Jharkhand High Court Upholds Modified Electricity Assessment, Bars Retrospective Application of Tariff Formula
W.P. (C) No. 2594 of 2009.
By Rishika Sinha
The Jharkhand High Court dismissed a writ petition challenging the modification of an assessment under Sections 126 and 127 of the Electricity Act, 2003, holding that in the absence of a statutory or regulatory formula in force at the relevant time, the assessment must be confined to the prevailing tariff framework and cannot be determined by retrospectively applying subsequently notified regulations.
The dispute arose from an inspection conducted in 2008, pursuant to which the petitioner/Electricity Board assessed liability on allegations of electricity pilferage. While the assessing authority computed the liability by applying a particular formula, the appellate authority under Section 127 modified the assessment by adopting a different method that is doubling the units consumed and applying the then prevailing tariff rate on the premise that no binding formula had been notified at the relevant time.
The principal contention of the petitioner was that, in terms of Section 126(5) and (6) of the Act, the assessment ought to have been calculated at twice the tariff rate, whereas the appellate authority erred in altering the methodology. This was opposed by the consumer on the ground that the State Electricity Regulatory Commission had not framed any operative supply code or formula governing such assessment at the relevant point of time.
The Court, after examining Sections 50 and 181 of the Electricity Act, 2003, held that the prescription of methodology for billing and assessment, including cases of unauthorised use or theft, lies within the exclusive regulatory domain of the State Commission, and such methodology must emanate from duly notified regulations. The Court further noted that although a supply code incorporating a formula was subsequently notified in 2010, the same could not be applied retrospectively to an incident of 2008.
Placing reliance on Jharkhand State Electricity Board and Others v. Laxmi Business and Cement Company Pvt. Ltd., (2014) 5 SCC 236, the Court reaffirmed that tariff-related determinations must be strictly in accordance with the regulatory framework approved by the competent commission, and not through administrative innovation. In this backdrop, the Court found no infirmity in the approach of the appellate authority, which had proceeded on the basis of the existing tariff in the absence of a prescribed formula. Accordingly, the writ petition was dismissed.
