Vehement opposition by the Modi Govt & 40 firms, HC strike down Himachal Water Cess Act
After Vehement opposition from the Narendra Modi government and about 39 power companies including many blue chips firms, the Himachal Pradesh High Court today struck down the HP Water Cess Act likely to render a loss of Rs 2000 Cr per annum.
A division bench of Himachal Pradesh High Court comprising of Justice Tarlok Singh Chauhan and Justice Satyan Vaidya struck down the HP Water Cess Act which was enacted by the state Government to levy water cess on all hydro projects set up in the state.
The copy of the verdict is yet to be released but the counsel for the petitioner informed that the high court has upheld the petition stating that levying of tax in the water doesn’t fall under the ambit of State Government.
The state government also got a couple of letters from the Union Government warning the state to not impose water Cess as the counsel for the Union government stated that the state couldn’t levy such tax on the water as it did not fall under the state list and the move was against the constitution.
Including Union Government and around 40 firms who are executing around 11000 MW Watt power project in the state and harnessing waters for irrigation and drinking water from various water bodies and man-made dams opposed the state for bringing a law to levy cess on the water being used for generating hydropower energy.
The debt-ridden Himachal Pradesh Government decided to generate revenue from levying power companies which are mintting money from the power project. The Government of Himachal Pradesh already set up a Water Commission in the state and an IAS officer Anitab Awasthi was appointed its chairman and five other directors.
The state government initially targeted to collect revenue tune to Rs 4000 Cr but with the opposition of various power producers the target was reduced to 2000Cr.
BJP ruled Uttrakhand government also drawing water cess from hydropower project but Cebtre opposed the water Cess act of Himachal Pradesh and solicitor general of India Tushar Mehta is among top lawyer who opposed the water Cess in Himachal Pradesh High court.
SJVNL, NTPC, NHPC, and Jindal Power included 49 companies that are against the water cess and opposed the act after moving several writ petitions in the Himachal Pradesh High Court.
The huge revenue deficit of the state is forcing the hill state to bankruptcy as increasing expenditure on salaries and Pensions and payment of interest on loans have increased to 72 pc state of revenue expenditure.
Only 28 pc state revenue is left for development activities and the state government is relying to borrow an average loan of Rs 500 Cr per month to cover up the government’s whopping revenue deficit.
