ORDER
Syed Saadatulla Hussaini, J.
1. This writ petition has been referred to the Division Bench by our learned brother P. Venkatarama Reddi, J. The reference order dated 28-2-1994 reads as follows :–
“The question raised in this writ petition is whether the rebate of 25% in power tariff announced by the Government in G.O. Ms. No. 654, Industries and Commerce Department, dated 13-7-1976 followed by the orders issued by the Electricity Board in B.P. Ms. No. 152 dated 13-2-1978 is applicable to the petitioner-industry, which had gone into commercial production on 16-9-1988. It is the stand of the Electricity Board that it had withdrawn the rebate to the category of industry which the petitioner had set up, by issuing B.P. Ms. No. 1098 dated 8-12-1987 and by virtue of the said B.P., it is contended that the benefit of the orders issued in B.P. Ms. No. 152 dated 13-2-1978 cannot be given effect to, inasmuch as the petitioner’s industry had not gone into commercial production by that date of withdrawal of the rebate. In support of its plea, the learned standing counsel for the Electricity Board relied
on the decision of the Supreme Court in A. P. State Electricity Board v. M/s. Sarada Ferro Alloys Limited, , wherein the Supreme Court negatived the contention of the consumer based upon the plea of the promissory estoppel having regard to the fact that the consumer had not gone into commercial production before the withdrawal of the rebate by the State Government and the Board. However, there is an additional problem here. It is one of the contention of the writ petitioner that the orders issued by the State Government vide G.O. Ms. No. 654 dated 13-7-1976 and G.O. Ms. No. 375 dated 23-8-1985 are in the nature of statutory directions issued to the Electricity Board in exercise of powers under S. 78A of the Electricity (Supply) Act, 1948. The next step in the argument is that the Government, having withdrawn these orders only in the year 1989 through a G.O. dated 27-7-1989, the petitioner which had gone into commercial production before that date should be entitled for 25% rebate irrespective of currency of the orders issued by the Electricity Board. It may be noticed that in the aforementioned decision of the Supreme Court, this question was not considered for the simple reason that the industry concerned in that case went into commercial production subsequent to the withdrawal of the rebate by the State Government. It was also not decided by the Supreme Court as to whether the orders issued by the State Government are in the nature of statutory directidns emanating from S. 78A of the Electricity (Supply) Act so as to bind the Electricity Board. The Supreme Court did not go into this question. The Supreme Court also declined to go into the allied question whether the plea of promissory estoppel could be invoked against the statutory orders issued by the Electricity Board under S. 49 of the Electricity (Supply) Act. The Supreme Court felt that on the facts of the case, the commencement of commercial production being subsequent to the withdrawal of the orders by the Electricity Board and the Government, there was no scope to apply the principle of promissory estoppel. In the present case, the date of going into commercial production was prior to the withdrawal of the rebate by the State Government, though it was subsequent to the
withdrawal by the Electricity Board. Under these circumstances, one facet of the argument advanced on behalf of the writ petitioner still survives for consideration.
In this context, I would like to refer to the fact that in the judgment of the Division Bench out of which the aforementioned appeal in the Supreme Court arose, it was held that the G.Os. must be deemed to have been issued by the State Government under S.78A of the Electricity (Supply) Act. The judgment of the Division Bench was, no doubt, reversed by the Supreme Court on a different point i.e., about the applicability of promissory estoppel in the light of the facts obtaining in that case. But, the fact remains that the Division Bench did hold that the orders issued by the State Government have statutory force and this view of the Division Bench, if correct, makes a lot of difference to the dimension of the case. As the matter has once received the consideration of this Court in the hands of Division Bench and the view expressed by the Division Bench was not disapproved on all the points though the judgment was set aside by the Supreme Court, I feel that in the fitness of things, this writ petition is to be decided by a Division Bench. No doubt, the judgment of the Division Bench can no longer be considered as a binding precedent in view of the fact that the judgment has been set aside by the Supreme Court. Nevertheless, I feel that it would be more proper that an issue of this nature which was already considered by the Division Bench once, is considered afresh by a Division Bench, more especially when it has repercussions on a number of other matters.”
