Case Note & Summary
The dispute arose from the Maharashtra State Electricity Distribution Company Limited's appeal against the Appellate Tribunal for Electricity's order that exempted captive consumers from paying an additional surcharge under Section 42(4) of the Electricity Act, 2003. The State Commission had previously ruled that captive consumers were liable for this surcharge, prompting the respondents, who are captive consumers, to appeal. The Supreme Court was tasked with determining the liability of these consumers regarding the additional surcharge. The court analyzed the relevant provisions of the Electricity Act, particularly Sections 9 and 42, concluding that captive consumers have a statutory right to generate and use electricity without needing permission from the State Commission. The court noted that the additional surcharge is only applicable when the State Commission permits consumers to receive electricity from sources other than their distribution licensee, which does not apply to captive users. The court further distinguished between ordinary consumers and captive consumers, stating that imposing the surcharge on captive consumers would be discriminatory. Ultimately, the court dismissed the appeals, ruling that captive consumers are not liable for the additional surcharge and ordered that any surcharge already collected should be adjusted in future bills rather than refunded in a lump sum. The decision was made on December 10, 2021.
Headnote
A) Electricity Law - Additional Surcharge - Liability of Captive Consumers - Electricity Act, 2003, Section 42(4) - Court held that captive consumers are not liable to pay additional surcharge as they have a statutory right to generate and use electricity without requiring permission from the State Commission. The court emphasized that the additional surcharge applies only when the State Commission permits consumers to receive supply from other sources, which is not the case for captive users (Paras 10-14).
Issue of Consideration
Whether the captive consumers/captive users are liable to pay the additional surcharge leviable under Section 42(4) of the Electricity Act, 2003?
Final Decision
The Supreme Court dismissed the appeals, ruling that captive consumers are not liable to pay the additional surcharge under Section 42(4) of the Electricity Act, 2003. The court directed that any surcharge already collected should be adjusted in future bills.
Law Points
- Electricity Act
- 2003
- Section 9
- Section 42
- additional surcharge
- captive consumers
- open access
