The Gujarat High Court has set aside a Rs 146.79 lakh demand raised against Reliance Industries Ltd (RIL) for alleged unpaid water charges from 1997 to 2005. Justice H M Prachchhak, in a judgment delivered on April 15, ruled that once a transaction is concluded, the state government cannot reopen accounts to impose retrospective burdens. The court quashed the state's July 2005 order and related bills.
The Gujarat High Court has quashed a Rs 146.79 lakh bill issued by the state government to Reliance Industries Ltd (RIL) for alleged unpaid water charges spanning 1997 to 2005. The dispute stemmed from a demand notice dated July 21, 2005, following a retrospective reassessment of drinking water charges.
In his judgment delivered on April 15 and made public on April 22, Justice H M Prachchhak held that "it is not open for the respondent (state government) to ask the petitioner to pay arrears since the petitioner cannot pass on the burden to the consumers." The court emphasized that the contract had been fully executed and benefits passed to consumers.
RIL entered an agreement with the state on November 9, 1993, for water supply to its township and a business employing 6,000 people. The company built the Singanpur Weir at a cost of Rs 33 crore and paid Rs 1,065.10 lakh from April 1997 to October 2003, receiving a "No Due Certificate." RIL argued that some water was supplied free to the nearby Mora village as a social obligation.
The state contended the reassessment followed a Government Resolution of September 24, 2002, due to prior inadvertence. Rejecting this, the court set aside the July 2005 order and bills, citing principles of estoppel and contractual finality.