Cyril Amarchand Mangaldas Represented JSW Steel In Electricity Duty Writ Petitions

Cyril Amarchand Mangaldas successfully represented JSW Steel Limited in two Writ Petitions against the State of Maharashtra and Maharashtra State Electricity Distribution Company Limited

The leading law firm in India, Cyril Amarchand Mangaldas successfully represented JSW Steel Limited in two Writ Petitions before the Bombay High Court against the State of Maharashtra and Maharashtra State Electricity Distribution Company Limited (MSEDCL). The matter pertained to the levy of electricity duty despite the company holding a valid Eligibility Certificate under the State’s incentive scheme. The dispute involved interpretation of exemption notifications and their continued applicability post legislative changes. The ruling marks a significant victory for JSW Steel Limited in securing its entitlement to electricity duty exemption.

Background of the Incentive Scheme

JSW Steel Limited (“JSW Steel”) was issued an Eligibility Certificate on 3rd August 1998 (valid from 6th August 1998 to 5th August 2012) under the State of Maharashtra’s Package Scheme of Incentives, 1993 (“Scheme”) by its implementing agency, SICOM, for its Mega Project in Dolvi, Maharashtra, which recorded its eligibility for certain sales tax incentives under the Scheme.

In exercise of its power under Section 5A of the Bombay Electricity Duty Act, 1958 (“BEDA, 1958”), the State Government issued Notifications dated 29th December 1999 and 15th October 2001 (“Exemption Notifications”) granting an exemption to Mega Projects holding an Eligibility Certificate under the Scheme (such as JSW Steel Limited) from payment of electricity duty.

Extension of Eligibility Certificate

On 6th October 2012, by way of an Addenda (“Addenda”), the Eligibility Certificate was amended, extending its validity period for a further seven years, i.e., up to 5th August 2019. Thus, by virtue of the Exemption Notifications, JSW Steel Limited was exempted from electricity duty till 5th August 2019.

However, after August 2012, the State Government and Maharashtra State Electricity Distribution Company Limited started raising demands for electricity duty. Owing to the subsequent enactment of the Maharashtra Electricity Duty Act, 2016 (“2016 Act”), which came into force with effect from 1st September 2016, the State Government further contended that the electricity duty exemption had ceased to operate and no separate notification had been issued under the 2016 Act to revive it.

In view of the threat of disconnection of its electricity supply, JSW Steel Limited paid a total sum of Rs. 47,47,61,492/- towards electricity duty from 6th August 2012, under protest.

Proceedings Before the Court

Cyril Amarchand Mangaldas acted for JSW Steel Limited in two Writ Petitions (W.P. No. 12477 of 2015 and W.P. No. 13941 of 2016) filed before the Bombay High Court against the State Government and Maharashtra State Electricity Distribution Company Limited (Respondents), inter alia, challenging the levy of electricity duty during the period from 6th August 2012 to 5th August 2019.

The State Government’s position was that JSW Steel Limited was not entitled to electricity duty exemption beyond 5th August 2012. It argued that the Addenda extended only the validity period of the Eligibility Certificate and not the period of eligibility, and that no fresh notification was issued under Section 5A of the BEDA, 1958 or the 2016 Act to extend the exemption beyond 5th August 2012. The State also contended that exemption notifications must be strictly construed in its favour.

Court’s Findings

The Court held that the plain language of the Exemption Notifications, read with the Eligibility Certificate and Addenda, leaves no doubt that so long as the Eligibility Certificate was valid, the exemption under the Exemption Notifications in terms of Section 5A of the BEDA, 1958 was to operate.

The Court rejected the State Government’s contention that the electricity duty exemption ceased upon the 2016 Act coming into force. It held that all Notifications issued under the BEDA, 1958 are expressly saved by the proviso to Section 4 of the 2016 Act, which provides that nothing in the 2016 Act shall affect any order issued before its commencement, and such orders shall continue to be in force until the period mentioned therein expires.

The Court further held that after the issuance of the Addenda, no fresh Notification was required to be issued under Section 5A of the BEDA, 1958 or under the 2016 Act, because the exemption under the Exemption Notifications was always linked to the Eligibility Certificate, and once the Eligibility Certificate was extended by the Addenda, the exemption also stood extended correspondingly.

Final Judgment and Relief

The Court, by way of its judgment dated 2nd April 2026, held that in view of the Exemption Notifications read with the Eligibility Certificate, JSW Steel Limited is entitled to exemption from payment of Electricity Duty during the period from 5th August 2012 to 5th August 2019.

It further held that the action of the State Government and Maharashtra State Electricity Distribution Company Limited in not continuing the exemption and in charging electricity duty during the said period is illegal. The Court also passed an order restraining the State Government and Maharashtra State Electricity Distribution Company Limited from disconnecting the electricity supply of JSW Steel Limited.

Refund 

The Court also directed that the amount of Rs. 47,47,61,492/- paid by JSW Steel Limited towards electricity duty under protest be refunded within a period of 12 weeks.

Legal Representation

The Cyril Amarchand Mangaldas team was led by Vineet Unnikrishnan (Partner), with support from Veena Hari (Associate) and Karthika Sanjay (Associate),and Vikash Jha (Partner) was also involved in the initial stages of the matter.

The Cyril Amarchand Mangaldas team briefed Janak Dwarkadas (Senior Counsel) and Chirag Kamdar (Counsel).

Conclusion

This ruling reinforces the principle that statutory exemptions linked to valid eligibility certificates must be honoured for their entire duration. The decision provides clarity on the continued applicability of exemption notifications despite subsequent legislative changes and underscores the importance of consistent policy implementation for industrial incentives.

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