Trilegal represented hydropower generators and distribution licensees in Uttarakhand High Court water tax ruling
The leading law firm in India, Trilegal successfully advised and represented hydropower generators and electricity distribution licensees in a significant legal challenge before the Uttarakhand High Court concerning the imposition of a tax on water drawn by hydropower plants for generation of electricity in the State of Uttarakhand.
Case Background
The matter involved a challenge to the constitutional validity of a state levy imposed on water utilised by hydropower projects—an issue that had remained unresolved for decades.
Pre-Litigation & Representation
The Trilegal team provided comprehensive legal support at the pre-litigation stage, including strategic advisory, drafting of pleadings, and representation before the High Court.
Unique Procedural Development
In a rare development, the case witnessed a split verdict at the Division Bench level following an earlier decision of a Single Judge, necessitating a reference to a third judge for final determination.
Judgment Outcome
The final opinion rendered by the third judge conclusively struck down the impugned levy, holding that the State legislature lacked the authority to impose such a tax on water used for hydropower generation.
Impact & Significance
The judgment brings long-awaited clarity on the legislative competence of states in relation to taxation of water drawn for hydropower generation. It results in substantial financial relief for the clients, with estimated savings in the range of INR 6,000–8,000 crore.
This landmark ruling is expected to have far-reaching implications for the hydropower sector across India, reaffirming constitutional boundaries while providing certainty to infrastructure and energy stakeholders.
Team
The Trilegal Dispute Resolution team advising on the matter was led by Shankh Sengupta (Partner) and Abhishek Kumar (Partner), supported by Nived Veerapaneni (Senior Associate) and Karan Arora (Senior Associate), along with Shubham Mudgil (Associate).
Conclusion
This ruling marks a significant milestone in constitutional and energy law jurisprudence, reinforcing limits on state taxation powers while safeguarding the commercial viability of hydropower projects across the country.
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