high-court-quashes-water-cess-on-hydropower-projects-in-himachal-pradesh

In yet another jolt to the state government, the Himachal Pradesh High Court today quashed and set aside the HP Water Cess on the Hydropower Electricity Generation Rules (2023).

 

A Division Bench of Justice Tarlok Chauhan and Justice Satyen Vaidya held that the provisions of the Himachal Pradesh Water Cess on Hydropower Electricity Generation Act, 2023 are 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.

 

The Bench said that Sections 10 and 15 of the Himachal Pradesh Water Cess on Hydropower Electricity Generation Act, 2023, as have been made applicable to the existing projects, are also declared to be ultra vires the Constitution and are accordingly quashed and set aside.

 

The amount, if any, recovered by the respondents from the petitioners is ordered to be refunded within four weeks,  the order said.

 

It is pertinent to mention that the state government had levied the water cess on hydro power projects, terming it a resource mobilization measure and has already collected around Rs 800 crore on this account from the power companies.

 

Several power companies had approached the court against this decision of the state government.

Himachal Pradesh High Court declares the State Government's water cess on hydropower generation Unconstitutional.

 

Himachal Pradesh High Court Quashes HP Water Cess on Hydropower Rules (2023)"

 

"In a significant setback for the state government, the Himachal Pradesh High Court, through a Division Bench led by Justice Tarlok Chauhan and Justice Satyen Vaidya, has declared the Himachal Pradesh Water Cess on Hydropower Electricity Generation Act, 2023, unconstitutional.

 

The court specifically invalidated Sections 10 and 15, applicable to existing projects, ordering the refund of any amounts collected within four weeks.

 

The decision follows a legal challenge by several power companies against the state government's imposition of water cess on hydro power projects, aimed at resource mobilization and already totalling around Rs 800 crore in collections."