Telangana High Court

M/S. Highlight Electrical ... vs The Telangana State Southern ... on 7 December, 2022

Bench: K. Sarath

                                                  Page 1 of 17
                                          WP No.25315 of 2022
                                                         SK,J




   THE HONOURABLE SRI JUSTICE K.SARATH

          WRIT PETITION No.25315 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/Kothakota/PAO.1888/22
   dated.16.02.2022 in respect of Kothakota
   Unit, and Letter No.ADE/OP/WNP/D.No.2076/
   2022      dt.15.02.2022       in   respect      of
   Wanaparthi Unit, issued by respondent Nos.4

and 5 changing category or private special maintenance shed (SPM) Shed from LT-III Category to LT-II category with effect from 01.04.2013 to 01.02.2022 and from 01.11.2011 to 01.02.2022 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 Kothakota Unit and Wanaparthi Units vide Service Connections

WP No.25315 of 2022 SK,J

Nos.071203618 - USC No.103864740 dated 07.03.2022; and S.C.No.010111110: USC No.103814109 dated.10.05.2022 and further to direct the 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 Kothakota and

Wanaparthi SPM Centers. For the purpose of

maintaining the distribution transformers, the

petitioner engaged in manufacturing of H.V. coils and

WP No.25315 of 2022 SK,J

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

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 notices

dated.16.02.2022 for back billing from 01.04.2013

to 01.02.2022 for an amount of Rs.4,02,856/- in

respect of Kothakota unit, another Notice dated

WP No.25315 of 2022 SK,J

15.02.2022 for the period from 01.11.2011 to

01.02.2022 for an amount of Rs.4,77,078/- in

respect of Wanaparthi, changing his service

connections 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

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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.

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

WP No.25315 of 2022 SK,J

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.

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

2016 (2) ALT 349

WP No.25315 of 2022 SK,J

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,

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



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

                                             WP No.25315 of 2022
                                                            SK,J




                  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

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

WP No.25315 of 2022 SK,J

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

manufacturing H.V. and L.V. coils are false and

baseless, for the reason that there is no machinery in

WP No.25315 of 2022 SK,J

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.

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

WP No.25315 of 2022 SK,J

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

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

01.04.2013 to 01.02.2022 (for Kothakota Unit) and

from 01.11.2011 to 01.02.2022 (for Wanaparthi

WP No.25315 of 2022 SK,J

Unit) basing on the inspection conducted on

01.02.2022. 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 notices 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 any objection within a period of 15 days. The

WP No.25315 of 2022 SK,J

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