Shimla, Mar 5
The Congress government of the State has suffered a big blow from the Himachal High Court as they have declared the Water Cess Act levied by Himachal Government as unconstitutional.
“The provisions of the Himachal Pradesh Water Cess on Hydropower Electricity Generation Act, 2023, are declared to be beyond the legislative competence of the State Government in terms of Articles 246 and 265 of the Constitution of India and, thus, ultra vires the Constitution,” stated the court order.
” The letter/notice issued by the State Government/Himachal Pradesh State Commission for Water Cess on Hydropower Generation pursuant to the impugned Act, Rules, seeking recovery of water
cess from the petitioners, are declared as illegal and are accordingly quashed and set aside,” stated the bench of Justices Trilok Chauhan and Satyen Vaidya on Tuesday.
Following this decision the state government will not be able to collect cess from the hydro electric project.
Congress’ Rajya Sabha MP election candidate advocate Abhishek Manu Singhvi and Solicitor General of India Tushar Mehta had appeared in the High Court virtually on behalf of the power generation companies. On behalf of the Himachal government, Dushyant Dave and other lawyers presented the Himachal government’s side in the court.
Around 40 power generating companies of the state had challenged the Water Cess Act of the State government in the High Court. ” The amount, if any, recovered by the respondents from the petitioners under the provisions of the Himachal Pradesh Water Cess on Hydropower Electricity Generation Act, 2023 and the Rules framed thereunder are ordered to be refunded within four weeks from today,” ordered the Division bench.
Noteworthy that as soon as the Sukhu government came to power, it had decided to impose water cess on power projects running in the state to generate economic resources. For this, an Act was made in the Legislative Assembly.
Directing about the act the court noted,” the Himachal Pradesh Water Cess on Hydropower Electricity Generation Rules 2023, are also quashed and set aside.”
Pertinent to mention that initially the government was expecting an income of about Rs 4000 crore every year from this exercise. However later the rate of water cess was reviewed whereafter the Himachal was expecting more than Rs 2000 crores additional revenue in the State exchequer.
Even a water commission was formed which was chaired by Retired IAS Amitabh Awasthi. About 170 companies had registered themselves with the Water Commission. Some companies had also started paying water cess to the government. But many big companies went to court against this decision.
This decision is being seen as a big blow to the Government who was intending make additional revenue from this cess. On the other hand the directive has brought relief to power producing companies. Earlier, the Central Government had also written to Himachal twice, banning the collection of water cess. Before Himachal, water cess is also being collected in Uttarakhand and Jammu Kashmir.
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