HC notice to Himachal, Centre over plea against water cess

Shimla, April 26

The HP High Court today issued notice to the state and the Central Government on a petition challenging the constitutional validity of the HP Water Cess on Hydropower Generation Act, 2023.

A Division Bench comprising Acting Chief Justice Tarlok Singh Chauhan and Justice Virender Singh directed government officials to file their replies within three weeks.

The court issued the notice on a petition filed by Nanti Hydro Power Private Limited, Shimla, which contended that the levy of water cess would make hydropower projects commercially unviable and unsustainable, hampering the overall growth of the sector. It stated that the imposition of water cess on existing and future hydropower projects in Himachal would derail the development of new projects.

Rajneesh Maniktala, senior counsel for the petitioner, contended that the Himachal Pradesh Water Cess on Hydropower Generation Act 2023 was unconstitutional as the state lacks legislative competence to enact the law. He stated that the Bill received the assent of the Governor but it was not sent to the President for her approval. As such, the mandatory provisions of Article 288 of the Constitution had not been followed. Consequently, the Act lacked constitutional validity and was illegal and deserved to be set aside.

The petitioner stated that the state government had issued a notification on February 16, 2023, specifying the tariff of water cess on power generation. The Bill received the Governor’s assent on April 4. There was a provision in the Bill to establish a commission for collecting water cess on hydropower generation. The Act had come out of the blue and there had been no application of mind prior to its promulgation. — OC

Hydropower sector will be affected

Nanti Hydro Power Private Ltd, Shimla, contended in its petition that the levy of water cess would make hydropower projects commercially unviable and unsustainable, hampering the overall growth of the sector.