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Himachal Pradesh Electricity Duty for Industries: High Court caps levy at 16.5%, stays steep State hike
The Himachal Pradesh High Court has restrained the State Government and the Himachal Pradesh State Electricity Board Limited (HPSEBL) from recovering electricity duty beyond 16.5%, observing that the successive hikes imposed by the State appear prima facie contrary to statutory provisions.
The interim order was passed in CWP No. 2102 of 2026, M/s Verma Stone Crusher vs State of Himachal Pradesh & Anr., heard on February 26, 2026, by a Division Bench comprising Justice Vivek Singh Thakur and Justice Ranjan Sharma. The court issued notice to the respondents, with the State represented by the Additional Advocate General and HPSEBL by senior counsel.
The development assumes importance for Himachal Pradesh’s industrial ecosystem, which has been grappling with a sharp rise in electricity duty over the past two years. The petitioner challenged the steep escalation in duty rates, arguing that the increase from 11% to 25% in September 2023, followed by a further hike to 37.50% in January 2024, violated the provisions of the Himachal Pradesh Electricity (Duty) Act, 2009.
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Under Section 11(2) of the Act, the State is permitted to revise electricity duty rates, but such revision cannot exceed 50% at any one time of the rates earlier specified. The petitioner contended that the successive hikes breached this statutory ceiling.
Taking note of this argument, the High Court observed that the escalation from 11% to 25% and thereafter to 37.50% prima facie appears inconsistent with the permissible limits under the law. Pending further examination, the court directed that electricity duty shall not be recovered beyond 16.5% from medium and large industries.
During the hearing, counsel for the respondents submitted that the issue involved is legal in nature and is already under consideration in a connected matter, CWP No. 15413 of 2024, and therefore no separate reply was required. Accepting this submission, the court ordered that the present case be listed along with the connected petition on April 23, 2026.
The interim relief effectively rolls back the immediate financial burden on industrial consumers, at least until the matter is finally adjudicated. The outcome of the case is likely to have wider implications on the State’s revenue measures and industrial policy, particularly at a time when Himachal Pradesh has been under pressure to mobilize additional resources.
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