2. The petitioner is a private limited company engaged in the manufacture of Ferro Silicon, Calcium Carbide and Ferroch-rome which are ferro products. It is a consumer of high tension (HT) electrical energy. The plea of the petitioner is that it is entitled to the benefit of 25% rebate in power tariff given to the HT consumers as per the orders of the Government issued in G.O.Ms. No. 654, Industries and Commerce Department dated 13-7-1976 which was subsequently modified by G.O. Ms. No. 38, Industries
and Commerce Department dated 20-1-1977. The said G.O. Ms. No. 654 dated 13-7-1976 is to the following effect:
“The revised power tariff notified by the A.P. State Electricity Board with effect from 20-10-1975 offers a rebate of 25% on demand and energy charges for specified H.T consumers as an incentive to new industries for the first three years from the date of their going into production.
2. The A.P.S.E.B requested the Director of Industries to specify the industries which would be eligible for the said 25% concession in power tariff. The Director Industries has suggested that it is desirable to notify a list of industries which will not be eligible for the concession so that any other industry which’ is not in the list will be automatically entitled to the remission in power tariff.
3. The Government have carefully examined the proposals of the Director of Industries and have decided that the 25% concession in power tariff should be extended to any new industrial unit going into regular production on or after 1-1-1976 and that this concession should not be applicable to the 65 excluded industries notified in G.O. ‘Ms. No. 224, Inds. & Com., dated 9-3-1976 wherein the revised scheme of State incentives was approved. The said list of 65 industries is appended to this order.
4. The Government have also decided that the concession in power tariff available to Industrial units under the old power tariff of the A.P.S.E.B prior to its revision with effect from 20-10-1975 should be allowed to continue for the unexpired portion of the period for which the industrial units were permitted to avail of the said concession by the A.P. State Electricity Board.
After the Government issued the aforesaid G.O. Ms. No. 654, dated 13-7-1976, the Andhra Pradesh State Electricity Board issued B.P. Ms. No. 691, Commercial dated 10-8-1976 extending the benefit of 25% concession in power tariff to the industrial units (other than the 65 excluded industries notified in G.O. Ms. No. 224, Industries and Commerce Department dated 9-3-1976) from
the dale of their going into regular production on or after 1-1-1976. Later on the Government in G.O. Ms. No. 38, Industries and Commerce Department dated 20-1-1977 have ordered that:
“the 25% concession in power tariff for select new industries should be extended to new industrial units that go into commercial production on or after 1-1-1976. As the concession in power tariff enjoyed by H,T. consumers under the old tariff of the A.P.S.E.B. ceased to operate with effect from 20-10-1975, the date on which the revised power tariff notified by the Electricity Board came into force the Government have since decided that the 25% concession in power tariff approved in the Government order read above shall be enforced with effect from 20-10-1975 itself. The orders issued in the Government order read above shall be deemed to have been modified to this extent. This revised date will also govern the industries that undertake substantial expansion to which the power tariff concession was extended in G.O. Ms. No. 1049, Industries and Commerce dated 15-12-1976.”
Thereafter the State Electricity Board issued B.P. Ms. No. 946, dated 14-10-1987 adding one more industry to the prohibited category as item No. 66 (mini steel plants). Later on the State Electricity Board issued B.P. Ms. No. 1098 dated 8-12-1987 notifying 7 more industries which will not be entitled for the concession in power tariff which was extended to new industrial units earlier. Thereafter, the Government have issued G.O. Ms. No. 379, Industries and Commerce Department dated 27-7-1989 agreeing with the suggestion of the State Electricity Board for inclusion of 8 more industries to the prohibited category which are ineligible for concession in power tariff.
5. As a result of the action of the A.P. Electricity Board in issuing B.P Ms. No. 1098 dated 8-12-1987 the petitioner-industry which was manufacturing ferro products was excluded from the benefit of 25% concession in power tariff and it was followed by the orders of the Government in G.O. Ms. No. 379 dated 27-7-1989. It was from this date onwards
i.e., 27-7-1989 that the petitioner was depriv
ed of the 25% concession in power tariff
extended by the Board.
