JSW Energy Challenges Goa's Green Cess Act in SC, Citing State's Legislative Incompetence

Recently, JSW Energy approached the Supreme Court, contesting the legislative authority of the Goa state legislature to enact the Green Cess Act and the Green Cess Rules, which impose a liability on the company for the payment of Green Cess. JSW Energy has primarily argued that Section 4 of the Green Cess is "manifestly arbitrary", focusing on whether the concept of 'environment' falls within the legislative competence of the state.

A bench led by Justice BV Nagarathna declined to entertain the appeal in its current form but instructed the company to file a writ petition within a week under Article 32, challenging the validity of the Goa cess laws and the assessment notices issued under the Act. The Supreme Court further directed that no coercive action be taken against JSW Energy based on the assessment notice issued by the state for a period of three weeks.

In challenging the constitutional validity of the Goa Cess on Products and Substances Causing Pollution (Green Cess) Act, 2013, and the Goa Cess on Products and Substances Causing Pollution (Green Cess) (Functions and Duties of the Competent Authority, Assessment, Levy, and Collection of Cess) Rules, 2014, JSW Energy referenced the Supreme Court judgement in Reliance Industries vs. Gujarat, which ruled that 'environment' does not fall within the State's legislative competence. The Court further held that an environment-focused levy imposed by a state cannot be linked to 'public health' under Entry 6 of List II of the Seventh Schedule of the Constitution.

Senior Counsel NK Kaul and Counsel Ninad Laud, representing JSW Energy, contended that the assessment notices issued to the company were identical to those previously issued to its group companies—JSW Steel and South West Port (SWPL)—insofar as they sought to impose liability for the payment of green cess on the same consignment. They asserted that the green cess should not be levied twice on the same consignment of products or substances. Also, they pointed out that the Supreme Court had already stayed the assessment notices against their group firms.