The state government submitted that the demand was made following a reassessment carried out "strictly in accordance with applicable Government Resolutions" and stated that the earlier billing omission was "owing to inadvertence", and the State was entitled to recover the legally due amount once detected.In a significant ruling reinforcing contractual certainty and limits on retrospective state action under the principle of estoppel, the Gujarat High Court recently set aside a Rs 146.79 lakh demand retrospectively raised by the state government against Reliance Industries Ltd (RIL) for alleged unpaid water charges pertaining to the years 1997 to 2005.Justice H M Prachchhak of the Gujarat High Court, in a judgment delivered April 15 and made available on Tuesday, held that once transaction had been concluded, it was “not open for the state government to ask the petitioner to pay arrears” by reopening the account to impose additional financial burden retrospectively.The court said, “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. It was a clear and unequivalent contract knowing and intending that it would be acted upon by the petitioner on the price charged…”Rejecting the submission of the state that the arrears have been sought based on the Government Resolution dated September 24, 2002, the HC quashed and set aside the July 2005 order of the state government as well as the bills raised by the state.The court order further said, “…it would be unfair now to demand from the petitioner the arrears of charges on the basis of the Resolution which was not acted upon…. This court is inclined to interfere with the said communication issued by the respondent State Government (July 2005). The contract entered into between the parties has been executed, concluded and the benefit has been passed on to the consumers by the petitioner…”The dispute arose from a demand notice issued on July 21, 2005, seeking recovery of Rs 146.79 lakh (Rs 1.4 crore) towards reassessed water charges for drinking purposes, calculated retrospectively from 1997 to 2005. Reliance Industries challenged the demand, arguing that they had already paid all dues as per earlier government resolutions and had even received a “No Due Certificate” up to October 2003. RIL also contended that the retrospective reassessment violated both contractual terms and settled billing practices.The petition contended that RIL required water supply for various purposes -for a township as well as a business with 6000 employees and thus, entered into an agreement with the state government on November 9, 1993, “reciprocating the rights andStory continues below this adobligations related to the project”. The state appointed a governing body to oversee and coordinate the construction of Singanpur Weir, which was built at a cost of Rs 33 crore entirely borne by Hazira Industries and a formal tripartite agreement was executed between Surat Municipal Corporation (SMC), Hazira Industries and other agency for rights and obligations. As per the petition, the state government cancelled the tripartite agreement and directed RIL and other companies to pay water charges at exorbitant rates prescribed in the resolution dated May 1, 1997.The petition states that when Hazira Industries moved the HC in 1998, the government came out with a clarification through a new resolution “directing the industries to pay the charges in terms of clarification dated January 27, 1999 and the rates as prescribed in the revised G.R. dated January 30, 2001 at concessional rate of interest without penalty.” RIL, therefore, paid Rs 1,065.10 lakh for the period of April 1997 and October 2003 and received the ‘No Due Certificate’.In the submissions before the court, the counsel for the petitioner submitted that the water being supplied for domestic purpose has also been charged in the bill at industrial consumption rate. The order notes that the counsel for RIL also submitted that the state had been “estopped” from raising fresh demands after accepting payments and issuing a no-dues certificate. RIL submitted that any revision in charges could only operate prospectively, not retrospectively.RIL also submitted that a portion of water was supplied free of cost to the nearby Mora village “without any charge whatsoever… such supply is made solely by way of a social gesture and a social obligation that the petitioner corporation believes it owes to the villages which are its neighbours and which lack basic infrastructure of portable water.” RIL submitted that the entire 0.34 MGD litres of water per day couldnot be billed at the industrial rate.The state government submitted that the demand was made following a reassessment carried out “strictly in accordance with applicable Government Resolutions” and stated that the earlier billing omission was “owing to inadvertence”, and the State was entitled to recover the legally due amount once detected.Aditi Raja is an Assistant Editor with The Indian Express, stationed in Vadodara, Gujarat, with over 20 years in the field. She has been reporting from the region of Central Gujarat and Narmada district for this newspaper since 2013, which establishes her as a highly Authoritative and Trustworthy source on regional politics, administration, and critical socio-economic and environmental issues. Expertise: Core Authority & Specialization: Her reporting is characterized by a comprehensive grasp of the complex factors shaping Central Gujarat, which comprises a vast tribal population, including: Politics and Administration: In-depth analysis of dynamics within factions of political parties and how it affects the affairs in the region, visits of national leaders making prominent statements, and government policy decisions impacting the population on ground. Crucial Regional Projects: She consistently reports on the socio-economic and political impact of infrastructure projects in the region, especially the Statue of Unity, the Sardar Sarovar Project on the Narmada River, the Mumbai-Ahmedabad High Speed Rail bullet train project as well as the National Highway infrastructure. Social Justice and Human Rights: Her reporting offers deep coverage of sensitive human-interest topics, including gender, crime, and tribal issues. Her reports cover legal proceedings from various district courts as well as the Gujarat High Court (e.g., the Bilkis Bano case remission, POCSO court orders, Public Interest Litigations), the plight of tribal communities, and broader social conflicts (e.g., Kheda flogging case). Local Impact & Disaster Reporting: Excels in documenting the immediate impact of events on communities, such as the political and civic fallout of the Vadodara floods, the subsequent public anger, and the long-delayed river redevelopment projects, Harni Boat Tragedy, Air India crash, bringing out a blend of stories from the investigations as well as human emotions. Special Interest Beat: She tracks incidents concerning Non-Resident Gujaratis (NRIs) including crime and legal battles abroad, issues of illegal immigration and deportations, as well as social events connecting the local Gujarati experience to the global diaspora. ... Read MoreStay updated with the latest - Click here to follow us on Instagram© The Indian Express Pvt Ltd