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Informist, Wednesday, Mar. 25, 2026

 

--SC OKs Maharashtra's withdrawal of electricity duty relief to RIL, others

 

NEW DELHI – The Supreme Court Wednesday upheld the Maharashtra government's notifications to withdraw the exemption on payment of electricity duty on the power generated by captive power plants and charge 15 paise per unit from companies such as Reliance Industries Ltd., Lupin Ltd., and Jindal Poly Films Ltd. for the period from 2000 to 2005. 

 

The apex court said that the state government had the power to withdraw exemptions given to companies on electricity duty. However, the notifications by the government in 2000 and 2001 for withdrawal of electricity duty exemption and charging 15 paise per unit, respectively, would operate only after expiry of one year from their respective dates, the court said. 

 

In 1993, the state government came up with a notification to not charge electricity duty on the power generated by captive power plants and its utilisation. However, the exemption was removed and the companies were asked to pay 15 paise per unit on the power generated. 

 

The state government said the notifications do not state that the exemption will continue permanently and indeed, no specific period for exemption has been set out. There is no statutory or fundamental right to claim exemption, the state government said. The exemption was already enjoyed for about five years and it was not a case of premature withdrawal, it said.

 

The companies argued that they had set up their captive power plants at huge investments and therefore, the state government ought not to be permitted to go back on its earlier exemption, and it must be bound by the promises made. The minimum life of a captive power plant is 15 years and the cost of their plants had been worked out on the basis that the exemption for payment of electricity duty would be available for at least 15 years, the companies said. 

 

The Bombay High Court, in 2009, ruled that when the state government wanted to deny exemption for the period from 2000 to 2005, it was imperative from it to set outSC OKs Maharashtra's withdrawal of electricity duty relief to RIL, others the reasons for the same. Giving no reasons clearly indicates lack of application of mind on the part of the state government to deny the benefit of exemption, the high court said. Challenging this order, the Maharashtra government moved the top court.

 

At 1127 IST, shares of Reliance Industries Ltd. were up 1.1% at INR 1,427.30 on the National Stock Exchange, shares of Lupin Ltd. were up 0.6% at INR 2,347.10, and shares of Jindal Poly Films Ltd. were down 5.0% at INR 820.80.  End  

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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