SUVARNA CEMENTS LTD Vs. SINGARENI COLLERIES CO LTD

JUDGEMENT

(1.) This batch of writ petitions is filed questioning the constitutional validity of the Cess and other Taxes on Minerals (Validation) Act, 1992 (for short Act 16 of 1992') and the demands made for payment of Cess and other Taxes on Minerals. The petitioners, in all the writ petitions, are lessees holding mining leases granted by the State Government.

(2.) The Mines and Minerals (Regulation and Development) Act, 1957 (for short Act 67 of 1957') governs the grant of mining leases and leavy and collection of royalty in respect of mineral extracted. According to Section 9 of the Act, holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him from the leased area after such commencement at the rate for the time being specified in the schedule. Section 9(3) provides that Central Government may amend the Second Schedule under notification so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification, provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years. All the lease holders of mines were paying the royalty as fixed by the Government according to Section 9 of the Act. While so, the State Government has started levying Cess in Andhra and Telangana areas of Andhra Pradesh as per the provisions of the respective District Boards' Act. Section 3 ofthe Andhra Pradesh (Mineral Rights) Tax Act, 1975 (for short Act 14 of 1975') was declared as unconstitutional by this Court in K.S.P. Ltd., v. State of A.P., 1990 (1) APLJ 259 and Nagarjuna Cements v. State of A.P., 1990 (2) ALT 481 (398) following the decision of the Supreme Court in India Cement Limited v. State of Tamil Nadu, AIR 1990 SC 85 as the State has no legislative competence to enact a law for levying Cess on the minerals in the State and the Parliament is only competent to make a law in respect thereof. In view of those decisions, the State Governments became liable to refund cesses arid other taxes collected by them which was likely to have serious impact on State revenues. The Central Government, therefore, legislated the impugned enactment, which came into force on 4-4-1992.

(3.) Section 2 of the Act 16 of 1992 validates the Acts, notifications issued and actions taken under the Act from the date of inception of those Acts and the Acts remained in force upto 4-4-1992. The A.P. (Mineral Rights) Tax Act, 1975, the A.P. (Andhra Area) District Boards Act, 1920 and the A.P.(Telangana Area) District Boards Act, 1955 are incorporated in the Schedule to Act 16 of 1992. By virtue of the provisions of Act 16 of 1992, the State Government have issued demand notices to the petitioners to pay cess and mineral tax under the above said State Acts.