The Himachal Pradesh High Court has dismissed a writ petition filed by the Himachal Pradesh State Electricity Board Limited (HPSEBL), upholding the appellate authority's decision to set aside an assessment of ₹1.65 crore imposed on M/s Sunoxx International for alleged unauthorised use of electricity.

The Court held that proceedings under Section 126 of the Electricity Act, 2003, could not be sustained when the Assessing Officer had not inspected the premises and the assessment was initiated on the basis of an audit report and the Electricity Board's records. The Court found no illegality in the appellate authority's decision, which had set aside the assessment for non-compliance with the prescribed procedure.

Justice Sandeep Sharma remarked that: “In the instant case, proceedings never came to be commenced with the inspection of premises by Assessing Officer, rather, same came to be initiated on the basis of record of Electricity Board, thus, no illegality can be said to have been committed by Appellate Authority, while passing impugned order.”

Background of the Case

The dispute arose after the Himachal Pradesh State Electricity Board Limited (HPSEBL) imposed an assessment of ₹1,65,34,470 on M/s Sunoxx International for alleged unauthorised use of electricity due to overdrawal of its contracted demand.

The assessment was initiated on the basis of an audit report covering the period from March 2011 to November 2015. After the initial assessment was set aside and the matter remanded, the Board issued a fresh assessment order on September 17, 2020.

The Divisional Commissioner, acting as the Appellate Authority, set aside the fresh assessment on January 11, 2023, citing procedural lapses and the failure to comply with the prescribed inspection requirements. HPSEBL challenged this order before the High Court.

The Himachal Pradesh High Court held that an assessment under Section 126 of the Electricity Act, 2003, could not be sustained when the Assessing Officer had not inspected the premises and had relied on an audit report and the Electricity Board's records. The Court noted that the mandatory inspection procedure and the requirements under the Himachal Pradesh Electricity Supply Code, 2009, had not been followed. It also observed that the assessment failed to adequately address the objections raised by the consumer and was issued despite the earlier disconnection and settlement of the final bill.

Finding no illegality in the Appellate Authority's decision, the Court dismissed HPSEBL's writ petition and upheld the order setting aside the assessment.

Date of Decision: 18.09.2026