Court limits electricity duty to 16.5% for medium and large industries, citing statutory violation
In a significant ruling, the Himachal Pradesh High Court has restrained the State Government from collecting electricity duty beyond 16.5% for medium and large industrial consumers. The decision came after M/s. Verma Stone Crusher challenged the revised electricity duty rates, alleging they were in violation of the Himachal Pradesh Electricity (Duty) Act, 2009.
The bench, comprising Justices Vivek Singh Thakur and Ranjan Sharma, delivered the judgment on February 26, 2026, in response to CWP No. 2102 of 2026. The petitioner argued that the State Government's notification, which increased electricity duty from 11% to 25%, and subsequently to 37.50%, exceeded the limits set under Section 11(2) of the 2009 Act. This section permits the State to revise duty rates without exceeding 50% of the previously specified rates.
The court found the increase from 11% to 25%, and further to 37.50%, prima facie contrary to the statutory provision, thus ordering the State to refrain from collecting duty beyond 16.5%. The respondents, including the State of Himachal Pradesh and the Himachal Pradesh State Electricity Board Limited (HPSEBL), were represented by Additional Advocate General Mr. Sushant Keprate and Senior Advocate Ms. Sunita Sharma, respectively.
The court's ruling is expected to bring relief to medium and large industries in Himachal Pradesh, who were burdened by the higher electricity duty. The case will continue to be heard alongside a similar petition, CWP No. 15413 of 2024, as the issue remains a point of legal contention.
Bottom Line:
Electricity Duty - Revision of rates of electricity duty through notification by the State Government must comply with the limits set under Section 11(2) of the Himachal Pradesh Electricity (Duty) Act, 2009 - Increase from 11% to 25% and subsequently to 37.50% prima facie appears contrary to statutory limits - Respondents restrained from collecting electricity duty beyond 16.5% for medium and large industries.
Statutory provision(s): Himachal Pradesh Electricity (Duty) Act, 2009, Section 11(2)
