Jharkhand High Court
Hindustan Copper Ltd vs State Of Jharkhand on 28 June, 2024
Author: Gautam Kumar Choudhary
Bench: Gautam Kumar Choudhary
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W. P. (C) No. 1581 of 2010
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Hindustan Copper Ltd., Jamshedpur through its D.M. (Admn and Law) Krishna Lal Chakraborty .... .... .... Petitioner Versus
1. State of Jharkhand
2. Secretary, Department of Irrigation, Government of Jharkhand, Ranchi
3. Superintending Engineer, Baraj Circle, Subarnrekha Project, Irrigation Department, Jamshedpur
4. Executive Engineer, Subarnrekha Canal Division, Irrigation Department, Ghatshila .... .... .... Respondents With W. P. (C) No. 1915 of 2005 Tata Iron and Steel Company Limited, represented through R.H. Suryavanshi, having its registered office at Mumbai and works at Jamshedpur .... .... .... Petitioner Versus
1. State of Jharkhand through its Secretary, Department of Water Resources and Irrigation, Government of Jharkhand, Ranchi
2. Administrator, Subarnarekha Multipurpose Project, Subarnarekha Project Unit, Jamshedpur, Jharkhand
3. Superintendent Engineer, Dam Division, Chandil, Jhakhand
4. Executive Engineer, Subarnarekha Dam Division No.II, Chandil, Jharkhand .... .... .... Respondents With W. P. (C) No. 3427 of 2011 Steel Authority of India Limited through Deputy General Manager (WMD) SAIL (Law), P.S. Dwivedi .... .... .... Petitioner Versus
1. State of Jharkhand through the Chief Secretary, Government of Jharkhand, Ranchi
2. The Development Commissioner, Government of Jharkhand, Ranchi
3. The Chief Engineer, Water Resources Department, Government of Jharkhand, Ranchi
4. The Director (Revenue) cum Special Secretary, Water Resources Department, Government of Jharkhand, Ranchi
5. The Superintending Engineer, Tenughat Dam Circle, Tenughat, Bokaro
6. The Executive Engineer, Tenughat Dam Division, Tenughat, Bokaro .... .... .... Respondents With W. P. (C) No. 4544 of 2011 M/s Tata Steel Limited having its registered office at 24 Homi Mody Street, Mumbai and having its works at Jamshedpur through Smt. Meena Lall .... .... .... Petitioner Versus
1. The State of Jharkhand through its Principal Secretary, Department of Water Resources and Irrigation, Government of Jharkhand, Ranchi
2. The Special Secretary, Department of Water Resources and Irrigation, Government of Jharkhand, Ranchi
3. The Superintendent Engineer, Subarnrekha Dam Circle, Chandil and Subarnrekha Canal Circle, Jamshedpur
4. The Executive Engineer, Subarnrekha Dam Division No.02, Chandil, Seraikella Kharsawan, Jharkhand .... .... .... Respondents With 1 W. P. (C) No. 733 of 2012 Adhunik Power and Natural Resources Limited, through its Executive Director, Sri Amritanshu Prasad .... .... .... Petitioner Versus
1. State of Jharkhand through its Principal Secretary, Department of Water Resources, Government of Jharkhand, Ranchi
2. Engineer in Chief, Department of Water Resources, Government of Jharkhand, Ranchi
3. Chief Engineer, Swarnrekha Multipurpose Project, Chandil, Chandil, Seraikella Kharsawan
4. Superintending Engineer, Chandil Dam Circle, Chandil, Seraikella Kharsawan
5. Executive Engineer, Swarnrekha Dam Division No.02, Chandil, Seraikella Kharsawan .... .... .... Respondents With W. P. (C) No. 1193 of 2012 Adhunik Alloys and Power Limited, through its authorized representaive, Sri Amritanshu Prasad .... .... .... Petitioner Versus
1. State of Jharkhand through Principal Secretary, Department of Water Resources, Government of Jharkhand, Ranchi
2. Engineer in Chief, Department of Water Resources, Government of Jharkhand, Ranchi
3. Chief Engineer, Swarnrekha Multipurpose Project, Chandil, Seraikella Kharsawan
4. Superintending Engineer, Chandil Dam Circle, Chandil, Seraikella Kharsawan
5. Executive Engineer, Swarnrekha Dam Division No.02, Chandil, Seraikella Kharsawan .... .... .... Respondents With W. P. (C) No. 7439 of 2012 Kohinoor Steel Private Limited, having its unit at Bunlandih, Chandil through its Corporate Executive Anindya Sengupta .... .... .... Petitioner Versus
1. The State of Jharkhand
2. The Secretary, Water Resource, Government of Jharkhand, Ranchi
3. The Chief Engineer (P&M), Water Resource Department, Government of Jharkhand, Ranchi
4. The Chief Engineer, Subarnrekha Multipurpose Project, Chandil, Seraikella Kharsawan
5. The Superintending Engineer, Subarnrekha Dam Division No.II, Chandil, Seraikella Kharsawan
6. The Executive Engineer, Subarnrekha Dam Division No.II, Chandil, Seraikella Kharsawan .... .... .... Respondents With W. P. (C) No. 2330 of 2017 M/s Inland Power Limited having its unit at Gola through its Executive Admin Mr. Aninya Sengupta .... .... .... Petitioner Versus
1. The State of Jharkhand
2. The Secretary, Water Resource, Government of Jharkhand, Ranchi
3. The Chief Engineer (P&M), Water Resource Department, Government of Jharkhand, Ranchi .... .... .... Respondents 2 CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY For the Petitioners: Mr. Jitendra Singh, Sr. Advocate Mr. G.M. Mishra, Advocate Mr. Indrajit Sinha, Advocate Mr. Ajay Kumar Sah, Advocate Mr. Amit Kr. Das, Advocate Mr. Sahay Gaurav Piyush, Advocate Ms. Suchitra Pandey, Advocate Mr. Saket Upadhyay, Advocates Ms. Sweta Rani, Advocate Mr. Yash Singh, Advocate Mr. Sankalp Goswami, Advocate Mr. Ishan Singh, Advocate For the State : Mr. Rajiv Ranjan, Advocate General Ms. Aparajita Chatterjee, AC to AG Ms. Komal Tiwary, AC to AG Mr. Ashutosh Anand, AAG-III Ms. Rishi Bharti, AC to AAG-III Mr. Sahbaj Akhtar, AC to AAG-III Mr. Indranil Bhardwaj, SC-IV Mr. Jayant F. Toppo, GA-V Ms. Shilpi, AC to SC (Mines)-II
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CAV ON : 06.05.2024 PRONOUNCED ON:28.06.2024
Since the matters involve common question of law regarding
enhancement/imposition of water rent/cess by the State Authorities-respondents, therefore, they are being heard together and will be disposed of by this common order.
W.P. (C) No. 1581 of 20101. Petitioner-Company, Hindustan Copper Ltd. is involved in mining activity for which 542.72 acres of land at Rakha Mines and 437.09 acres of land at Musabani had been acquired. This company was previously known as Indian Copper Corporation, but was taken over by the Central Government under (Acquisition of Undertakings) Act, 1972 and had been granted mining lease for copper. Since 1928 onwards, the Company claims to be utilizing the uninterrupted flow of water from Subernrekha river.
