New Delhi In a setback to PepsiCo India Holdings, the Supreme Court on Monday upheld the Maharashtra government’s decision to impose higher charges for water used for manufacturing of soft drinks by the company. A bench headed by Justice MK Sharma dismissed the Cola major’s petition alleging that the MIDC had arbitrarily increased water charges in 2001 for the industrial consumers in the state who use water as a raw material. “The increased rates, though introduced retrospectively by MIDC in November 2001, were only implemented with effect from May 2005… The exorbitant increase from R9 per cubic metre to R47 per cubic metre without any basis, or rationale is unreasonable,” PepsiCo had stated. The state was not entitled to demand revised charges with retrospective effect as the company had already sold out the products considering the cost of production at the relevant point of time and the same could not be passed on to the consumers now. Besides, the water supply agreement stipulated that any increase in water tariff should be intimated to the consumer by giving, at least, one-month notice and, therefore, the increase in tariff with retrospective effect without giving any advance notice was arbitrary and should be set aside, the company had argued.