Case Note & Summary
The Supreme Court of India heard four statutory appeals filed by Gujarat Urja Vikas Nigam Limited (GUVNL), a distribution licensee, against the common judgment of the Appellate Tribunal for Electricity (APTEL) dated 28.09.2015. The APTEL had confirmed orders passed by the Gujarat Electricity Regulatory Commission (GERC) in favor of four wind energy generating companies, namely Green Infra Corporate Wind Private Limited, Vaayu (India) Power Corporation Private Limited, Green Infra Wind Power Limited, and Tadas Wind Energy Private Limited. The dispute arose from the GERC's Order No. 1 of 2010 dated 30.01.2010, which determined the tariff for procurement of power by distribution licensees from wind energy projects for a control period of three years effective from 11.08.2009. In that order, the GERC decided to determine tariff taking into account the benefit of accelerated depreciation available under the Income-tax Act, 1961 and the Income-tax Rules, 1962. It explicitly stated that wind energy projects which did not avail such benefit could submit petitions on a case-to-case basis for separate tariff determination. The four respondent companies, which had not availed accelerated depreciation, filed petitions before the GERC seeking tariff determination. The GERC allowed their petitions by orders dated 11.06.2014, 13.06.2014, and 20.09.2014, holding that they were entitled to approach the Commission. The APTEL confirmed these orders, leading to the present appeals by GUVNL. The Supreme Court, by order dated 05.05.2016, requested the GERC to defer its proceedings until the matter was finally decided. Later, by order dated 03.02.2023, the Court permitted the GERC to proceed with tariff determination hearings subject to the condition that no final order be passed without leave of the Court. The Court noted that hearings before the GERC had concluded but final orders had not been pronounced due to the interim order. The core legal issue before the Court was whether the respondent companies were entitled to approach the GERC for determination of tariff for procurement of power by GUVNL from their wind energy projects. The Court examined the statutory framework under the Electricity Act, 2003, particularly Sections 61, 62, 64, and 86, which empower the Appropriate Commission to determine tariff and regulate electricity procurement. It also examined Section 32 of the Income-tax Act, 1961 and Rule 5 of the Income-tax Rules, 1962, along with Appendix I, which provide for accelerated depreciation at 80% for renewable energy devices such as wind mills, subject to exercise of option before the due date for furnishing return of income. The Court referred to its earlier decision in Gujarat Urja Vikas Nigam Limited v. EMCO Limited and Another, (2016) 11 SCC 182, which dealt with a similar issue in the context of solar energy projects, but the extract provided does not include the Court's final reasoning or operative order. The lower fora had held that the respondent companies were entitled to tariff determination by the GERC on a case-to-case basis because they did not avail accelerated depreciation. The provided text does not disclose the Supreme Court's final decision; it ends mid-analysis while discussing the EMCO case.
Headnote
A) Electricity Law - Tariff Determination - Appropriate Commission empowered to specify terms and conditions and determine tariff - Electricity Act, 2003, Sections 61, 62, 64, 86 - The State Commission must be guided by factors including safeguarding consumer interest and promotion of renewable energy; generating companies may apply for tariff determination and tariff orders continue in force for specified period unless amended or revoked - Held that the statutory scheme enables generating companies to seek tariff determination from the Commission (Paras 8). B) Tax Law - Depreciation - Accelerated depreciation for renewable energy devices - Income-tax Act, 1961, Section 32; Income-tax Rules, 1962, Rule 5 and Appendix I - Wind energy projects are renewable energy devices eligible for 80% accelerated depreciation if option exercised before due date for return of income for relevant assessment year - Held that availing accelerated depreciation is optional and affects tariff determination (Paras 6-7). C) Electricity Law - Wind Energy Tariff - Differentiated tariff for projects availing vs not availing accelerated depreciation - GERC Order No. 1 of 2010; Electricity Act, 2003, Sections 61, 62, 86 - The Commission determined tariff considering accelerated depreciation benefit and directed that projects not availing such benefit may submit petitions on case-to-case basis - Held by GERC and APTEL that respondent wind energy companies were entitled to approach GERC for separate tariff determination (Paras 3-5). D) Appeal and Procedure - Review of Regulatory Orders - APTEL confirmation and Supreme Court interim directions - Electricity Act, 2003 - The APTEL confirmed GERC orders; Supreme Court directed deferral of GERC tariff hearings pending final decision and later permitted hearings without final order - Held that the matter awaited final adjudication (Paras 1-2).
Issue of Consideration
Whether the four respondent wind energy companies were entitled to approach the Gujarat Electricity Regulatory Commission for determination of tariff for procurement of power by GUVNL from their wind energy projects, in view of the GERC's 2010 tariff order and their non-availment of accelerated depreciation under the Income-tax Act, 1961.
Law Points
- Appropriate Commission has power to determine tariff under Electricity Act
- 2003
- Wind energy projects not availing accelerated depreciation may seek case-to-case tariff determination
- Accelerated depreciation under Income-tax Act is optional and influences tariff
- Tariff orders continue for specified period unless amended or revoked