2. This writ petition is for quashing the letter No.1041 dated 19.11.2009 issued by the Executive Engineer, Subarnrekha Canal Division, Ghatsila-- Respondent No.4 whereby a demand of Rs. 7,05,83,363/- has been raised as water cess under Section 62 of the Bihar Irrigation Act, 1997 by way of the notification.
3. Some argument made in this case are common to argument raised on behalf of other petitioners. It is argued by the Senior counsel Sri Jitendar Singh that the 3 charge for water can be levied under Section 62 of the Bihar Irrigation Act, 1997 only when water is supplied for the purpose of irrigation, municipal supply, industrial or commercial purposes from any irrigation work belonging to or constructed by or on behalf of the State Government.
4. It is contended that water drawn by the Company is from free flowing river and not from any irrigation work, so as to make it amenable to water cess imposed by the State. Chandil Dam constructed under the Subernrekha Multi Purpose Project is more than 70.00 Km from the township where the Hiundustan Copper Ltd is situate. The said dam does not in any manner help the petitioner in use of water nor the petitioner gets any supply of water from the said dam, therefore the water cess being levied is not supported by mandate of law. Water is being consumed from Subarnrekha river and there has not been any construction made by the State Government so as to come within the meaning of Section 62.
5. Water cess could not have been levied dehors the procedure as laid down under Bihar Irrigation Act, 1997. In order to bring part of Subarnrekha river within the meaning of "irrigation work" and raise water charge under Section 62 of the Bihar Irrigation Act, 1997, it was incumbent on the part of the State of Jharkhand to notify the part of river Subarnrekha under Section 2(o)(iv) of the Act. In the absence of such a notification water cess cannot be imposed. Specific mandate in (2018) 12 SCC 107 is that without any legislative authority, the State Government was not empowered to levy water cess in view of the ratio laid down. Once a procedure to do a thing in a particular manner is prescribed in an Act, it cannot be done otherwise.
6. Further case is that the quantum of water which is being consumed has been assessed is on mere conjecture. There is no scientific para-meter to show that 23,98,315.919 per thousand Gallons water was consumed by the petitioner in the years 2009-2010.
7. It is argued by learned counsel on behalf of petitioner(s) that Government is entitled to levy separate charge of water under Section 62 of the Bihar Irrigation Act, 1997, when it is supplied from any irrigation work belonging to constructed by or on behalf of State Government. Section 2(O) of the Bihar Irrigation Act, defines "Irrigation Work" to include only such part of river, stream, lake or natural collection of water or natural drainage or ground water to which the State Government has applied the provisions of the Act. In the absence of express notification of the State Government applying the provisions of the Act to any part of river or stream, it cannot be included within the definition of (Irrigation Work) and consequently it cannot be charged under Section 62 of the Act.
48. Section 12(1) of the Act also expressly requires that whenever it is expedient to the State Government that water of any river or stream flowing in natural channel or any lake or any other natural collection of still water or ground water is received from any irrigation work, then the State Government is required to make a notification in this regard.
9. It is further contended that as per Para-26 of the supplementary counter- affidavit filed on 08.04.2024, list of the industries being supplied water through Chandil Dam, upstream of Galudih Barrage has been given which are being supplied water. This list does not contain the name of the petitioner of W.P.(C) No.1581 of 2010.
10. It is argued that the word "may" appearing in Section 115 (1) of the Act, 1997 has mandatory force. It has been held in AIR 1965 SC 895 and followed in 2008 (12) SCC 372 that the use of word "may" or "shall" is not determinative as to its nature whether it is directory or mandatory. At times, the Legislature, uses the word "may" as a matter of pure conventional courtesy and yet intends a mandatory force to understand a legal import of a word, the Court has to consider various factors mainly, the object and scheme of the Act, the context and the background against which the words have been used, the purposes thereof etc.
11. Requirement of notification under Section 12(1) of the Act, 1997 is mandatory in view of the ratio laid down by the Apex Court in 2007 (5) SCC 85 Paras 16, 25 and 32.
WP (C) Nos. 4544/2011, 733/2012, 3437/2011,1193/2012, 2330/2017 and 7439/12
12. All these writ petitions are directed against notification no.2/PMC/ Jalapurti-175/2007-272 & 275 dated 01.04.2011 issued under the signature of the Special Secretary, Department of Water Resources, Government of Jharkhand whereby water rates for different users have been revised with effect from 01.04.2011, and further for quashing the bills raised towards water charges in pursuant to the revised rates by this notification. The revised water rates prescribed by the impugned notification dated 01.04.2011 is at the rate of ₹ 26.40 per thousand gallons.
13. The petitioner-TISCO filed writ application numbered as CWJC no.3819 of 1993(R) Ranchi bench of the Patna High Court questioning the right of the Government to levy and demand water charges for drawal of water from Subarnrekha river. The said writ application was disposed of on contest by Judgment dated 20.08.2004. It was held that rate of Rs.3/- per thousand gallons for industrial purposes was justified. The Court directed the State Govt., "to recalculate the amount 5 to be demanded on the quantum of water used for non-industrial purposes and for industrial purposes at different rates as indicated above".
14. Petitioner in W.P.C No.4544 of 2011 paid under protest a sum of Rs.2,05,87,500/- for the bills of the months of April, 2011 and May, 2011 against the bill dated 01.06.2011. The order passed by the High Court was assailed before the Hon'ble Supreme Court principally on the ground that the demand had been raised without any authority of law. Hon'ble Supreme Court remitted the matter to the High Court with a direction to examine whether the demand was raised under authority of local law.
W.P.(C) No. 3427/201115. It has been specifically pleaded on behalf of the Petitioner-Steel Authority of India Ltd. In W.P.(C) No. 3427/2011, the status of this Company is different and distinct with respect to other consumer or industrial consumer in view of agreement entered into by the State in 1979 and revised agreement of 2009-2010.
16. The petitioner is a corporate body earlier known as Bokaro Steel Limited which stood dissolved in the year 1978 and it became subsidiary of the Steel Authority of India Limited. Land, in question was acquired for construction of Steel Plant and the Steel Plant was set up along with the residential premises for its employees and other civic amenities including Hospitals, schools, etc. funded by the petitioner-company.
17. Vide Letter No.20-2-D dated 15.01.1955, the State of Bihar through its Secretary, Development (Industries) Department offered the concessions which included a written assurance given by Damodar Valley Corporation (DVC) to the State Government that 100 Cusec of water per day will be made available for the location of Steel Plant. Acting on the assurance, the Steel Plant was set up and it was made operational sometime in the year 1972.
18. Tenughat Dam has been constructed by the Government of Bihar and is nearest water reservoir suited to the needs of Bokaro Steel Plant.
