Gujarat High Court Allows Charitable Trust to Seek Retrospective Electricity Duty Exemption
Background of the Dispute
The matter in Sadvichar Parivar Vs State of Gujarat & Anr came before the Gujarat High Court as a writ petition under Articles 226 of the Constitution of India read with the provisions of the Gujarat Electricity Duty Act.
The petitioner, a charitable trust, challenged:
- A communication dated 06.03.2026 issued by Uttar Gujarat Vij Company Limited (UGVCL), and
- The consequent demand of electricity duty raised against it.
The assessee sought a declaration that it was not liable to pay any electricity duty, and also requested interim protection from coercive recovery during the pendency of the petition.
Activities of the Petitioner Trust
The Court recorded that the petitioner is a recognized charitable trust engaged in:
- Running hospitals
- Managing nursing centres
- Operating Primary Health Centres
- Carrying out various other charitable and social welfare activities
These activities were noted as being non-commercial in nature and aimed at public welfare.
Historically, the electricity consumed by the trust in connection with these activities had not been subjected to electricity duty for a considerable period. This long-standing practice formed an important factual foundation for the petition.
Shift in Position: Demand for Electricity Duty
Over time, the position of the authorities changed. At the instance of the State Government, UGVCL (respondent no.2) started recovering electricity duty from the petitioner.
The demand was raised on the ground that:
- The petitioner had not produced any certificate evidencing grant of electricity duty exemption by the State Government, and
- In the absence of such a certificate, the authorities declined to recognize any exemption from electricity duty.
Consequently, electricity duty was levied and demanded, including for earlier billing periods where no duty had previously been recovered.
Application for Exemption and Partial Relief
Faced with this new demand, the petitioner approached respondent no.2 and requested that its case be formally considered for exemption from electricity duty under the applicable provisions of the Gujarat Electricity Duty Act.
Pursuant to this request:
- The authorities examined the claim of the petitioner.
- The petitioner’s case was accepted for exemption, but only from 11.11.2025 onwards.
Thus, while the authorities acknowledged the charitable character of the trust and extended exemption prospectively from 11.11.2025, they declined to extend any such benefit for the earlier period beginning from 2010.
The assessee, therefore, continued to face liability and possible recovery of electricity duty for the period from 2010 up to 10.11.2025.
Petitioner’s Core Grievance
The central grievance placed before the Gujarat High Court was that:
- The petitioner had already been granted exemption under the Income Tax Act in recognition of its charitable status.
- Respondent no.2 had itself accepted this status and granted exemption from electricity duty after 11.11.2025.
- However, the claim for exemption from 2010 onwards had not been considered at all on merits by the State Government.
The petitioner, therefore, sought:
- Quashing of the communication dated 06.03.2026 by which the duty demand had been raised; and
- A declaration that no electricity duty was payable, including for the period prior to 11.11.2025, starting from 2010.