SC asks petitioner to move to appropriate forum in case of PIL against misuse of clean energy cess in NCEF (National Clean Energy Fund)

The Supreme Court observed that a contract is void if prohibited by a statute under a penalty, even without express declaration that the contract is void

The petition was filed in the Supreme Court by Senior Advocate Maneka Guruswamy for petitioner Atul Gulati in public interest against the diversion and misutilization of funds lying in NCEF, where the funds were collected as cess on coal for clean energy initiatives to compensate states under GST; under Finance Act, 2010.

The cess of NCEF (Green Cess) was initially Rs. 50 levied in FY 2010-2011 which was increased to Rs. 100 per tonne in FY 2014-2015 and so on it increased to Rs. 400 per tonne. The respondents collected around Rs. 86,000 crores, but only 34% transferred to NEEF despite its objectives.

The petitioner also prayed for declaration of section 8 and section 10 of Goods and Services Tax (Compensation to States) Act, 2017 as illegal and unconstitutional and return the amount towards NCEEF (National Clean Energy & Environment Fund) and to be used towards the purpose it was collected for i.e. research and innovative projects, development activities, all towards promoting clean sources of energy and hence clean environment to citizens.

The petitioner admitted that it is the need of development to continue exploitation of non-renewable and other harmful energy till we start depending on coal and other such sources of power. But the need of the hour is to not only save the non-renewable energy but also to reverse the damage caused.

Petitioner added that any diversion of funds will cause great hindrance in planned activities towards development. The correct use of NCEF lies in parallel to Polluter pays Principle which has been accepted as the basis of law (Grundnorm) in India derived under Article 21.

The Supreme Court in the case allowed the petitioner to withdraw the case from apex court and file in the appropriate forum and said “we don’t entertain these petitions under article 32 immediately. We will give you the chance to move to High Court”. Said Justice D.Y. Chandrachud.

Cess – means a tax and is generally used when the levy is for some special administrative expense which the name itself indicates i.e. is a tax which generates revenue utilized for specific purpose.

Swikritimala Dubey
I am Ms. Swikritimala Dubey and my aim is to help everyone who come across me with all the knowledge I have. I am a law graduate from law College Dehradun, Uttaranchal University. I wish to develop a society which has high expectation and achievements in the field of law and create a great place for learning which is of utmost importance for me.  A community of lifelong learners, responsible global citizens and champions of our own sucess is what I believe in.