SC stays Himachal High Court’s order on ₹36 crore water cess payment to power firms
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DHARAMSHALA: The Supreme Court has stayed the Himachal Pradesh High Court’s order directing the state government to refund the water cess collected from power companies within six weeks. This decision provides temporary relief to the Himachal government, which had sought intervention from the apex court following the unfavourable ruling from the High Court.
The Himachal Pradesh government had imposed a water cess, totaling ₹36 crore, on 21 power companies, including both government entities like the electricity board and power corporation. The High Court had earlier ordered that these funds be returned to the companies, a decision that the state government challenged in the Supreme Court.
The matter was heard on Friday, just before the Supreme Court commenced its summer vacation, which extends until July 2. During this period, no further hearings on the water cess issue will take place, effectively postponing any immediate refund obligations for the state government.
The Supreme Court has also issued notices to the power companies that were favoured by the High Court’s decision, requiring them to present their case in the coming proceedings. This move indicates that the apex court will consider arguments from both sides before making a final ruling.
The Himachal Pradesh government is aiming to generate an annual revenue of Rs 2,000 crore through the water cess. This target was set after the government reduced the water cess rates by half, hoping to make the levy more palatable.
However, the High Court’s order to refund the collected cess posed a significant setback to these plans, prompting the state’s appeal to the Supreme Court.
To strengthen its case, the Himachal government has engaged four senior lawyers, investing significant resources in the legal battle. Despite the High Court’s ruling, the Water Cess Commission established by the state continues to operate and will do so until the Supreme Court delivers a conclusive verdict.
