India, Oct. 29 -- The High Court of J&K and Ladakh on Thursday struck down the levy of water usage charges on hydropower projects under the Jammu and Kashmir Water Resources (Regulation and Management) Act, 2010, ruling that the charges were, in substance, a tax on electricity generation that the erstwhile state legislature lacked the competence to impose.

Allowing three petitions filed by 13 independent power producers, a Division Bench of Justice Sanjay Dhar and Justice Rajnesh Oswal declared the impugned provisions unconstitutional to the extent they authorised the levy of water usage charges on hydropower projects.

The Court also restrained the government from imposing any tax on the generation of electricity under the "garb of wate...