STATE OF RAJASTHAN Vs. BASANT AGROTECH (INDIA) LTD

JUDGEMENT

(1.) Leave granted in all the Special Leave Petitions.

(2.) Regard being had to the commonality of issue involved and the similitude of controversy pyramided in all these appeals, preferred by special leave, they were heard together and are disposed of by a singular order. For the sake of convenience, the facts in Civil Appeal arising from Special Leave Petition (Civil) No. 8283 of 2012 are adumbrated herein.

(3.) The respondent preferred DB Civil Writ Petition No. 4357 of 2009 before the High Court of Judicature for Rajasthan at Jodhpur challenging the constitutional validity of Chapter VII of the Rajasthan Finance Act, 2008 (for brevity 'the Act') which provides for levy of cess on mineral rights. The respondent was granted a mining lease for extraction on major minerals. As per the amendment brought in the year 2008 it was required to pay the environment and health cess imposed under Section 16 of the Act. The State Government, in exercise of the powers conferred by Section 19 of the Act, framed a set of rules called Rajasthan Environment and Health Cess Rules, 2008 (for short "the Rules"). Rule 13 of the Rules provides for the head under which the cess collected under Section 16 of the Act is to be credited. Rule 14 of the Rules provides for the allocation of the funds for implementation of environment and health projects in mining areas in various parts of the State. Questioning the constitutional validity of the impost under the Act it was contended before the High Court that the State Legislature had no competence to impose environment and health cess on major minerals as the field is occupied by the provisions contained in the Mines and Minerals (Development and Regulation) Act, 1957 (for short 'the MMDR Act'), which is an enactment by the Parliament. It was urged that the imposition of such cess is not a fee but a tax which is covered by the MMDR Act whereunder the power to levy tax on the mineral rights in respect of major minerals is vested in the Parliament. It was further put forth that the Parliament, in exercise of the powers conferred on it by Entries 54 and 55 of List-I of the Seventh Schedule to the Constitution of India, has enacted the MMDR Act and the Rules framed thereunder and under the said Act, the power vests from all spectrums in the Central Government in respect of major minerals and, therefore, the State Legislature could not have enacted such law for imposing such cess on major minerals. It was contended that the cess in question is a nature of fee and the levy of fee on major minerals is governed by the provisions contained in the MMDR Act and the Rules framed thereunder and hence, the State Legislature does not have competence to impose such cess.