RAMESHWARA JUTE MILLS LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) These two writ petitions have been filed by the assessee M/s. Rameshwara Jute Mills Ltd. seeking quashing of demand notices issued for 2010-11 and 2011-12, on the same and similar grounds and therefore, both the writ petitions are being disposed of by a common order. The petitioner has prayed for the following reliefs:

(2.) The petitioner, a Limited Company, is a mining lessee of Mineral Iron Ore and it is engaged in the business of mining and sale of the Iron Ore. The petitioner-company was granted mining lease over an area of 640 acres in Village-Barai Buru-Tatiba, Barajamda, P.S.-Barajamda, District-Singhbhum-West, Jharkhand. The petitioner-company is registered under the Jharkhand Value Added Tax Act, 2005 (hereinafter referred to as "the Act") with TIN-20241200662. It is stated that Schedule-II of the Mines and Minerals (Development and Regulation) Act, 1957 provides the rate of royalty in respect of minerals and in terms of Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957, a mining lessee has to pay royalty on consumption/removal of minerals at the rate prescribed in Schedule-II of the said Act. Entry-22 of Schedule-II provides that the royalty for Iron Ore Lumps and Fines would be the sale price at ad valorem basis. The petitioner was paying royalty at the rate of 1096 of the sale price. Prior to the said Notification there was fixed royalty for different quality (iron content) of Iron Ore on tonnage basis. However, basis was changed to ad valorem by the subsequent Notification. The Central Government in exercise of powers conferred by Section 13 of the Mines and Minerals (Development and Regulation) Act, 1957 amended the Mineral Concession Rules, 1960 and substituted Rule 64D in the Mineral Concession Rules, 1960. Rule 64D provides that the royalty shall be computed on minerals on ad valorem basis according to the formula mentioned therein. The amendment provided that the state-wise sale price for different minerals as published by Indian Bureau of Mines shall be the sale price for computation of royalty in respect of any mineral produced.

(3.) It is further stated that the Iron Ore is a de-controlled commodity and there is no law restricting or fixing the price of Iron Ore Lumps or any other form of the Iron Ore and therefore, fixing of sale price of Indian Bureau of Mines by virtue of Rule 64D is bad, arbitrary, misconceived, miscalculated and against the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 and the Constitution of India. The Mines and Minerals (Development and Regulation) Act, 1957 does not give power to make Rule nor does it give power to any authority to fix sale price of minerals. The sale price may depend upon the quantity of the Mineral Ore and thus, a lesser quantity may fetch higher price whereas, in bulk sale the price may come down and thus, there cannot be fixed sale price in respect of de-controlled item. At no point of time either the Assessing Authority or Indian Bureau of Mines took any data from the petitioner-company to ascertain what is the sale price of the Iron Ore sold by the petitioner-company and therefore, the Indian Bureau of Mines or any authority cannot assume a sale price for the petitioner-company.