The commission issued the order in response to a petition filed by Parampujya Solar Energy Pvt. Limited (PSEPL), a wholly owned subsidiary of Adani Green Energy Limited, and Wardha Solar (Maharashtra) Private Limited (WSPL), a wholly owned subsidiary of PSEPL. The petitioners made the following requests to the commission:
(a) Hold and declare that the imposition of the Integrated Goods and Services Tax, 2017, Central Goods and Services Tax, 2017 and Karnataka/Telangana/Maharashtra Goods and Services Tax, 2017 is an event under Change in Law under Article 12 of the PPA;
(b) Restore Petitioners to the same economic condition prior to the occurrence of the Petition No. 206/MP/2018 &Ors. Page 8 of 51 Changes in Law by way of adjustment in tariff in terms of Article 12 of the PPA by increasing the tariff as prayed for in the present Petition;
(c) Pending proceedings, direct Respondents to pay to Petitioners the amount claimed under Change in Law which shall be subject to adjustment based on the final order passed by the Commission.
However, the respondents, in the case, have argued about the scope and applicability of Article 12 of the PPA and said that in the present PPA, there is no clause dealing with the specific relief under the construction period and therefore, the entire basis of ‘Change in Law’ provision does not arise. It further argued that the relief for taxes is admissible in case of – “any change in tax or introduction of any tax made applicable for the supply of power by the solar power developers (SPD) as per the terms of this agreement (PPA).” Therefore, the scope for Change in Law is restricted to the taxes which are imposed for the ‘supply of power’ and other than that the conditions for relief are not admissible.
The commission observed that it has already cleared that any tax levied through an Act of Parliament after the cut-off date which results in the additional expenditure by the petitioner is covered as ‘Change in Law.’ Previously, it also made it clear that any tax or application of the new tax on ‘supply of power’ covers the taxes on inputs required for such generation and supply of power to the DISCOMs. Therefore, the present case is no different and the enactment of GST laws will be covered as ‘Change in Law’. The petitioners had also requested the commission to consider the claim of ‘Carrying Cost’ under the principle of recovery of carrying cost/interest and time value of money. However, the commission rejected the plea on the basis that no such provision is mentioned in the PPA for ‘dealing with restitution principles of restoration to the same economic position.’