Telangana High Court

M/S. Krishna Electrical Works vs The State Of Telangana,Fewer ... on 7 December, 2022

Bench: K. Sarath

                                                   Page 1 of 16
                                           WP No.25440 of 2022
                                                          SK,J




   THE HONOURABLE SRI JUSTICE K.SARATH

          WRIT PETITION No.25440 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/KOSGI/F.NO.
   MATS/D.NO.1815 Dt.04.03.2022 issued by
   the respondent No.4, changing category or

private special maintenance shed (SPM) Shed from LT-III Category to LT-II category with effect from 28.01.2019 to 14.02.2022, 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 Kosgi Unit of the petitioner vide Service SC No.0161305781; USC NO..111929547, DATED.11.04.2022 and further direct the respondents to continue categorization of the petitioner private shed in LT-III itself"

WP No.25440 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 Kosgi 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 change

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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.04.03.2022 for back billing

from 28.01.2019 to 14.02.2022 for an amount of

Rs.2,45,776/- 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

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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

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.25440 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.25440 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

the petitioner for the Unit of Narsapur, and the activity

of the said unit is mentioned as "Manufacturing Unit"

and the same is attested by the Divisional Engineer,

2016 (2) ALT 349

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

WP No.25440 of 2022 SK,J

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. 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.

WP No.25440 of 2022 SK,J

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

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

by the Telangana State Electricity Regulatory

Commission (TSREC). The contention of

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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

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.

WP No.25440 of 2022 SK,J

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

petitioner straight away reclassified the category and

retrospectively assessed the charges and issued

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impugned assessment notice for back-billing from

28.01.2019 to 14.02.2022 basing on the inspection

conducted on 14.02.2022. 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 Designated Officer of the Company), the consumer will be informed through a notice, of the proposed reclassification, duly giving him an opportunity to file

WP No.25440 of 2022 SK,J

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

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

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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.

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

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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, 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

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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

calculating the charges retrospectively and the same is