Senior advocate Darius Khambata appearing for one of the petitioner companies argued that the field of legislation for “environment” did not appear in any of the three lists in the schedule of the Constitution of India.
In light of this, it would fall within the residuary entry which implied that the State had no legislative competence to enact the law.
The division bench, however, concluded that the levy under the Act was to augment the State’s revenue by having programmes and schemes to reduce the carbon footprint by invoking the “polluter pays principle” as a justification for the levy.
The Court also opined that if the carbon footprint left behind by the companies is reduced, then this would not only lead to more acceptability of the individual company activity but also reduce their liability to do the same.
“Reduction of the carbon footprint would not only lend greater acceptability to such activities but would also reduce the primary liability of the petitioners and responsibility to take measures or settle claims based on the principle of polluter pays principle,” the Court said.
The Court also could not agree with the broad contention that the field of “environment” or “environmental pollution”, necessarily fell within the residuary entry just because it was not expressly mentioned in the State or Concurrent List.