Water Cess: What does consumption of water mean for the calculation of Cess under the Water Cess Act ?

Delhi Electric Supply Undertaking v. Central Board for the Prevention and Control of Water Pollution, 1995 Supp (3) SCC 385.

Kuldip Singh, J, B.P. Jeevan:Reddy, J, S.P. Barucha, JJ.

Water & Air (prevention & Control of Pollution) Cess Act, 1977 (Section 3).

The Delhi Electric Supply Undertaking (hereinafter 'DESU') was assessed to water cesses under the Water & Air (Prevention & Control of Pollution) Cess Act, 1977 since it consumed water for cooling the turbines and other equipment in its thermal generating industries. A contention was raised on behalf of DESU that water was discharged back into the river and therefore it would not amount to "consumption" in its appeal against this order.

The Supreme Court also rejected this argument on the ground that the water which entered the factory must be taken to be consumed.

The Supreme Court while hearing an appeal against the order upheld the order of the High Court. The High Court in its judgement had made a detailed observation of water (prevention and control of pollution) Cess Act. 1977 and the explanation given under Sec. 3 and Schedule I, item 14 and Schedule II, item 1, and has also discussed occat meaning of the word "consumed" and the meaning of "consumption" of water. The Court held that the reason forwarded by DESU of drawing water and discharging the same into river would not amount to 'consumption' was not acceptable. Hence the DESU would be liable for payment of Water Cess under the said Act.