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The Madras High Court on Thursday dismissed a petition filed by Infosys Limited, which challenged an order passed by the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) to pay 6.5 crore rupee as a shortfall amount. Justice G.K. Ilanthirayan headed the bench.
NEW DELHI: The Madras High Court on Thursday dismissed a petition filed by Infosys Limited, which challenged an order passed by the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) to pay 6.5 crore rupee as a shortfall amount. Justice G.K. Ilanthirayan headed the bench.
In 2008, TANGEDCO issued a circular stating that all companies engaged in ITES activities should be billed under the commercial tariff. In May 2009, an audit inquiry report revealed that Infosys was engaged in software development and Information Technology Enabled Services (ITES) activities, as certified by MEPZ, Chennai. In 2012, TANGEDCO issued a demand notice and bill to Infosys for Rs. 6.72 crore, stating that it should be charged under the high tension commercial tariff for the period from April 2009 to November 2011 as it was operating ITES. In 2020, TANGEDCO issued a demand notice to Infosys for Rs. 6.76 crore as adjustment charges. In May 2024, Infosys filed a petition in the Madras High Court challenging TANGEDCO’s order.
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Infosys petitioned against TANGEDCO’s order due to a dispute over the tariff classification for electricity consumption. TANGEDCO demanded Infosys pay a higher commercial tariff, arguing that Infosys, engaged in software development and Information Technology Enabled Services (ITES), should be billed under the commercial tariff, not the lower industrial tariff.
Infosys contested this, stating it did not collect electricity charges from service providers and should not be liable for the additional charges. The disagreement stemmed from TANGEDCO’s classification of Infosys’ activities as commercial, leading to the petition challenging the demand for a higher tariff.
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In response to this, the judge said, “The petitioner collected license fees from its service providers. Though the service providers of the petitioner were not paying any rent or electricity charges and water charges for their portion, which was provided to them to run their business, they were running their business to the petitioner’s employees with profit. No service provider was running their respective business at a subsidized rate to the employees of the petitioner. All the service providers were running their business in their brand name, which was very familiar to the general public. For example, no bank would operate at a subsidized rate such as for low interest. No food provider would sell food without any profit, that too, all the food providers were running their business in their own brand name.”
