The state government dubbed the high court verdict as "unfortunate".
Through its ruling, a division bench of Chief Justice R. Subhash Reddy and Justice V.M. Pancholi quashed the government's Gujarat Unreserved Economically Weaker Sections (Reservation of Seats in Educational Institutions in the State and of Appointments and Posts in Services under the State) Ordinance, 2016.
Issued on the Gujarat Foundation Day on May 1, the ordinance sought to provide reservation to the economically weaker sections among the higher castes, not covered by the present 50 per cent quota policy for the Scheduled Castes and the Scheduled Tribes and Other Backward Classes (OBCs).
The ordinance was to provide for 10 cent quota to economically backward sections (EWSs) among the higher castes with an annual income of Rs 600,000.
The ordinance was introduced reportedly to neutralise the quota agitation launched by socially, economically and politically powerful Patel community in the state since July 2015.
The Patels have been seeking quota under the OBC category through a pitched 10-month-old agitation across the state, and this proved to be a key factor for the exit of Anandiben Patel as the Chief Minister.
Delivering its order on several public interest litigations (PILs) filed by various individuals and organisations, the court termed the government move as illegal in the context of the Supreme Court guidelines on reservations not exceeding 50 per cent.
The bench also observed that the government's decision was not based on any scientific data or any survey analysis.
Gujarat government spokesperson Nitin Patel -- a leading contender for the Chief Minister's post -- called the high court's decision as "unfortunate".
"We wanted to bring about social equity and now it looks difficult to implement for the current academic year or ongoing government recruitment. The economically weaker sections would be big loser," Patel told reporters.
"The decision we took was not on the basis of caste or community but for the poor from across society. Therefore, we felt there was no need for a survey. Unfortunately, the high court has turned down our request."
Patel, however, said the court has granted the state government two weeks to approach the Supreme Court against the order.
Reacting to the news, Hardik Patel, the face of Patel quota stir, called it "failure" of the government.
"We always maintained that this is a lollipop and now the lollipop has melted. This was unconstitutional and done without following proper process. It was bound to be rejected."
Hardik maintained Patels would continue their agitation in support of their demands.
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