19. As per the Minutes of the meeting dated 10.11.1972 amongst Government of Bihar, Department of Steel, Government of India, Ministry of Finance, Ministry of Irrigation and Power, Bokaro Steel Limited, it was decided that Tenughat, Bokaro Canal belonged to the Bokaro Steel Limited, but was transferred to the State Government as the Tenughat dam was also owned by it. It was however agreed that the said canal will be maintained by the Bokaro Steel Limited. Tenughat dam was constructed in three stages, out of which, Stage-II and IIII were financed by the Government of India. It was inter alia decided in the said meeting that the rate charge 6 for water be reduced from 39 Paise /1000 gallons to 18 Paise /1000 gallons.
20. In pursuant to the above discussions, an agreement was entered on 09.07.1979 between the petitioner and the State of Bihar, in which the Government agreed to supply to the petitioner-company a maximum quantity of 200 Cusecs of water.
W.P. (C) No. 1915 of 200521. This writ petition is filed to quash the water bills raised for the period July, 1998 to till date of filing of the writ petition that is January, 2005.
a. Bihar Irrigation Act became effective from 6th July, 1998 under which demands have been raised from the petitioner for drawing water from the river Subernrekha for domestic and industrial purposes. b. Whether levy of charges for water drawn, other than for irrigation work can be justified under the provisions of Bihar Irrigation Act,1997 particularly under Section 62 that too without framing appropriate Rules and without making the assessment of water charges pursuant to provisions of Section 63 of the said Act.
22. With regard to the plea raised in W.P.(C) No.1915 of 2005 and W.P.(C) No.4544 of 2011, it is argued that Respondents-State hinges on the following grounds :-
(a) Petitioner has accepted the water bills and entered into an agreement for Nowamundi Iron Mines. One of the subsidiary companies of the petitioner, Tata Steel Long Products Limited had also entered upon the agreement and agrees to the water rates.
(b) Petitioner had admitted to its liability to make payment after having admitted the same and hence, is estopped to raise any question of validity to the notification;
(c) The petitioner has accepted the revised water rates effective from 01.04.2011 and hence, it cannot challenge the validity of impugned notification.
23. It is argued by learned counsel Mr. Indrajit Sinha that there cannot be any estoppel against the law and it cannot amount to waiver of the rights of the petitioner to challenge the validity of impugned notification. Reliance is placed on 2019 (20) SCC 17, 2022 (8) SCC 713.
24. The object of Irrigation Act is set out in its long title which reads as under
:-
"An act to provide for and consolidate the law relating to irrigation embankment drainage, levy and assessment of 7 waterways, better contribution and matters related therewith. The Irrigation Act covers the field for levy and assessment of waterways which is in the nature of "impost".
It has been held by the Apex Court in TISCO vs. State of Bihar and Ors., 2018 (12) SCC 107 that "charging of water rates even it falls within realm of a fee, also requires to be imposed and recover under an authority of law as per Article 265 of the Constitution of India."
25. In fiscal Statutes, the compliances of procedure needs to be very strictly followed and things must be done in the manner in which the same is prescribed to be carried out. It has been held in Municipal Council, Khurai & Others Versus Kamal Kumar and Others, AIR 1965 SC 1321, that under Article 265 of the Constitution of India, no tax shall be levied or collected except by authority of law. This clearly implies that the liability to pay a tax has to be strictly complied with. Where it is not so complied with, the liability to pay the tax cannot be said to be according to law.
26. From plain reading of Section 62 of the Irrigation Act, the significant features - "Irrigation Work", "Such Work" "Prescribe", "purposes of supply", and the "different factors" which are to be considered while prescribing the water rates. On a plain reading, it is clear that water rates ought to be levied only when water is drawn from an Irrigation Work.
27. The petitioner draws water from the River, Subarnrekha which is at a distance of about 30 Kilometeres from the reservoir. Petitioner cannot thus be said to be drawing water from the reservoir. As stated above, a natural collection of water such as a river or stream could also form an irrigation work subject to the requirements stated in the term defining an Irrigation Work. The relevant part of Section 2(o) which relates to a natural collection of water reads as under :
Any part of a river, stream, lake or natural collection of water or natural drainage and groundwater to which the State Government has applied the provisions of this Act;
28. It is therefore, mandatory that before the provisions of the Act are applied to a natural collection of water, there should be a notification in terms of Section 12(1) of the Act, 1997. The State Government in its supplementary counter affidavit dated 09.04.2024 filed pursuant to the order dated 14.03.2024 in W.P.(C) No.4544 of 2011 has not stated that a notification has been made under Section 12(1) of the Act. Without such a notification, a river cannot be legally considered to be an "Irrigation Work" and so the demand cannot be raised in terms of Section 62 of the Act.
829. Section 62 of the Irrigation Act uses the term "prescribed", while prescribed is defined term in the Act. The State Government has contended that since the term used in Section 62 is "prescribed" and not "prescribe", there is no requirement to lay down the water rates by way of rule. It is submitted in this regard by the learned counsel on behalf of the petitioner that in the case of Consumer Online Foundation Versus Union of India, 2011 (5) SCC 360 has held that without framing of rules, no amount of charges can be collected, when the Statute uses the term prescribed. Furthermore, Section 115 of the Act lays down the procedure and necessity of framing of rule under the Act. Section 115(1) of the Act reads as follows :-
The State Government may be Notification in Official Gazette make Rules to carry out the purposes of this Act or for matters connected therewith or which are required to be prescribed by Rules under provisions of this Act.
30. Besides Section 62 of the Act, the other provisions contained in Section Chapter XI use the term 'prescribed'. In this regard, reference may be made to the provisions of Sections 64, 65, & 66 of the Irrigation Act. These provisions are important for the implementation of the provisions of the Act and also require to be implemented by Rules, since they use the term 'prescribed.' In fact, if Rules are not framed for the purposes of implementation of Sections 64, 65 & 66 of the Irrigation Act, the entire scheme of Irrigation Act is bound to fail.
31. Further, such an impost cannot be imposed by the State Government in its exercise of administrative power which will be in the teeth of the judgment in the State of Sikkim vs. Dorjee Tshering Bhutia, (1991) 4 SCC 243 whereby and whereunder the Hon'ble Supreme Court has held that :
"15. The executive power of the State cannot be exercised in the field which is already occupied by the laws made by the legislature. It is settled law that any order, instruction, direction or notification issued in exercise of the executive power of the State which is contrary to any statutory provisions, is without jurisdiction and is a nullity."