6. According to the petitioner the ferro industries became ineligible for power, concession with effect from 27-7-1989, the date on which G.O. Ms. No. 379 (dated 27-7-1989) was issued by the Government but not with effect from 8-12-1987, the date on which B.P. Ms. No. 1098 (dated 8-12-1987) was issued by the A.P. Electricity Board. The prohibited industries will not be entitled for power concession only with effect from 27-7-1989 and as the petitioner went into commercial production on 16-9-1988 long before G.O. Ms. No. 379 (dated 27-7-89) was issued, it will be entitled for the power concession, is the case of the petitioner. But the contention of the learned standing counsel for the A.P. Electricity Board is that the date of ineligibility is the date on which the Board issued B.P. Ms. No. 1098 dated 8-12-1987 withdrawing the said concessions. The petitioner on the other hand contends that the Electricity Board has no power to withdraw the concession granted earlier by the Government in G.O. Ms. No. 654, dated 13-7-1976 as clarified by G.O. Ms. No. 38, dated 20-1-1977, for the Government in exercise of the statutory powers conferred upon it under S. 78A of the Electricity (Supply) Act, 1948 have issued the said G.Os. as part of its policy decision. On the other hand, it is contended on behalf of the Electricity Board that the B.P. Ms. No. 1098 dated 8-12-1987 was issued by the Board in exercise of the powers vested in it by S.49 of the Electricity (Supply) Act, 1948. Ss. 49 and 78 A of the Act are to the following effect:
Section 49: Provision for the sale of electricity by the Board to persons other than licensees:– (1)Subject to the provisions of this Act and of regulations, if any made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs.
(2) xx xx (3) xx xx (4) xx xx
Section 78 A : Directions by the State Government :– (1) In discharge of its functions, the Board shall be guided by such directions on questions of policy as may be given to it by the State Government.
(2) xxx xxx xxx xxx
7. According to Section 49 of the Act, the Board is entitled to fix the tariffs with regard to supply of electrical energy. Section 78A of the Act empowers the State Government to issue directions to the Electricity Board on questions of policy and the Board shall be guided by them in discharge of its functions. It is the contention of the learned counsel for the petitioner that the Government in exercise of its policy decision have issued directions in G.O.Ms. No.654, dated 13-7-1976 as subsequently modified in G.O.Ms. No. 38, dated 20-1-1997. As the directions contained in the said G.O.s. are on questions of policy, under Section 78A of the Act, they are bound to be followed by the Electricity Board. These concessions in power tariff extended to the specified H.T. consumers as an incentive to the new industries for the first three years and later the concessions were extended for a period of two more years by the Government. The Government only specified 65 industries appended to the said order as ineligible for the power tariff concession. Later on Government in exercise of its powers has also excluded certain other industries which are ineligible for the benefit of power concession. The decision of the Government in excluding certain industries is based on its policy. It cannot be said that the Government has merely accepted the suggestion of the State Electricity Board as the Board wanted to extend 25% rebate in energy charges for new industries for a period of three years from the date of their going into production.
8. The learned standing counsel for the State Electricity Board has placed before us a copy of the B.P.Ms. No. 679, dated 17th September, 1975 by which the tariff rates were revised. Clause (7) of the B. P. is as follows :–
“7. Concession for New Industries:– A rebate of 25% of demand and energy charges for specified H. T. industries will be allowed
for the first three years from the date of their going into production.”
He submits that this concession has been granted to the new industries by the Board in exercise of the powers vested in it under Section 49 of the Electricity (Supply) Act, 1948 and not by virtue of the orders issued by the Government, as such it is competent to issue B. P. Ms. No. 1098 dated 8-12-1987 by which the petitioner-industry became ineligible for the power tariff concessions.
9. Now the question is whether the orders issued by the Government in G. O. Ms. No.654, dated 13-7-1976 and subsequent orders in G.O.Ms. No. 38, dated 20-1-1977 which were followed by the Board in its B. P. were in confirmity with the directions of the Government ? Section 78 A of the Act merely gives power to the Government to issue directions on questions of policy and the Board shall be guided by it. The most important aspect of the case is that though the Board mentions about the concessions for specified H. T. consumers”, in clause (7) of B. P. Ms. 689 dated 17th September, 1975, it has neither specified the industries which will be entitled for the concessions nor the date on which the rebate will come into force. In such circumstances, the Board approached the State Government and in turn the State Government took the decision after considering all the aspects and the decision came out in the form of G.O.Ms. 654, Industries and Commerce, dated 13-7-1976. Allowing or disallowing the benefit of power tariff concessions to any category of industries is evidently a policy matter of highest importance and that is the reason why the Electricity Board did not independently take a decision in that regard and it was left to the Government.
