Alaknanda Hydro Power Co Ltd vs State Of Uttarakhand

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(UK) 141

IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Lok Pal Singh, J.
Alaknanda Hydro Power Co Ltd - Appellant
Versus
State Of Uttarakhand & Ors. - Respondent
Writ Petition No. 631 of 2017, 187 of 2016, 272 of 2016, 1500 of 2016, 2074 of 2016, 3084 of 2016, 123 of 2017, 641 of 2018, 2396 of 2019, 3603 of 2019, 279 of 2020
Decided On : 12-02-2021

Advocates Appeared:
V.K. Kohli, Advocate, Mohan Parasaran, Advocate, Gourab Banerji, Advocate, Arvind Vashistha, Advocate, D.S. Patni, Advocate, Divya Kant Lahoti, Advocate, Alok Mehra, Advocate, Shobhit Saharia, Advocate, Dinesh Dwivedi, Advocate, Abhishek Atrey, Advocate, Prateek Dwivedi, Advocate, Shivam Singh, Advocate, Anjali Bharwava, Advocate, P.C. Bisht, Advocate, Narain Dutt, Advocate, Aditya Singh, Advocate, Gopal K Verma, Advocate, Rajesh Sharma, Advocate, Sanjay Bhatt, Advocate, U.K. Uniyal, Advocate, Rajeev Srivastava, Advocate, Jitendra Chaudhary, Advocate, Rakesh Thapliyal, Advocate, Bina Pandey, Advocate

Headnote:(A) Constitution of India - Articles 200, 246, 248, 256, 288(2) - Uttarakhand Water Tax on Electricity Generation Act, 2012 - The petitioner companies challenge the constitutional validity of the Act on grounds including legislative competence, violating fundamental rights, and promissory estoppel from prior agreements. (Para 3)

(B) Legislative Competence - The State has the authority to legislate on usage charges of water for electricity generation under Entry 17 of List II, Seventh Schedule. Article 288 does not apply as the Act is not a tax on electricity but on water drawn for generation (Para 76).

(C) Fundamental Rights - The Act does not infringe Articles 14 and 19(1)(g) as it uniformly imposes a tax on the use of water, which does not violate constitutional rights. (Para 80)

(D) Promissory Estoppel - State government's prior agreements do not prevent the imposition of a tax on non-consumptive use of water as it is within legislative competence. (Para 87) (E) Final Decision - All writ petitions dismissed, upholding the validity of the Uttarakhand Water Tax on Electricity Generation Act, 2012. (Para 104)

Table of Content
1. challenges on the basis of constitutional validity (Para 3 , 4 , 7)
2. legislative competence and jurisdiction (Para 19 , 21)
3. doctrine of promissory estoppel in legislative context (Para 76 , 100)
4. court's dismissal of petitions affirming legislative authority (Para 101 , 104)

JUDGMENT

Lok Pal Singh, J. - Since identical issue of fact and law is involved in the aforementioned writ petitions, therefore, they are being decided by this common judgment for the sake of brevity and convenience.

2. Writ Petition no. 1500 (M/S) of 2016 shall be the leading case.

3. Petitioners in the present batch of petitions are power generating companies, engaged in production of electricity by utilizing the river water. The petitioner, Alaknanda Hydro Power Company Ltd. (AHPCL) seeks to assail the constitutional validity and vires of the UTTARAKHAND WATER TAX ON ELECTRICITY GENERATION ACT , 2012 (hereinafter referred to as 'the Act'), inter alia, on the following grounds:

(i) The enactment, promulgation and notification of the said Act being in violation of the provisions of Articles 200, 246, 248, 256, 285, 288(2) and 300A of the Constitution of India.

(ii) The enactment, promulgation and notification of the said Act being in violation of the provision of Entry 97 of List I of the Seventh Schedule of the Constitution of India.

(iii) The enactment, promulgation and notification of the said Act being in violation of the provisions of Entry 17 of List II of the Seventh Schedule of the Constitution of India.

(iv) The consideration of and the assent given for the enactment and the notification of the said Act being in violation of Article 200 and 288(2) of the Constitution of India having been accorded the consent by the Governor of the State of Uttarakhand, without obtaining the consent of the President of India.

(v) The fixation of the rates of water tax in terms of the provisions of Chapter 5 of the said Act by means of a notification issued by respondent no. 1 to 5 being in violation of Article 288(2) of the Constitution of India as that the said Act was promulgated without obtaining consent from the President of India, in violation of mandatory provisions under the Article 288(2) of the Constitution of India, wherein it is obligatory on part of the State Legislature, in case of fixation of any rates and other incidents of such tax by means of rules or orders to be made under the law by any authority, the law shall provide for the previous consent of the President being obtained to the making of any such rule or order. The rates of Water Tax having not received the previous consent of the President.

(vi) The enactment, promulgation and notification of the said Act imposing Water Tax violating the fundamental rights of the petitioner of carry on its trade and business under Article 19(1)(g) of the Constitution of India.

(vii) The enactment, promulgation and notification of the said Act, being arbitrary, manifesting arbitrariness in State action and being exercise of the colourable powers of the respondent State of Uttarakhand, thus violating the fundamental rights of the petitioner under Articles 14 and 19(1)(g) of the Constitution of India.

4. The genesis of the present controversy from where it arises is that in the year 1981, a Project named Srinagar Hydro Electric Project, having capacity of 330 MW was conceptualized by the then Govt. of U.P. The project development was entrusted to the Irrigation department of erstwhile Government of Uttar Pradesh and was planned to be developed with the World Bank funds. It is stated that due to inordinate delay caused by the Govt. of U.P. in developing the project, the World Bank withdrew the funding and due to paucity of funds, the Govt. of U.P. decided to entrust the Project to private parties for development. TATA Power Corporation Ltd. (TATA/TPCL) took over the Project development works, w

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2021 Supreme(UK) 141

Cases Referred (43)