32. The impugned notification is also bad in law for want of prior publication. It has been held in Raza Buland Sugar Co. Versus Municipal Board, AIR 1965, SC 895, para 9 that a taxpayer must not be prejudiced for want of an opportunity of hearing which is created under the statutory provisions and held the significant importance of prior publication in the following para 10:
"The object of providing for publication of proposals and draft rules is to invite objections from the inhabitants of the municipality, who have to pay the tax. The purpose of such 9 publication obviously is to further the democratic process and to provide a reasonable opportunity of being heard to those who are likely to be affected by the tax before imposing it on them. It is true that finally it is the Board itself which settles the proposals with respect to taxation and submits them to Government or the prescribed authority, as the case may be, for approval. Even so we have no doubt that the object behind this publication is to find out the reaction of tax payers generally to the taxation proposals, and it may very well be in a particular case that the Board may drop the proposals altogether and may not proceed further with them, if the reaction of the taxpayers in general is of disapprobation. Further the purpose served by the publication of the proposals being to invite objections, in particular from the taxpayers to the tax proposed to be levied on them, the legislature in its wisdom thought that compliance with this part of Section 131(3) would essentially carry out that purpose. In the circumstances if we are to hold that this part of Section 131(3) was merely directory, the whole purpose of the very elaborate procedure provided in Sections 131 to 135 for the imposition of tax would become meaningless, for the main basis of that procedure is the consideration of objections of taxpayers on the proposals of the Board. If such publication is merely directory, the Board can proceed to levy the tax without complying with them and that would make the entire elaborate procedure provided in the Act before a tax is imposed, nugatory. We are therefore of opinion that this part of Section 131(3) is mandatory and it is necessary to comply with it strictly before any tax can be imposed."
33. The notification dated 09.05.2000 which is the subject matter of WPC No. 1915 of 2005 tagged with WPC No. 4544 of 2011 does not comply with the provisions of Article 265 of the Constitution and hence, the same is wholly unconstitutional. At the time of filing of WPC No. 1915 of 2005, the notification dated 09.05.2000 was not available with the petitioner and hence the same could not be challenged. However, the same is known to the petitioner and the same is questionable on similar grounds of challenge to the Impugned Notification, besides the illegality of the same not having been published at all in the official gazette. The non-publication of the notification dated 09.05.2000 in the official gazette denudes the same of having any force of law in view of the judgment of the Apex Court in Gulf Goans Hotels Company Ltd. Vs Union of India; (2014) 10 SCC 673 wherein it was, inter alia, held that the prior publication of any statutory law is essential and such publication must be made in the official gazette, unless a different intention appears from the statutory provisions. Hon'ble Supreme Court has held in the case of Ahuja Industries Vs State of Karnataka Ahuja Industries Vs State of Karnataka; (2003) 5 SCC 365 , that if a notification is required to be published in the gazette, it will only come into force on the date of its publication in the gazette and not earlier. Thus, nonpublication of the notification dated 09.05.2000 in the official gazette 10 renders the same unenforceable and thus a constitutional court will not enforce it even though it has not been challenged.
34. That even though the respondents were obliged under Section 62 of Bihar Irrigation Act, 1997 to differentially charge water rates for industrial and municipal consumption but they continued to impose uniform rates on the petitioner even in spite of the judgment dated 20.08.2004 passed by the Hon'ble High Court of Jharkhand in CWJC No. 3819 of 1993(R). From the period 06.07.1998 to 31.03.2011, the respondents continued to charge the petitioner @ Rs. 4.50 per thousand gallons, however it is imperative that the respondent must also apply differential rates for the said period.
35. The respondent vide impugned notification dated 01.04.2011, prescribed tariffs for water drawn/supplied from natural water source, reservoir, canals to various categories mentioned in the said notification which includes:-
a. Industrial (including municipal supply) b. Supply of water for cold drinks, beverages.
c. Supply of water for drinking, sanitation, municipal corporation etc.
36. Petitioner was charged uniformly @ Rs. 26.40 per thousand gallon which is the rate of water for industrial category including municipal supply. It is submitted that the subject to the validity of the impugned notification, the petitioner could only be liable to pay @ Rs. 9.10 per thousand gallons for the industrial consumption, which is applicable for the rates for industrial supply from the river (natural collection) source. Further, the Petitioner could only be liable for payment @ Rs.7.90 per thousand gallons for municipal consumption, which shall be in compliance of the mandate of Section 62 of the Bihar Irrigation Act, 1997.
37. The Petitioner's obligation to supply water for municipal purposes in the town of Jamshedpur is well documented in the Lease Deed executed with the State Government. It is thus essential that respondent should apply the differential tariff rates for industrial and municipal consumption of water by the petitioner.
38. The State Government has framed uniform rates across the State of Jharkhand while framing the rates of water charges for the state of Jharkhand which is also contrary to Section 62 of the Irrigation Act. It was mandatory for the State Government to consider the different aspects, namely determination of rates which may differ in respect of water supplied, made available or used having regard to the costs of operation and maintenance of irrigation or drainage work. Instead of the water rates being worked out in accordance with the statutory mandate of the Section 62 of the Act, the State Government considered the rates of other States, is complete 11 non application of the mind and being contrary to the statutory mandate of the Irrigation Act. Such non- compliance is yet another instance of violation of statutory provisions by the State Government in determining the rates of water. It is clear that the State Government has abdicated its responsibility under the statute while framing the rates in howsoever manner it liked, thus making the same illegal and liable to be struck down.
39. Mr. Indrajit Sinha, learned counsel, has placed reliance on the following authorities:
(i) Orient Papers and Industries Ltd. v. Tahsildar-cum-Irrigation Officer, (1998) 7 SCC 303 at page 309 "14. Irrigation work is defined under Section 4(d) of the Act as to include all land occupied by the Government for the purpose of reservoir, tanks, etc., and other structures occupied by or on behalf of the State Government on such land. A reservoir cannot be understood merely to be a means to hold water in a stream. It is only by controlling the flowing stream in an area that water can be stored in a reservoir.
Viewed thus, irrigation work would include land used for such purpose. In this case the finding recorded by the authorities is in accord with this view. "Reservoir" may not necessarily mean only the constructed part of the land but includes the area where the water is held by a dam constructed by the Government; then if from such a point falling within that area water is drawn it must be held that the appellant is liable to pay the water rate."
i. 1964 SCC Online SC 37 para 9 ii. 1961 SCC Online SC 34 para 16 iii. 1964 SCC Online SC 119 para 10 iv. (2018) 12 SCC 107 para 32 CASE OF THE STATE 40. Pleading of the State is as under:-
A. Notification no.175/2007 dated 01.04.2011 has been issued pursuant to a conscious decision taken by State Cabinet by virtue of power conferred under Article 162 read with Article 166 of the Constitution of India. B. Water is being used by the Petitioner for their industries and they are making huge profit.
C. The rate of Municipal and Industrial Water tariff was fixed at the rate of Rs. 4.50 only per thousand gallon of water by Government of Bihar and made it effective from 01.04.1998 through resolution was issued on 09.05.2000. D. Even after a lapse of more than 12 years since the last revision was made by the Government of Bihar, the same water tariff rate was prevailing in 12 Jharkhand ever since its creation on 15.11.2000.
