Section 127 appellate authorities must adjudicate challenges to entire Section 126 assessment orders on merits.

The petitioner, a medium-scale cement manufacturing unit with a sanctioned contract demand of 1067 KVA, was subjected to surprise inspections on 15 February 2008 and 3 June 2008. The inspections allegedly disclosed meter-seal tampering, theft and pilferage of electricity, following which criminal cases were instituted and the petitioner’s electricity supply was disconnected

Assessment orders dated 19 February 2008 and 11 July 2008 were passed under Section 126 of the Electricity Act, 2003, assessing amounts of ₹7,14,720 and ₹28,58,736 respectively. The petitioner deposited these amounts to secure restoration of electricity

The criminal proceedings subsequently ended with acceptance of final reports, although the Electricity Board filed a protest petition, registered as Complaint Case No. 874 of 2009

The petitioner’s earlier writ petitions were withdrawn with liberty to pursue statutory appeals under Section 127 of the Electricity Act. The appeals were ultimately dismissed by the appellate authority on 31 January 2019 on the ground that, in view of Section 154 and the pending protest petition, the authority lacked jurisdiction to direct refund and the appeals were not maintainable

Whether the appeals under Section 127 of the Electricity Act were maintainable when the petitioner challenged the assessment orders in their entirety, although it also sought refund of the deposited amounts?

Whether the appellate authority erred in dismissing the appeals solely on the basis that it lacked jurisdiction to order refund under Section 154, without adjudicating the petitioner’s challenge to the assessment orders on merits?

The Court applied Section 126 of the Electricity Act, 2003, which governs assessment of charges for unauthorised use of electricity, and Section 127, which provides the statutory appellate remedy against an assessment order under Section 126

The Court also considered Section 154, which was relied upon by the appellate authority in relation to the consequences of criminal proceedings and refund.

The appellate authority exercising power under Section 127 acts as a quasi-judicial authority and must consider the appeal comprehensively, hear the parties, and pass a reasoned order addressing the grounds and reliefs raised

It cannot reject an appeal merely by considering one ancillary relief, such as refund, while failing to adjudicate the substantive challenge to the assessment order.

The High Court examined the prayers in the petitioner’s memoranda of appeal and found that the petitioner had expressly sought setting aside of the assessment orders, in addition to refund, interest and consequential relief

Therefore, the respondent’s contention that the petitioner had not challenged the entire assessment order was rejected.

The appellate authority had focused only on its perceived inability to direct refund under Section 154 because the protest petition was pending, and consequently dismissed the appeals as not maintainable

This approach failed to address the principal statutory challenge under Section 127 to the assessment orders themselves.

The High Court accordingly held that the appellate authority had not exercised its quasi-judicial jurisdiction properly and was required to decide the appeals on their merits

The matters were remanded to the appellate authority to consider the petitioner’s complete challenge to the assessment orders, hear the parties, and pass reasoned orders within three months of receiving the High Court’s order.

The appellate authority was directed to consider limitation in light of the pendency of the writ petitions since 2021

The writ petitions were consequently allowed, without the High Court itself deciding the substantive validity of the assessments or directing immediate refund.