Summary:
The price paid for the purchase of electricity through Open Access Source is different than the price paid by it for the electricity sold to it by the licensee –HESCOM.
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The Karnataka High Court has held that whenever a consumer purchases electricity from Open Access Source, the tax on electricity will be chargeable at the rate at which the consumer purchased electricity, instead of the higher charges at which it is supplied by a licensee.
"If a consumer is to pay electricity tax on charges higher than the one supplied by the licensee, necessarily, whenever, the licensee procures through Open Access Source, electricity at a lower rate, the charges would have to be calculated on the rate at which the consumer had purchased the electricity.
A single bench of Justice N.S.
Sanjay Gowda, while allowing the petition filed by M/S SOUTHERN FERRO LTD, on March 15, said "If the argument of the State is accepted that electricity tax is payable at the rate at which the licensee sells the electricity to consumers, it would fundamentally defeat the very purpose for which the electricity reforms were initiated which enabled the consumers to procure electricity from private purchasers and through Open Access Source."
Senior Advocate Gurudas Kannur, appearing for the company submitted, Apart from electricity supplied by the licensee i.e., Hubli Electricity Supply Company Limited (HESCOM), it is also supplying energy from the energy exchange every month which is called the purchase of electricity from Open Access Source.
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