ORISSA CEMENT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Certain provisions of the Orissa Cess Act, 1962 were declared ultra vires by the Supreme Court in Orissa Cement Limited v. State of Orissa, AIR 1991 SC 1676, judgement in which was pronounced on 4-4-1991. The ground was incompetency of the State Legislature in enacting those provisions. Despite the unconstitutionality of the provisions, the cess collected before 22-12-1989, the date on which this Court had rendered its judgement declaring the levy as unconstitutional, was allowed to be retained by the State. However, it was stated in paragraph 74 that the State cannot on any grounds of equity be permitted to retain cess collected on or after the date of the High Court's judgement. The result of this decision was that various States in the country (may it be stated that along with the aforesaid Orissa Act, the provisions of many other State Acts were also held as ultra vires) were required to refund a large amount of cess and other taxes collected by them. An Ordinance titled as "The Cess and other Taxes on Minerals (Validation) Ordinance, 1992" was, therefore promulgated on 15-2-1992, which by now has been replaced by the Act of the same name.

(2.) After the Ordinance was promulgated, demands were made on the petitioners, inter alia, by the South-Eastern Coalfield Ltd. to pay cess, which became payable, according to the coalfields, by force of the Ordinance. The validity of the same has been assailed in these petitions.

(3.) The first of such petitions was moved on 27-3-1992 when it was admitted and an interim order of stay of the demand was passed. This was in O.J.C. No. 2415 of 1992. Similar petitions were moved thereafter in which similar orders were passed. We are presently concerned with the question whether the interim stay should be allowed to continue or the same should be vacated.