10. During the course of argument, we have asked the learned standing counsel for the Board as to whether the Board has implemented B. P. Ms. No. 1098, dated 8-12-1987. The learned standing counsel stated in reply that after the issue of the said proceedings a number of writ petitions have been filed by parties before this Court challenging the same, as a result of which the Board has approached the Government and, therefore,
the Government have issued G.O.Ms. No. 379, dated 27-7-1989 incorporating 8 more industries to the prohibited category which are ineligible for the power tariff concessions. We have perused the copy of the letter D.O. No. SE (coml.) 11/1770/75,dated 23-5-1989 addressed by Mr. T. L. Shankar, Chairman of the A. P. Electricity Board to the Principal Secretary E.F.L.S. & T. Department. The letter inter alia states:
“….. Though the Board has issued B. P. on this on their own, presence of the G. O. 654 of 1976 somehow created an illusion between the Government order and the B.P. In order to harmonise the two orders, I suggest that you may issue another G.O. in which the list of industries which are not eligible for the concessions may be enlarged to include the above eight making the total number to 73 as ineligible.
As number of Court cases involving crores of rupees will be decided based on this, I would request that these orders may be issued immediately.”
The above two extracted paragraphs clearly suggest that the Board wanted to legalise the issue and wanted the Government to put it on a firm legal basis. It is apparent from the various Government orders brought to our notice that the Government is extending incentives for the new industries to be set up in the State of Andhra Pradesh and granting other facilities and concessional rates in power tariff for selected new industries eligible for the concessions and issuing orders in this regard. Following the same, the Electricity Board is issuing Board proceedings in pursuance of the said G.Os. The finality of decisions came from the Government but not from the Board. The Board itself has treated the power tariff concession question as one falling within the ambit of “policy” and followed the “guidance” of the Government which came in the form of “directions”. Dehors Section 78A there is no provision in the Act empowering the Government to issue-“directions” or “instructions” for the guidance of the Board. Therefore, we have no hesitation in holding that the Government in exercise of powers under Section 78A of the
Electricity (Supply) Act, 1948, have been taking policy decisions as to the entitlement of the power concession to the industries and issuing orders reckoning the date of extension of concessions as the date on which the industry went into regular production, as such the ineligibility for the industries manufacturing ferro products like the petitioner operates from the date of issue of G.O.Ms. No.379 dated 27-7-1989 but not from any earlier date. As it is not disputed that the petitioner has commenced commercial production with effect from 16-9-1988, it will be entitled for the benefit of power tariff concession as mentioned in G.O.Ms. No. 654 dated 13-7-1976 which- was extended by G.O.Ms. No. 38, dated 20-1-1977.
11. The question of promissory estoppel urged by the learned counsel for the petitioner against the Board has no relevance in this case, as we have held that the date of applicability of ineligibility to the Board’s concessions is the dale on which G.O.Ms. No. 654 has been issued by the Government i.e., 13-7-1976 which was subsequently modified in G.O.Ms. No. 38, dated 20-1-1977. As the petitioner commenced regular production with effect from 16-9-1988 it falls within the period when G.O.Ms. No. 379 was issued i.e., 27-7-1989 which is much earlier, as a result, the petitioner-industry would be entitled to the rebate of 25% for a period of three years reckoning from 16-9-1988 when it commenced regular production.
12. The prayer in the writ petition is that the petitioner-unit is entitled for 25% rebate till the completion of initial five years as enunciated in G.O.Ms. No. 375, dated 23-8-1985. Paragraph 3(II)(ii) of the G.O. is as follows:
“Power: At present, the Andhra Pradesh State Electricity Board offers 25% tariff concession for the first 3 years for certain industries. This concession would be extended to two more years i.e., a total of 5 years, 25% concession tariff would be met for the additional 2 years from out of the industries budget.”
The learned standing counsel for the State
Electricity Board says that inasmuch as the Government has not been made a party to the writ petition and as the financial burden has to be borne by the State Government, the petitioner-industry is not entitled for rebate in power tariff for the five year period as prayed in the writ petition. We are inclined to agree with the submission. When the petitioner is basing its claim on an order passed by the Government under which the financial obligation was taken over by the Government, in the absence of the Government being made a party to the writ petition, we cannot issue any direction which will have the effect of burdening the Government financially. The learned standing counsel for the Electricity Board has also mentioned that similar view was taken by another Division Bench of this Court with regard to the eligibility for power tariff concessions confining the same only for a period of three years. We are, therefore, of the view that the petitioner-industry is entitled for 25% tariff rebate in power for a period of only three years with effect from 16-9-1988 the date on which it had commenced regular production.
13. The Writ Petition is accordingly allowed and a Mandamus will issue as indicated above. There shall be no order as to costs.
Petition allowed.