E. The State Government supplies water to the petitioner company from downstream of Chandil dam reservoir built across Subernrekha River. F. Petitioner Company in view of the stay order on 10.10.2011, was enjoying continuous supply of water at meagre payment of Rupees One Crore per month only, and supplying it to various other companies without previous approval of the Government. This admitted fact is evident from letter dated 13.06.2019 issued by the Chief Corporate Administrator, Tata Steel Ltd, mentioning therein the details of water supplied to other industrial consumers in different financial year since 2012 mentioned at Clause 6 of the said letter (Annexure A to the counter affidavit dated 21.02.2022). Further, as per Clause 7 of the same, the details of billing and collection from Non-TSL consumers for the period 2012 to 2019 (Rs. in Cr.) is mentioned. As per the detail it is evident that in terms of annual billing raised by the Petitioner Company for the Period 2012 to 2019 is Rs 462.51 crore. Whereas the total payment made by the petitioner company to the respondent state during this period towards monthly bill was Rs 316 Crore. G. There is a wide gap between the rate charged by the water resources department in terms of notification dated 01.04.2011 and the rate charged by the Tata steel limited from non-TSL consumers mentioned under clause 7 of the letter dated 13.06.2019. The average rate charged by the petitioner company for supply of water to its Non-TSL consumer is of Rs 87.201 per thousand gallon, whereas the demand raised by the petitioner company is at the average rate of Rs 34.468.
41. It is argued by the learned Advocate General that water of a flowing river is an asset of the State, and Govt. in public interest is entitled to regulate the use of such water. State has incurred huge expenditure in impounding water by constructing Dams and has also made arrangement for distribution of water among industrial undertaking and citizens.
42. Entry 56 of list 1 of the seventh schedule of the Constitution of India provides for regulation and development of inter-state rivers to the extent it is declared by parliament by law to be expedient in public interest.
43. Subarnarekha Multipurpose Project caters to the requirement of three States and part of the interstate project, the State of Jharkhand has control over the water allocated to the State from the project and in respect of that water, the State being competent to enact laws in terms of Entry 17 list 11 of the Seventh Schedule enacted Bihar Irrigation Act, 1997 and the State of Jharkhand adopted the same.
13Section 62 of the said Act deals in the matter of use of river water for industrial undertaking and municipal supply.
44. Water is being supplied to several Industrial Undertaking viz TISCO Ltd. Usha Martin, Adhunik under agreement with the Water Resource Department for payment of water taxes.
45. Sections 63 to 65 of the Bihar Irrigation Act, 1997, provides that an application is to be made to the canal officer for supply of the water to be used for purposes other than irrigation work.
46. Process for the water tariff notification by the water resources department of Jharkhand is based on data by a comprehensive comparative study across several states, along with Wholesale Price Index.
47. Chandil dam is positioned approximately 80 Km from HCL Company, the Chandil Dam's significance extends beyond seasonal water storage; during non- monsoon or lean periods, water released from this dam supports not only the petitioner, but also other industries and townships along Subernrekha River.
48. Galudi Barrage is situated in Ghatsila, 7 km upstream from the petitioner company (HCL) on the Subernrekha River, plays a crucial role in the region water supply. This underscores the direct benefit and dependency of the company on the infrastructure managed by the WRD, Jharkhand.
49. Section 62 read with Section 115 of the Bihar Irrigation Act, 1997, there is no mandatory requirement of making rule to charge water cess. Section 64 uses the word "prescribed" which is different from the word used in Section 2 (X) that is "prescribed". The meaning of word 'prescribe' has to be interpreted literally and it does not mean prescribed by rules. Therefore, the want of prior publication of (draft rules), under Section 115 does not apply in this case.
50. Water is a critical raw material for various industries, underpinning the need for a dynamic pricing model.
51. There is increasing operational costs in maintaining water infrastructure, including reservoirs, dams, canals and water related facilities. It includes construction and maintenance of water infrastructure, including reservoirs, dams, canals and related facilities.
52. There is difference between controlled flow Vs. Run of River: The technical distinction between water supplied as a "controlled flow" from the Chandil Dam and the concept "Run of River" extraction is critical. The controlled release of water from the dam ensures a reliable and regulated water supply for the downstream users, including industries in other States (Orissa and West Bengal).
14This controlled management and distribution mechanism further justifies the imposition of a revised tariff rate, reflecting the value of the assured supply and operational complexities involved.
53. Currently an assured flow of 13.0 cumecs (cubic) meter per second is released from Chandil Dam into Subarnarekha River. This release is carefully managed to balance environmental and other needs. Of this release, approximately 6.0 cumecs is dedicated for industrial usage and drinking water supply. The remaining 7.0 cumecs is dedicated to environmental flow, a practice that ensures the reverse ecological health and maintains biodiversity.
54. It is argued that Section 115 of the Act, vests power in the State Government to make rules to carry out the purposes of this Act in no way is mandating the promulgation of rules for prescription of water rates to be levied. Section 62 read with Section 115 of the Act, does not mandate the publication of draft rules for prescription of water rates. The proviso of Clause (b) of Sub-Section 1 of Section 62 uses the word prescribe. It states that the State Government may prescribe water rates for levy. The Section does not contemplate any draft rules for such prescription. In absence of any ambiguity in the provision the words must be given literal interpretation in order to give effect to the legislative intent of the provision.
55. Existing agreements for payment of water charges as per the revised rates:
A. Three notifications have been issued under Section 62 of the Act, since 2000, namely on 09.05.2000, 01.04.2011 and 17.01.2023. None of the Petitioners have challenged 2000 and 2023 notifications and have been making payments for the same. All petitioners have been making payments as per the 2011 notification as well.
B. Page 69 of the supplementary counter affidavit dated 09.04.2024 filed in W.P.(C) 4544 of 2011, Tata Steel has issued a letter dated 26.05.2023 wherein they have acceded to make payments as per 2023 notifications dated 17.01.2023.
C. Page 72 of the supplementary counter affidavit filed in W.P.(C) 4544 of 2011, contains letter of intent by Adhunik Power and Natural Resources Limited dated 05.03.2024 whereby and where under the Petitioner Company has shown intent to enter into an agreement with the Government for drawal of water as per 2023 revised rates. The Petitioner Company also admits in the said letter, that they have been making payments towards the water charges as per 2023 notification.
15D. Page 98 of the supplementary counter-affidavit filed in W.P.(C) 4544 of 2011, contains an agreement between Usha Alloys and Tata Steel and the Govt. of Jharkhand dated 15.07.2013. Clause (2) of the said agreement shows that the Petitioner Company has been paying water charges as per 2011 notification. E. Page 107 of supplementary counter affidavit, filed in W.P.(C) 4544 of 2011, contains an agreement between the Usha Martin Limited and Government of Jharkhand dated 04.02.2017. Clause (2) of the said agreement shows that the Petitioner Company has been paying water charges as per 2011 notification.
