K VENKATA RAMAIAH Vs. GOVERNMENT OF ANDHRA PRADESH

JUDGEMENT

(1.) The legislative competency of the Andhra Pradesh Legislature in passing the Andhra Pradesh (Mineral Rights) Tax Act, 1975 (hereinafter called the State Act) is in question in this batch of writ petitions The point was raised earlier unsuccessfully before this Court on two occasions-once in Kesoram Cements V. Government of Andhra Pradesh (I) W P Nos 1451/76 etc. Dt. 21-9-1982 decided by Madhava Reddy, A C J (as he then was) and T L N, Reddy J. and again in M K Rama Murthy vs. Government of Andhra Pradesh (2) 1985 (1) A PL/84 decided by Jeevan Reddy and Sardar AH Khan, JJ. The controversy has now been raised again before us but this time, the petitioners claim to be amply supported in their contentions by the recent decision of the Supreme Court in India Cement Ltd vs State of Tamil Nadu (3) AIR 1990 SC 85 wherein 'royalty' has been held to be a tax. The question revolves round the interpretation of Entry 54 of List I in the 7th Schedule of the Constitution of India on the one hand and Entries 23, 50 of List II on the other and depends upon the point urged for the petitioners that the entire field of legislation in respect of regulation and development of mines and minerals including the right to collect royalty and tax on minerals vests in Parliament alone by virtue of the provisions of the Mines and Minerals (Regulation & Development) Act, 1957 and that the State legislatures are denuded of their power to levy tax on all mineral right held by holders of mining leases.

(2.) The petitioners are therefore seeking a declaration tbat the levy and collection of mineral rights tax under the State Act is ultra vires ef the powers ef the State Legislature and tbat the Stats should be restrained in future from jevying and collecting the said tax and also tbat the tax already collected should be directed to be refunded.

(3.) The preamble to tke State Act gays that it is as Aet passed to provide for the levy and collection of tax on miaeral rights of holders of mining leases in respect of certain minerals in ihe State of Andhra Pradesh. The 'Statement of Objects and Reasons' reads as follows : "The need to provide and improve infrastructural facilities for rapid exploitation of the vast mineral resources of the State has been engaging the attention of the Government for sometime. The Government consider it necessary to raise monies for the above purpose with a view to achieve this object, the Government have now decided to undertake legislation to levy tax on mineral rights of holders of mining leases subject to any limitations imposed by Parliament by law relating to mineral development and the rales made thereunder at a rate not exceeding one- fourth of the amount of royalty payable by them in respect of the minerals in the State."