The Supreme Court on Wednesday gave a huge relief to mineral-producing states by rejecting the Centre’s plea for prospective effect of its July 25 verdict, which upheld the power of states to levy tax on mineral rights and mineral-bearing land. The apex court allowed the states to seek refund of royalty from April 1, 2005 onwards.
A nine-judge Constitution bench headed by Chief Justice DY Chandrachud said the argument for prospective effect of the July 25 ruling is rejected.
Conditionalities on payment of past dues: SC
The bench also comprising justices Hrishikesh Roy, Abhay S Oka, BV Nagarathna, JB Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma and Augustine George Masih, however, said there will be conditionalities on payment of past dues.
Payment of dues by the Centre and mining companies can be made to mineral-rich states in a staggered manner over the next 12 years, the bench asserted.
No penalty on payment dues: SC
The top court directed the states to not impose a penalty of any kind on payment of dues.
Why Centre opposed States' demand
The Centre opposed the demand of states for refund of royalty levied on mines and minerals since 1989. The Central government argued that refund of royalty levied on mines and minerals since 1989 will impact the citizens and the PSUs will have to empty their coffers by Rs 70,000 crore according to initial estimates.
This verdict will be signed by eight judges of the bench who by majority decided the July 25 judgement giving the state’s power to levy taxes on mineral rights, said the CJI.
He said that Justice Nagarathna will not sign Wednesday's verdict as she had given a dissenting view in the July 25 verdict.
In a majority 8:1 verdict on July 25, the bench had held that legislative power to tax mineral rights vests with states.
The verdict had overruled a 1989 judgement, which held that only the Centre has power to impose royalty on minerals and mineral-bearing land.
Some opposition-ruled mineral rich states then sought refund of royalty levied by the Centre and taxes from the mining companies since the 1989 verdict. The matter of refund was heard on July 31 and order was reserved.
(PTI inputs)