FINDING
56. At the outset it may be noted that in the present batch of writ petitions, question of absence of legislative support cannot be accepted, as all these cases relate to water cess charged after coming into force of Bihar Irrigation Act, 1997. The 1997 Act specifically provides under Section 3 that all rights in water of any river, natural stream etc. shall vest in the State Government, subject to the provision of Article 262 and Entry 56 of list I of the Seventh Schedule of Constitution of India. It further provides that no rights shall be acquired against the Government under the provision of Indian Easements Act, 1882 in the water of any river, channel etc. Further, Section 4 provides every irrigation work to vest in the Government. A bare reading of Section 62 will show that Govt. has been empowered to levy charges for water supplied from any irrigation work belonging to or constructed by the State Government. Section 62 reads as under:
"62.Charges for Water. --Whenever--
(a) water is supplied, made available or used for purposes of irrigation, municipal supply, industrial or commercial purposes from any irrigation work belonging to or constructed by, or on behalf of the State Government; and
(b) water from any such work, by direct flow or percolation or by indirect flow, percolation or drainage from or through adjoining land, irrigate any land under cultivation or flows into a reservoir and there-after by direct flow or percolation or by indirect flow, percolation or drainage from or through adjoining land irrigates any land under cultivation and, in the opinion of the Divisional Canal Officer such irrigation is beneficial to crops on such land:
the Government shall be entitled to levy a separate charge for such water hereinafter referred to as water rate and the Government may prescribe the rates at which such water rates shall be levied, which may be-
(i) different in respect of water supplied, made available or used having regard to the costs of operation and maintenance or irrigation or drainage work;
(ii) different in respect of water supplied made available or used 16 for different purposes;
(iii) different in respect of water supplied, made available or used for irrigation or any land with reference to the crop or crops grown or which may be grown on such lands;
(iv) different in respect of the quantity and timeliness of supply of water or the number of watering."
57. Therefore, impugned notification by which water charge has been increased by the State, or has been brought within the net of water charge, does not suffer from want of legislative support. Fact of TISCO Ltd. v. State of Bihar, (2018) 12 SCC 107 was somewhat different as the challenge was to a demand notice dated 30-9-1993 i.e before coming into force of the 1997 Act, calling upon TISCO to pay an amount of Rs 31.351 millions towards bill of water drawn from the river. [ "As per the direction given by Water Resources Department. It was for this reason that Hon'ble Supreme Court remitted back the matter to the High Court to examine the following two questions:
A. Whether the impugned demand is a tax or a fee or a liability arising under a contract? and, whether the prohibition contained in Article 265 is confined only to levy and collection of tax or it would also extend to levy or collection of a fee?
B. Though the High Court made references to the Bihar Irrigation Act, 1876, it did not record any conclusion whether the said Act provides the necessary statutory authority for the levy and collection of the impugned demands.
58. In the present case, challenge to the notification raising water charges, is to be tested for alleged non-observation of the mandatory statutory provision of the 1997 Act and not for the absence of any such legislative authority.
59. All these writ petitions have been filed on behalf of industries against water charges being increased by notification dated 01.04.2011, except W.P.(C) 1581 of 2010 which has been filed against demand being raised for the period before the notification, and W.P.(C) No.1915 of 2005 which is for the demand raised for the period 1998 to 2005.
60. W.P.(C) No.1581 of 2010 differs from other writ petitions as the Petitioner Company is aggrieved by the letter dated 19.11.2009 by which a demand of Rs.7,05,83,363 has been raised as water cess, whereas in other writ petitions (except W.P.(C) No.1915 of 2005) challenge is to the notification of the Government dated 01.04.2011, by which water rates were revised and increased to Rs. 26.40/- per thousand gallon. In Writ Petition being W.P.(C) No.1915 of 2005, challenge is to the water bills for the period from July, 1998 till January, 2005.
61. Questions that has been raised in these writ petitions can be summed up as 17 under.
A. Is the impugned demand on the basis of notification in accordance with the provisions of Section 62 of the Act?
B. Can water cess be imposed without framing of rules and its prior publication o, as required under Section 115 (2) of the said Act ? C. Has the State Government followed the provisions as laid down under sub- section (i), (ii) and (iv) of Section 62 of the Act for differentially imposing rates.
D. Is the notification under Section 12 (1) of the Act an imperative necessity before demand for the water supplied being raised?
62. The first contention of the petitioners is that in order to charge water for water drawn from the river under Section 62, it is to come within the definition of "irrigation work" and for this prior a notification under Section 2 (o)(iv) r/w Section 12 of the Act is a mandatory requirement.
63. In view of the contentions raised, in order to ascertain the factual position, respondent-State was directed vide order of this Court dated 14.03.2024 to submit by way of counter affidavit whether resolution of the Government dated 05.05.2000 of increasing the rate of water was published in the official Gazette or not. Further, it was also directed to bring on record whether there had been prior publication in the official Gazette under Section 115(2) of the Bihar Irrigation Act, 1997 with respect to notification dated 01.04.2011 and 05.05.2000 and also whether any notification with respect to river Damodar and Swarnarekha had been published in official Gazette in terms of Section 12 of Bihar Irrigation Act, 1997.
64. State in reply, vide supplementary counter-affidavit dated 08.04.2024 stated the following:
A. In the resolution by the WRD, Bihar Government, dated 09.05.2000, for the water tariff of Rs 4.50/- per thousand gallons, a copy of the resolution was sent to the Superintendent, Secretariat Printing Press, Gulzarbag Patna with instructions to "publish the resolution in the extra ordinary Gazette and to provide 200 copies of the same to the Department" copy of which has been annexed. Comprehensive efforts are underway to locate any publications of the Gazette, with respect to the water tariff rates especially concerning the notification dated 09.05.2000 or prior.
B. The rate (Rs. 4.50 per thousand gallons) was revised and acknowledged in the Gazette via letter no. 272 dated 01.04.2011 by Jharkhand Government and 18 the rate was also revised vide resolution no.189 dated 03.10.2016, by the Bihar Government.
C. From time to time intimation regarding water tariff rates has been given to the Petitioner companies. HCL, Ghatsila has been intimated vide letter no. 129 dated 17.02.2001 of Executive Engineer, Ghatshila and water bill has been sent to the Company in which the rate @ 4.50 per thousand gallon has been mentioned. Rate of Rs. 4.50 is acknowledged by other companies including the petitioner companies without any protest.
D. Tata Steel Ltd. has started making payment to the Department with reference to updated water tariff notification of 2023 (Letter No.30 dated 17.01.2023). Tata Steel Limited, Jamshedpur had made an online application no.268 to the water resource department for allocation of 140.86 MCM/annum of water. Similar interest were shown by other companies like Adhunik Power and Natural Resources.
E. In term of Section 57 of the Bihar Irrigation Act, 1997. application has been made to the Canal Officer for supply of water to be used for purpose other than irrigation work.
F. Provisions mentioned under Sections 63 to 65 of the Act, has been complied and the assessment of the water charges is regularly done and demand notice for the water bills were also regularly raised. G. The Chandil Dam and Galudih Barrage form a consolidated irrigation work under the WRD, Govt. of Jharkhand, representing a critical component of the Swarnrekha multipurpose project. The Galudih Barrage is situated near Galudih, Ghatsila, and approximately 70 Km downstream of Chandil Dam. This integrated system is designed for water level management, ensuring a controlled and steady flow of water to meet various needs. Its construction was made to provide assured water supply for sustaining industrial, agricultural and domestic needs across the region. Galudih is fed from controlled flow from Subernrekha and Kharkhai river. This water is made available to HCL.
65. From the above counter-affidavit the stand of the Petitioners is vindicated to the extent that there had been no notification under Section 12 of the Act, declaring a part of river as an irrigation work, and that the rules were not framed under Section 115 of the Act.
