Point of Law: Infrastructure Laws - Levy Cess/tax/fee from industrial houses for river water lifted by them for industrial purpose - As per Kerala Irrigation Water Conservation Act, 2003 and Rules framed in 2005 water cess has been specified for extracting of water for irrigation only - Hence same rate as applicable to water extracted for irrigation is made applicable for other purpose also - Article 265 of Constitution of India provides that no tax shall be levied or collected except by authority of law.

JUDGMENT :

In these writ petitions, the petitioners who are Companies running Industrial Units in Ernakulam and Kottayam Districts, challenge order GO (Rt.) No. 805/09/WRD of the Government of Kerala, Water Resources (MI) Department, dated 25.07.2009. By the said Government Order, the State of Kerala enhanced the fee for extraction of water from rivers.

2. In WP(C) No.4755/2013, the petitioner-Company states that the Company has permission granted by the Chief Engineer, Irrigation Department, to draw water 1000 TPD (Tons Per Day) from Chalakudy River. However, the Company is drawing only 300 M3 per day. The Executive Engineer required the petitioner to make a fresh application for extraction of water from the river in terms of the G.O. dated 25.07.2009.

3. The said G.O. marked as Ext.P5 in the writ petition reads as follows:-

GOVERNMENT OF KERALA

Abstract

Water Resources Department-Extraction of water from rivers/water bodies in Kerala for the purpose other than Drinking Domestic and irrigation-Levy of Water Cess/charges -Orders issued.

WATER RESOURCES (MI) DEPARTMENT

G.O.(Tt)No.805/09/WRD Dated Thiruvananthapuram 25.07.2009.

Read :- 1. No.I AU/W/III/2-1/68/2003-04/218 dated 1.8.2008 from the Accountant General (A), Kerala.

2. Lr.No.W3/General/25906/2008 dated 2.5.2009 from the Chief Engineer (I&A), Thiruvananthapuram.

ORDER

The Accountant General (Audit) Kerala while conducting the local audit of the office of the Executive Engineer, Irrigation Division Ernakulam for the period from 1.1.2002 to 31.7.2003 laid observed that there is revenue loss of Rs.77,000/- per day due to the non collection of water cess. The Chief Engineer (I&A) has reported that about 30 industrial concerns are unauthorisedly extracting water without permission and without remitting water charges. The Chief Environment Engineer, KSPCB Regional Office Ernakulam has also reported that 19 industrial concerns drawing from Periyar. As per the Kerala Irrigation Water Conservation Act, 2003 and Rules framed in 2005 the water cess has been specified for extracting of water for irrigation only. Hence the same rate as applicable to water extracted for irrigation is made applicable for other purpose also. But the collection of cess and action against unauthorized extraction of water for uses other than irrigation is handicapped by the absence of proper and specific provisions regarding the same in the Act & Rules. Hence a proposal for amendment of the said Act, 2003 for including the above provisions is under the active consideration of Government.

In this connection a meeting was held by the Additional Chief Secretary (Water Resources) on 3rd April 2009 with Chief Engineers, representatives of State Pollution Control Board and the Additional Secretary of Industries Department, in his chamber in Secretariat. In the meeting it is pointed out that the proposed amendment of the Irrigation and Water Conservation Act, 2003 would make specific provision to cover this lacuna. It is also decided not to wait till the amendment is made and to issue an executive order to address this loophole by making obligatory for industrial establishments to take permission for drawing water from rivers/water bodies of the Irrigation Department.

In the above circumstances as reported by the Chief Engineer (I&A) in her letter read above and as observed by the Accountant General (A) Kerala Government hereby insists the following terms and conditions for the extraction of water from courses.

(a) No person or agency shall extract water from a water course by installation of any mechanical or electrical device the capacity of which in the aggregate, is more than five horsepower or any hose, pipe or other similar device or by any other means except with the previous permission of the officer authorized by the Government in this behalf within whose jurisdiction such device for extraction of water is installed, provided that the Kerala Water Authority or any local authority shall not be liable to obtain a p