals B.V. v. Union of India and another, (2011) 6
SCC 756 has held that a change in Government policy can
override private arrangements if such change is made in the larger
public interest and is guided by reason. The Hon'ble Supreme
Court has clearly observed that in case of conflict between public
interest and private interest, public interest must prevail.
8. He further submits that learned Single Judge has also failed to
consider the settled principle laid down by the Hon'ble Supreme
Court in Subhash Photographics v. Union of India, 1993 Supp
3 SCC 323 wherein it has been held that economic and fiscal
legislation must necessarily retain flexibility, and the Government
must be allowed sufficient discretion to adjust policies according to
changing economic circumstances. The Electricity Duty Act, 1949
is essentially a fiscal statute, forming part of the economic policy of
the State. Therefore, the power to grant exemptions as well as to
withdraw or modify such exemptions cannot be interpreted in a
narrow or restrictive manner. He also submits that learned Single
Judge has also not taken into consideration Section 21 of the
General Clauses Act, 1897, which clearly provides that the power
to issue a notification includes the power to add to, amend, vary, or
rescind the same. Therefore, once the State Government had the
power to issue the notification granting exemption, it necessarily
follows that the State Government also possesses the power to
withdraw or modify the same by issuing a subsequent notification.
In view of the aforesaid statutory provisions and settled legal
principles, it is respectfully submitted that the State Government
was fully competent to issue the notification dated 11.10.2022,
superseding the earlier notification. He contended that the
impugned judgment passed by the learned Single Judge,
therefore, fails to consider the statutory scheme, the scope of
governmental policy in fiscal matters, and the binding precedents
of the Hon'ble Supreme Court, and hence deserves to be set
aside.
9. Per contra, learned Senior Advocate appearing for the respondent
opposes the submissions made by learned Deputy Advocate
General for the appellants/State and submits that the learned
Single Judge after considering all the aspects of the matter has
rightly allowed the writ petitions filed by the writ petitioner/
respondent herein, in which no interference is called for.
10.We have learned counsel for the parties and perused the
impugned order and other documents appended with writ appeal.
11.From perusal of the impugned order, it transpires that learned
Single Judge has observed that power to amendment the schedule
and power to grant exemption / relaxation from payment of duty in
whole or part, are two different powers under Statute. Here in this
case grievance raised by the writ petitioner is with regard to
computation of arrears of duty to be paid by the writ petitioner
based on the amended rates as mentioned in the schedule came
to be amended vide Chhattisgarh Electricity Duty (Amendment) Act
2022, on the ground that relaxation/exemption granted by the State
Government by Notification, Annexure P-3, is still in force and that
has not been withdrawn/cancelled and therefore, writ petitioner is
entitled to exemption as granted by the State Government vide
Notification, Annexure P-3, which was for 12 years and will come
to an end in August 2028. Learned Single Judge further observed
that Section 3B (b) of the Act of 1949 further grants power to the
State Government to cancel any such notification and again
subject, by a like notification, the distributor of electrical energy or
producer or class of such producers to the payment of such duty in
respect of such sale, supply or consumption of electrical energy.
The State submitted reply to writ petition mentioning that Section
3B of the Act of 1949 gives power to the State Government to
notify exemptions and if there is a public interest which requires
cancellation of such notification and supercession by a like
notification. It is also submitted that the State Government can
withdraw such notification exercising powers under Section 3B(b)
of the Act of 1949. True it is that under the Act of 1949 the power is
vested in the State Government to grant exemption from payment
of electricity duty in whole or in part and also to cancel any such
notification and again subject, by a like notification, the distributor
or producer of electrical energy to payment of such duty. However,
along with reply, the State has not placed on record anything to
show that exemption granted to writ petitioner and other like
producers/distributors of electrical energy has been
cancelled/withdrawn by notification issued by the Competent
Authority. Learned Single Judge also observed that powers to the
authority under the Act of 1949 is not questionable in view of
specific provision under Section 3B(iii) (b) of the Act of 1979.
Consideration before this Court is whether the authority has
exercised that power, in the manner as provided under the Act of
1949. Provisions under Section 3 (B) (iii)(b) of the Act of 1949 in
clear terms provides 'cancel any such notification'. If grant of
exemption is by notification, then the cancellation of earlier
notification should also be by issuing notification clearly mentioning
that earlier notification is withdrawn/cancelled. Intention of the
authority of withdrawing/cancelling notification should be clearly
worded. In the case at hand, before this Court no document is
placed to show that the authority under Section 3(B) of the Act of
1949 has issued any notification withdrawing/cancelling earlier
notification dated 12.08.2016 (Annexure P-3), as such the
Notification, Annexure P-3, is still in force and allowed the writ
petitions filed by the writ petitioner / respondent herein and
quashed the demand raised by the State vide Annexure P-1
towards electricity duty. However, liberty is granted to the State to
recalculate the outstanding, if any, against the writ petitioner
towards electricity duty and can raise fresh demand, in the light of
discussion and observation as made above.
12.Considering the submissions advanced by the learned counsel for
the parties, perusing the documents appended with writ petition as
also with writ appeal and also considering the finding recorded by
the learned Single Judge while allowing the writ petitions filed by
the writ petitioner / respondent herein, we are of the considered
opinion that the learned Single Judge has not committed any
illegality, irregularity or jurisdictional error in the impugned order
warranting interference by this Court.
13.Accordingly, the writ appeal deserves to be and is hereby
dismissed. No cost(s).
Sd/- Sd/-
(Ravindra Kumar Agrawal) (Ramesh Sinha)
Judge Chief Justice
Bablu