66. Question naturally arises whether in the absence of said notification under Section 12 and rule to be framed under Section 115 of the Act, the demand raised by the State is sustainable?
19Whether the Petitioners have been charged as per the procedure laid down in Section 62 of the Act which entitles the State Government to levy charge for water supplied from any irrigation work?
67. Section 62 makes it clear that although State has right over water resources, but water supply can be charged when it is drawn from 'irrigation work'.
"Irrigation Work" has been defined under Section 2 (o)(iv) to include any part of a river, stream, lake or natural collection of water or natural drainage and ground water to which the State Government has applied the provision of this Act. As per the argument on behalf of the Petitioners, before a part of a river is to be treated as an irrigation work, the State Government has to by notification declare the said part of the river to be so applied or used after a day to be named in the said notification as required under Section 12 of the Act. It is argued that use of word 'may' in this Section requiring prior notification is not directory but mandatory in nature, considering the context in which it has been used. Reliance in this regard is place on Raza Buland Sugar Co. Ltd. v. Municipal Board, 1964 SCC OnLine SC 119 ; Renaissance Hotel Holdings Inc. v. B. Vijaya Sai, (2022) 5 SCC 1.
68. In order to appreciate the question of law, it shall be desirable to refer to Bihar Irrigation Act, 1997 which has been enacted to consolidate the law relating to irrigation, embankment drainage, levy and assessment of water rates, betterment contribution and matter therewith.
Section 12 comes under chapter IV for 'irrigation'. It provides that whenever it appears to the State Government that water of any river (including tributaries) or stream etc, is received from any irrigation work constructed by the State Government may by notification declare that the said water will be so applied or used after a day to be named in the said notification, not being earlier than three months from date thereof.
Subsection-2 further provides that after the notification under Sub-section (1), the Divisional Canal Officer or any officer duly empowered under this Act shall cause public notice to be given at convenient places, stating that the State Government intends to apply or use the water referred to in that sub-section. Subsection-3 adds that the use of the said water of any irrigation work under the management or control of the State Government shall be regulated according to the provisions of this Act.
Chapter XI of the Act, 1997 is with respect to imposition of water rates and toll. Section 62 as referred to earlier, inter alia provides that whenever water is supplied, made available or used for purposes of irrigation, municipal supply, 20 industrial or commercial purposes from any irrigation work belonging to or constructed by or on behalf of the State Govt; and, municipal supply, the Govt shall be entitled to levy a separate charge for such water as water rate, and such water rates shall be levied differentially for different purposes. Section 63 provides for assessment of the water charges by the Canal Officer. Section 64 is the provision of appeal against the assessment order of the Canal Officer to the Divisional Canal officer in the prescribed manner within 21 days of the passing of the order.
Under Section 65 notice of demand is to be made as soon as the appeal has been preferred and disposed off under Section 64.
Section 115. Power to make rules--(1)The State Government may by notification in Official Gazette make rules to carry out the purpose of this Act or matters connected therewith which are required to be prescribed by rules under the provisions of the Act.
(2) No such rules shall be made by the State Government until a draft of the same shall be published in the Official Gazette for one month.
69. From the statutory scheme referred to above, it is manifest that Section 12 comes under Chapter IV of the Act which specifically deals with the subject 'irrigation', whereas charges of water under Section 62 is in Chapter XI which is regarding "Water Rates and Tolls". Even for irrigation work the requirement of notification is not mandatory but only directory in nature as will be evident from the use of word 'may' in this Section. The text or context of the statuary scheme as set in Section 3 of the Act does not suggest an interpretation to make it mandatory in place of directory. Logically requirement of notification under Section 12 of the Act will have no application in the present case, as in the instant case matter is not involved with 'irrigation', and the petitioner is not drawing water for irrigation, but for industrial and other purposes where water is being drawn as a raw material for industrial production and profiteering. As argued on behalf of the State. The average rate charged by Tata steel limited for supply of water to its Non-TSL consumer is of Rs.87.201 per thousand gallon, whereas the demand raised by the petitioner company is at the average rate of Rs 34.468.
70. It is all the more difficult to agree with the argument advanced on behalf of the petitioners that State cannot charge for water supplied in terms of Section 62 of the Act, without framing of rules under Section 115 of the Act, when Mode of assessment of rates has already been provided under Section 63, with further provision for appeal against such demand under Section 64 of the Act can be 21 preferred within 21 days from the date thereof. After assessment order attains finality, then notice of demand is made under Section 65. Merely because there is a provision for making rules, that too couched in directory terms, the State cannot be said to be precluded from regulating and charging for water being supplied under Section 62 of the Act, more so in the absence of any prejudice on account of non- framing of rules. Thus, when the requirement of notification of a part of river under Section 12 r/w Section 2 (o)(iv) is not mandatory in nature even for irrigation purposes, there is no reason to interpret it the other way to require mandatory notification before levying charges for water for non-irrigation purposes.
71. Much has been argued regarding prior publication of notification 09.05.2000 which is the subject matter of W.P.(C) No.1915 of 2005 tagged with W.P.(C) No.4544 of 2011. This cannot be said to be a case of imposition of water cess for the first time as will be evident from the fact that earlier such demands were raised for the period November 1992 to June 1998 which came under challenge in Writ Petition No.3819 of 1993(R) before the High Court and finally decided by the Apex Court in TISCO Ltd. v. State of Bihar, (2018) 12 SCC 107. Further, as pleaded on behalf of the State Tata Steel Ltd. has been charging for supply of water to its Non-TSL consumers @ Rs 87.201, whereas the demand raised from Petitioner Company is at the average rate of Rs 34.468 .Thus as per the detail annual billing raised by the Petitioner Company for the period of 2012 to 2019 is Rs 462.51 crore, whereas total payment to the respondent state during this period towards monthly bill was Rs 316 crore. This is an instance of profiteering on the water drawn from controlled flow of water from the river, and then raising technical objection regarding prior publication of notification. I find force in the argument on behalf of the State that it is not inherent in the constitutional requirements for the exercise of State's power of taxation that objections should be called and considered. It has been held in Avinder Singh v. State of Punjab, (1979) 1 SCC 137 at page 145 "But it is not inherent in the constitutional requirements for the exercise of the State's power of taxation that objections should be called for and considered "No taxation without representation" is a slogan with a different dimension and has nothing to do with a levy by a government controlled by an elected legislature exercising its power of taxation. We are unable to accede to the contention that representations from the residents not having been invited the taxation notification is bad in law. What is wholesome is different from what is imperative."
