In Brief
NTPC acquired the Tanda Thermal Power Station from the Uttar Pradesh State Electricity Board in 2000 for Rs. 607 Crores. For tariff determination, the Central Electricity Regulatory Commission restricted depreciation computation to Rs. 431.09 Crores, citing a distinction between tax and regulatory treatment. The Supreme Court held that depreciation in tariff regulation must be based on the actual purchase consideration paid by the undertaking, consistent with accounting principles. Following precedent, the Court set aside CERC's order and allowed NTPC's appeal, directing that depreciation be computed on the Rs. 607 Crores purchase price.
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