TNR Desk
In a setback to the Sukhvinder Singh Sukhu-led Congress government, the Himachal Pradesh High Court has invalidated the Himachal Pradesh Water Cess Act, terming it as unconstitutional.
The Act, which aimed to levy water cess on hydropower generation, faced vehement opposition from 40 hydropower companies, leading to a legal battle that culminated in the High Court’s ruling. A senior lawyer confirmed the court’s decision, revealing that a division bench comprising Justice Tarlok Singh Chauhan and Justice Satyen Vaidya rendered the Act beyond the jurisdiction of the state Assembly.
The Act, which envisioned the formation of a Water Cess Commission, was challenged on grounds of constitutional violations by the aggrieved companies. The High Court’s verdict nullifies the efforts of the Sukhu government, which sought to generate revenue of Rs 2,500 crore annually through the imposition of water cess on 175 hydel power projects in the state.
The court’s ruling emphasised that the imposition of the water cess contravened constitutional provisions, marking a significant setback for the state government’s revenue targets. The decision also opens avenues for further legal recourse as the state government may challenge the ruling in the Supreme Court.
The legal battle surrounding the Himachal Pradesh Water Cess Act underscores the broader conflict between government initiatives and private electricity giants, including prominent entities such as NTPC, BBMB, NHPC and SJVNL. Private companies have argued that existing agreements with central and state governments exempt them from water charges. The contentious legislation has garnered attention not only within Himachal Pradesh but also in other states like Uttarakhand, Sikkim, and Jammu and Kashmir, which have similarly imposed water cess on hydropower generation.
Himachal Pradesh High Court strikes down water cess as unconstitutional, major setback to Sukhu govt’s plans to generate ₹2,500 crore annual revenue