72. Learned Counsel on behalf of the petitioners are right in their contention that Section 62 does not envisage flat charges for water supplied, but contemplates of differential charges for different purposes. In this regard direction was given in 22 C.W.J.C. No.3819 of 1993(R) right of the State to charge for water supplied was upheld but it was held that there has to be a distinction between the water used for industrial purposes and that used otherwise, especially in the context of the municipal obligations entrusted to TISCO by the State Government. Demand in this case was quashed with direction to the State Government to recalculate the amount to be demanded, on the quantum of water used for non-industrial purposes and for industrial purposes at different rates. By the impugned notification dated 01.04.2011, differential rates have been applied as under:
Øe mi;ksx izkd`frd tyJksr tyk'k; ugj ls
la[;k ¼unh ukyk forj.kh½ ls ls vkiwfjr
vkiwfjr tydj nj vkiwfjr tydj
tydj nj
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1 vkS|ksfxd ¼E;wfufliy ty 9-10 26-40 65-50
lfgr½ bdkbZ;ks@
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2 lrgh ty dk mi;ksx is;ty 45-50 131-90 327-60
ds :i esa ¼dksYM fMªaDl]
fczHkjht ,oa feujy okVj½
3 is;ty ,oa LoPNrk foHkkx; lHkh tyJksrksa ¼;Fkk izkd`frd tyJksr]
uxj fuxe; uxjikfydk; tyk"k;] ugj½ ls vkiwfjr tydj nj
vf/klwfpr {ks= lfefr; ekMk] 7-90
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ljdkjh laLFkku }kjk
E;wfufliy {ks=ksa esa is;
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73. From the above table, it is evident that as per the new notification differential rates have been applied. But, for the arrear demands raised the State is required to quantify the arrears as per the differential rate. In all these writ petitions except W.P.C. No.1581 of 2010 and W.P.(C) 1915 of 2005 no arrear has been raised for the period before the impugned notification in which differential rates have been applied. In these two writ petitions the demand is not sustainable as arrears for the period before 01.04.2011 has been raised without applying differential rates. Therefore, such demands raised in these two writ petitions are quashed, with the direction to the State Government to quantify their demand at a differential rate as per the nature of consumption.
74. It is further contended on behalf of Petitioner in W.P.C. No.1581 of 2010 that it has been drawing water from free flowing river and not from any irrigation work as defined under Section 2(o)(iv) of the Act. Para-26 of the supplementary 23 counter affidavit dated 08.04.2024 contains the list of industries being supplied water through Chandil dam, upstream of Galudih barrage. This list consists of the name of other industries but not of the Petitioner Company.
75. Question whether the Petitioners are drawing water from "irrigation work"
is more a question of fact than of law. If the petitioners are drawing water from downstream a river from a dam or a barrage, then such petitioner can be said to be the beneficiary of the controlled flow of water from the said dam. There is no pleading or evidence to suggest by Petitioner HCL or others that the water was being drawn upstream from the dam and therefore, they were not beneficiary of the irrigation work. In all cases except W.P.C No.1581 of 2010 Petitioners had duly applied for supply of water from the canal officer and were being supplied with water on payment of charges. Challenge has come when the rates were increased in the year 2011 by the impugned notification.
76. On the other hand, it is pleaded on behalf of State in supplementary counter-affidavit dated 08.04.2024, that the Galudih Barrage is situated near Galudih, Ghatsila, and approximately 70 Km downstream of Chandil Dam. This integrated system is designed for water level management, ensuring a controlled and steady flow of water to meet various needs. Its construction was made to provide assured water supply for sustaining industrial, agricultural and domestic needs across the region. Galudih is fed from controlled flow from Subernrekha and Kharkhai river. This water is made available to HCL. Galudih Barrage is situated in Ghatsila, 17 km upstream from the petitioner company (HCL). This underscores the direct benefit and dependency of the company on the infrastructure managed by the WRD, Jharkhand.
77. From para 13 of the Counter affidavit dated 05.10.2010 filed on behalf of the Petitioner Company, it appears from the letter dated 18.08.2000 that HCL had submitted water consumption data for the period-1990-91 to 1999-2000 and there was arrear of water charges from 1999-2007.
78. From the demand dated 19.11.2009 raised against the Petitioner Company in W.P.(C) No.1581 of 2010, it is apparent that amount has been computed on the basis of consumptive use of water already consumed quarterly in the year 2000-2001 as H.C.L had not submitted their consumptive use of water till date. From this it is evident that there was a total arrear as detailed under:
Dues up to 1999 to 2000 : Rs. 60,98,109 Dues from 2000 -2001 to 2004-2005: Rs. 3,83,73,928/-
Dues from 2005-2006 to 2006-2007: Rs. 76,59,452/-
Total- Rs 7,05,83,363 24
79. W.P.(C) No.1581 by H.C.L has been filed in 2010 when the arrear of demand has been raised, although on earlier occasion water consumption data was furnished and at no stage any objection was raised. From the demand note itself, it is evident that consumption has been calculated on the basis data provided by H.C.L and therefore the plea that there was no proper mechanism to determine water consumption, has no merit and is accordingly rejected.
80. Human civilizations have grown by the side of rivers, and therefore, in India we call rivers 'mother' out of love and reverence. If rivers dry up, life thriving around it will also meet the same fate. In order to maintain the uninterrupted perennial flow of river and also for taming the furry of floods, mechanical means are employed by way constructing, dams, reservoirs etc which incur costs both in its construction and maintenance. It is not in dispute that Chandil, Tenughat and Galudi dam/barrage were constructed by the State. State has also to strike a balance in supplying water to different sectors depending upon their need and availability. Therefore, no one can claim immunity from payment of charges for water being supplied from "irrigation work". More so these are policy matters in which the Courts should be loath to interfere.
81. In the result, the questions raised at Bar is answered as under:-
A. The demand raised by imposing water cess by the State Government on the petitioners do not suffer from absence of legislative support. B. The plea of petitioners of non-framing of rules is dismissed, as there is no mandatory requirement of framing of rules under Section 115 of the Act for levying water cess. In view of evidence that HCL had been utilizing water from downstream of Chandil Dam and Galudih Barrage constructed on Suwarnrekha river was beneficiary from the said irrigation work, there was no requirement of notification under Section 12 which is meant for water being utilized for irrigation and not for industrial purpose. The plea of other petitioner also stands dismissed on this score for the reasons discussed above.
C. The State has been complying with requirement of levying separate charges on differential basis by notification no. 2/PMC/Jalapurti- 175/2007-272 & 275 dated 01.04.2011. However, the demands that has been raised for the period before this notification or in which differential rate has not been applied shall be quantified differentially as per the object and purpose of its consumption.25
D. There is no mandatory requirement of making rule for levying water cess in view of specific provision under Sections 62 and 64 of the Act.
Challenge to the Notification No.2/PMC/ Jalapurti-175/2007-272 & 275 dated 01.04.2011 and bills raised on its basis in W.P.(C) No.3427 of 2011, W.P.(C) No.4544 of 2011, W.P.(C) No.733 of 2012, W.P.(C) No.1193 of 2012, W.P.(C) No.7439 of 2012 and W.P.(C) No.2330 of 2017 fails and are accordingly, dismissed.
The demand raised in W.P.(C) No.1581 of 2010 and W.P.(C) No.1915 of 2005 are hereby, set aside, the respondent authority will quantify the differential rate for water cess as per purpose for which the water is being supplied, and by separately quantifying the demand, it be raised against the petitioner-Company. Interlocutory Application, if any, is disposed of.
(Gautam Kumar Choudhary, J.) Jharkhand High Court, Ranchi Dated, 28th June, 2024 AFR/Anit 26