Decided on November 17,1994



Per S. Kannan, Accountant Member - These two appeals, one by the assessee and the other by the department, were heard together and are disposed of by a common order for the sake of convenience. - (1.)
(2.) There is one issue that is common to both the appeals and that is centered on the admissibility of revenue deduction in respect of the provision made by the assessee in relation to the incremental sum which the assessee was obligated to pay owing to the upward revision of the High Tension (HT for short) power tariff effected by the Andhra Pradesh State Electricity Board (APSEB for short) on two consecutive occasions. We propose to deal first with this common issue. The assessee-company manufactures and markets cotton and synthetic yarn. The assessee was carrying on the manufacturing operations in two factories - one at Kakinada and the other at Vizianagaram. It was drawing its HT power requirements from the APSEB. It is a matter of record that for the said purpose it had entered into agreements with the APSEB. By an agreement dated 20-8-1982, the APSEB contracted to supply and the assessee had contracted to lift 1500 KVA for the Kakinada Unit. By another agreement dated 15-7-1985 the contracted demand for the Vizianagaram Unit was 1200 KVA. It may here be highlighted that the said agreements were in the proforma prescribed by the APSEB.
(3.) BY BPMs No. 671 (Commercial) of 10-6-1987 the APSEB revised the HT tariff upward w.e.f. 15-7-1987. This was the signal for the assessee to file writ petition bearing No. 19893 of 1987 before the Andhra Pradesh High Court challenging the upward revision. The assessee also filed Writ Petition, Miscellaneous Petition No. 26402 of 1987, seeking stay of collection of the incremental demand occasioned by the said upward revision of HT tariff, and by their order dated 30-12-1987 (in the said WPMP) the High Court, inter alia, ordered : ".......... that on condition the petitioner company herein pays 50% of the increased rate as per the revised tariff, the collection of electricity charges from the petitioner company herein at the increased rates as per the B.P.Ms. No. 671 (Commercial) dated 10-6-1987 of the 1st respondent herein viz., The Secretary, A.P.S.E.B., Vidyutsudha, Samajiguda, Hyderabad as brought into force from 15-7-1987 be and hereby is stayed pending further orders on this petition.";

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