Case Note & Summary
The dispute arose concerning the imposition of cess on the hydro power generating industry under the Water (Prevention and Control of Pollution) Cess Act, 1977. The Union of India appealed against the High Court's decision which had quashed the cess on the grounds that the amendment to Schedule I of the Act was not validly executed. The Act mandated that any industry causing pollution could be levied cess, but at the time of its enactment, the hydro power sector was not included in the specified industries. To impose cess, a notification was issued in 1993, but the respondents challenged its validity, arguing that the necessary parliamentary procedure for amending Schedule I was not followed. The High Court found that the required approval from Parliament was not sought after the notification was laid before it, which was a prerequisite for a valid amendment. The Supreme Court upheld the High Court's findings, emphasizing that mere laying of the notification was insufficient without subsequent parliamentary approval. The appeals were dismissed, affirming the High Court's ruling that the cess was not imposed in accordance with the law.
Headnote
A) Environmental Law - Levy of Cess - Validity of Cess on Hydro Power Industry - Water (Prevention and Control of Pollution) Cess Act, 1977, Section 16 - The court examined whether the hydro power generating industry could be subjected to cess under the Act, concluding that the necessary parliamentary approval for amending Schedule I was not obtained, thus rendering the levy invalid. Held that the High Court's decision to quash the cess was correct (Paras 1-10).
Issue of Consideration
Whether there can be a valid levy under the provisions of the Water (Prevention and Control of Pollution) Cess Act, 1977 on the hydro power generating industry?
Final Decision
The Supreme Court dismissed the appeals, affirming the High Court's decision that the cess was not imposed in accordance with law due to the lack of valid amendment to Schedule I.
Law Points
- Water (Prevention and Control of Pollution) Cess Act
- 1977
- amendment procedure
- parliamentary approval
- specified industry
- notification compliance
