Shimla (Himachal Pradesh): In a blow to the Sukhvinder Singh Sukhu-led government, the Himachal Pradesh High Court on Tuesday termed the water cess unconstitutional. The High Court observed that the Himachal Pradesh Legislative Assembly does not have the constitutional right to make such a law.
The notification issued by the Himachal Pradesh government regarding the water cess law will be considered cancelled. A bench of the High Court comprising Justice Tarlok Singh Chauhan and Justice Satyen Vaidya issued these orders.
This law was challenged by hydro-power companies in the High Court. Advocate Abhishek Manu Singhvi argued the case on behalf of the companies. Abhishek Manu Singhvi was the Rajya Sabha candidate of the Congress in Himachal Pradesh.
As per the latest order of the High Court, the Himachal Pradesh government will not be able to collect water cess further. It is understood that the Sukhwinder Singh Sukhu government will challenge it in the Supreme Court.
After coming to power, the Congress government led by Sukhwinder Singh Sukhu imposed a water cess on the hydro-power projects established in the state to increase the revenue. From this, the government had set a target of raising revenue of at least Rs 1,000 crore per year. A separate Water Commission was also created and water cess was collected from several companies. Many power companies including Sutlej Hydropower Corporation challenged this law in the Himachal Pradesh High Court.
It is understood that about Rs 30 crores of cess had already been collected from some companies in the Jamahimachal area. About 172 hydro-power companies are running in Himachal Pradesh. Out of these companies, about 35 companies had deposited cess of Rs 27 to 30 crore. The Commission had issued notices to the rest of the companies to deposit the cess in a phased manner.
The Himachal government argued that it has rights over the water of the rivers flowing in the state. Its counsel argued that when Jammu & Kashmir and Uttarakhand are earning revenue by imposing water cess then Himachal Pradesh should also get its right.
In the High Court, the National Thermal Power Corporation, BBMB, NHPC and SJVNL argued that according to the agreement with the Center and the state they give 12 to 15 per cent free electricity to the state. In such a case, the collection of cess will not be correct according to the provisions of the Constitution.
On 25 April 2023, the Center wrote to the Chief Secretaries of all the states asking them to abandon the intention of collecting water cess. The Center stated that it was against the Constitution.
