U'khand HC to levy water tax on hydropower projects in state

Uttarakhand High Court
Uttarakhand High Court

Uttarakhand high court has upheld the constitutional validity of 2012 legislation enacted by Uttarakhand government to levy water tax on hydro power projects of more than 5 MW capacity in the state on water drawn for power generation at the rates decided by the state government, as per the order. The court dismissed a bunch of writ petitions filed by hydro power project companies challenging the law.

The HC ruled, “There is no prohibition in the Constitution that the State legislature cannot enact any law for the imposition of tax on water for non-consumptive use in the State of Uttarakhand, therefore, in absence of any provision in this regard, no fault can be attached to the act in question”.

The court order stated that a bare reading of the 2012 act reveals the nature of impugned tax is not on “generation of electricity” but on the “use of water”’ or say “water drawn for the generation of electricity”.

The HC noted that since Uttarakhand is mainly a hilly, cash-starved state with limited revenue resources, therefore, a uniform tax has been introduced on all who use the water of the state rivers- Bhagirathi and Alaknanda-- in order to give sustenance to its economy. It stated that the act on water tax does not infringe upon the fundamental right of the petitioners in any way.

The court also vacated an interim order issued by a coordinate bench of Uttarakhand HC in 2016 directing authorities concerned not to take coercive measures for recovery of the water tax demand from the petitioners.

The 87-page order, delivered by the single bench of justice Lok Pal Singh on Friday was made available on Saturday.

The petitions, challenging the constitutional validity of the Uttarakhand Water Tax on Electricity Generation Act, 2012 and the notices issued to them for realisation of due water tax, were filed by companies including Alaknanda Hydro Power Co. Ltd (2020), THDC India Ltd (2016), National Hydro Power Corporation (2016), Swasti Power Pvt. Ltd (2016), Bhilangana Hydro Power Ltd (2016), Jaiprakash Power Ventures Ltd (2017).

Petitioners had alleged that their fundamental rights guaranteed under Article 14 of the Constitution were violated by the state under the 2012 act. They also claimed that authorities neither installed any flow measuring device within the dam premises nor they adopted any alternative method to measure the quantity of water used.

The petitioners also claimed that the tax on the generation of electricity falls under List I (Union List) and, therefore, the state legislature was incompetent to levy tax under the act. They also argued that Entry 17 of List II (State List) does not authorise or empower a state to levy any such tax on the use of water.

While dismissing the petitions, the court order also stated it has been informed that the nodal officer of the Uttarakhand government had made a provisional assessment of water drawn by petitioner companies and the tax due from them.

Disclaimer: This story has not been edited by Water Today staff and is generated from news feeds. Source: Hindustan Times

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