Telangana High Court

M/S. M. Chakradhar Reddy vs The Telangana State Southern ... on 7 December, 2022

Bench: K. Sarath

                                                             Page 1 of 16
                                                     WP No.26239 of 2022
                                                                    SK,J




   THE HONOURABLE SRI JUSTICE K.SARATH

          WRIT PETITION No.26239 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/RAMAYAMPET
   /D.NO.1346/2017             Dated              07.11.2017
   issued by      the respondent No.5, changing

category or private special maintenance shed (SPM) Shed from LT-III Category to LT-II category with effect from 01.08.2012 to 01.11.2017, 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 Ramayampet Unit of the petitioner vide SC No.1311802785 USC No.1037159988 dated 09.05.2022 and further to direct the respondents to continue categorization of the petitioner private shed in LT-III itself"

WP No.26239 of 2022 SK,J

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-Shed (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 Ramayampet SPM

Centre. 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 shop. The petitioner undertakes

the works purely Government rate for maintenance of

transformers erected by the Respondent's Corporation.

During the maintenance activity the petitioner need to

WP No.26239 of 2022 SK,J

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.07.11.2022 for

back billing from 01.08.2012 to 01.11.2017 for an

amount of Rs.2,54,297/- converting his service

connection 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

WP No.26239 of 2022 SK,J

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

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.

WP No.26239 of 2022 SK,J

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

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.

WP No.26239 of 2022 SK,J

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

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,

2016 (2) ALT 349

Air 2005 Guj.164 (Guj)1-GLR 519

WP No.26239 of 2022 SK,J

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

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

WP No.26239 of 2022 SK,J

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

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

WP No.26239 of 2022 SK,J

i.e. Commercial Category as per the tariff order issued

by the Telangana State Electricity Regulatory

Commission (TSREC). The contention of

manufacturing HV and LV 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 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

WP No.26239 of 2022 SK,J

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 shop.

The petitioner is doing only maintenance of

transformers erected by the respondent-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

WP No.26239 of 2022 SK,J

petitioner straight away reclassified the category and

retrospectively assessed the charges and issued

impugned assessment notice for back-billing from

01.08.2012 to 01.11.2017 basing on the inspection

conducted on 01.11.2017. The respondents not

issued any notice 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 notice of

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

WP No.26239 of 2022 SK,J

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 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

WP No.26239 of 2022 SK,J

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,

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.

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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

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,

WP No.26239 of 2022 SK,J

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

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

WP No.26239 of 2022 SK,J