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TMI Blog1972 (3) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 62 of Schedule attached to the notification, persons engaged in mining of manganese and iron ore with the help of machinery had to pay ₹ 500/-per area and under Entry 63 persons engaged in mining of manganese and iron ore without the help of machinery had to pay ₹ 200 per area. On the basis of the above notification imposing licence fee, the petitioner in Writ Petition No. 1934 of 1967 was called upon by the Chief Executive Officer of the Taluk Development Board Sandur (respondent 2) by his notice bearing F. No. 30/67 L. I.. dated 18-7-1967 to pay ₹ 3,000/- being the arrears of licence fee from 1963-64 to 1967-68 in respect of three areas, namely, an area of 640 acres in Karadikolla, another area of 175-63 Hectares in Karadikolla and Bhavihalli area. The petitioner in Writ Petition No. 2131 of 1967 was similarly called upon by the respondents by notice similarly bearing F. No. 13/67 dated 22-7-1967 to pay in all ₹ 10,500/-by way of licence fee in respect of the areas in which the petitioner was engaged in mining within Sandur Taluk. Aggrieved by the notices of demand and the notification issued under Sections 143 and 144 of the State Act referred to above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the public interest. A combined reading of Entries 23 and 50 in List II and Entry 54 in List I, establishes that as long as the Parliament does not make any law in exercise of its power in Entry 54, the powers of the State Legislature in Entry 23 and in Entry 50 would be exercisable by the State Legislature. But when once the Parliament makes a declaration by law that it is expedient in the public interest to make regulation of mines and mineral development under the control of the Union, to the extent to which such regulation and development is undertaken by the law made by the Parliament, the power of the State Legislature under Entries 23 and 50 of List II would get denuded. 6. It is necessary at this stage to refer to the provisions of the Central Act. The preamble of the Central Act shows that it was enacted with a view to provide for the regulation of mines and development of minerals under the control of the Union. Section 2 of that Act reads, "it is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided". Sections 4 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be recovered in the same manner as an arrear of land revenue. It is unnecessary to refer to other provisions of the Act for the purpose of this case. In exercise of the power conferred by Section 13 of the Central Act, the Central Government has framed Rules known as "The Mineral Concession Rules, 1960" which deal with the procedure for the grant of a prospecting licence or the mining lease and conditions subject to which it can be issued. It is manifest from the provisions of the Central Act extracted above that the Parliament has made the necessary declaration as provided in Entry 54 of List I of the Seventh Schedule to the Constitution and has assumed Legislative control over matters dealt with in the Central Act. It is, therefore, clear that to the extent the' Central Act makes provision regarding the regulation and development of minerals, the powers of the State Legislatures under Entry 23 of List II stand curtailed. 7. The State Act was passed in the year 1959. Its object was to consolidate and amend the laws relating to Panchayats and to provide for the constitution of Taluk Development Boards and District Development Councils in the State of Mysore. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43 of the Mysore Village Panchayats and Local Boards Act. 1959. be used without licence. Rate of licence fees fixed. XX XX XX XX XX XX 62. Mining in manganese, iron ore, read-oxide, barytes, asbestos, steatite, mica, etc.. with the help of machinery per area. 500-00 63. Mining in manganese, iron ore, red-oxide, barytes, asbestos steatite, mica, etc., without the help of machinery per area. 200-00 XX XX XX XX XX xx" 8. The respondents claim in the counter-affidavit filed by them that the fee that is sought to be levied under the above notification although is termed as licence fee is in truth and substance a tax. It may be mentioned here that the State Act does not specifically authorise the levy of any such licence fee or tax on a person carrying on mining operation in manganese ore or iron ore. The question for consideration is whether the notification authorising the levy of licence fee or tax on mining of manganese ore or iron ore is valid. 9. It was argued by Sri V. Krishna Murthy, the learned Counsel for the petitioners, that in view of the declaration contained in Section 2 and the other provisions of the Central Act. it should be assumed that the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issa Mining Areas Development Fund Act (27 of 1952) was Questioned on the ground that the Orissa State Legislature had no power to pass the said Act in view of the provisions of the Mines and Minerals (Regulation and Development) Act. 1948 (53 of 1948) passed by the Central Legislature. By the time the above case came up for decision before the Supreme Court, the Central Act which was passed in 1957 had come into force. While dealing with the contentions urged before it, the Supreme Court observed as follows:-- ".....The jurisdiction of the State Legislature under Entry 23 is subject to the limitation imposed by the latter part of the said Entry. If Parliament by its law has declared that regulation and development of mines should in public interest be under the control of the Union, to the extent of such declaration the jurisdiction of the State Legislature is excluded, in other words, if a Central Act has been passed which contains a declaration by Parliament as required by Entry 54, and if the said declaration covers the field occupied by the impugned Act the impugned Act would be ultra vires, not because of any repugnance between the two statutes but because the State Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y difference. If it is held that this Act contains the declaration referred to in Entry 23 there would be no difficulty in holding that the declaration covers the field of conservation and development of minerals, and the said field is indistinguishable from the field covered by the impugned Act. What Entry 23 provides is that the legislative competence of the State Legislature is subject to the provisions of List I with respect to regulation and development under the control of the Union, and Entry 54 in List I requires a declaration by Parliament by law that regulation and development of mines should be under the control of the Union in public interest. Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to the State Legislature to pass an Act in respect of the subject-matter covered by the said declaration. In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that is required is a declaration by Parliament that the regulation and development of mines are under the control of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... add that the validity of this impost was affirmed, however, for the reason that whereas the Orissa Act, the Central Act of 1948 was a Pre-Constitution law and as in terms of Entry 54 'Parliament' had not made the requisite declaration, but only the previously existing Central Legislature it was held not to be within the terms of Entry 54 and the State enactment was held to continue to be operative. Since the Central Act 67 of 1957 contains the requisite declaration by the Union Parliament under Entry 54 and that Act covers the same field as the Act of 1948 in regard to mines and mineral development, we consider that the decision of this Court concludes this matter unless there were any material differences between the scope and ambit of Central Act 54 of 1948 and that of the Act of 1957. Learned counsel for the appellant was pot able to point to any matter of substance in which there is any difference between the two enactments. It was suggested that whereas Section 6 of the Act of 1948 empowered rules to be made for taxes being levied, there was no specifically power to impose taxes under that of 1957. It is not necessary to discuss the materiality of this point because wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raph 10 of its decision, in H. R. S. Murthy's case the Supreme Court has observed that it WRS unnecessary for the purpose of that case to examine the question as to what is meant by 'tax on mineral rights' falling Within Entry 50 of the State List. 13. One view that may be taken about the meaning to be attached to the expression 'tax on mineral rights' appearing in Entry 50 is the one appearing in paragraph 53 of the minority judgment of Wanchoo. J., (as he then was) in Hingir Rampur Coal Company's case. [1961]2SCR537 . which reads as follows:-- "The next contention on behalf of the State of Orissa is that if the case is not justified as a fee, it is a tax under Item 50 of List II of the Seventh Schedule. Item 50 provides for taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development. This raises a question as to what are taxes on mineral rights. Obviously, taxes on mineral rights must be different from taxes on goods produced in the nature of duties of excise. If taxes on mineral rights also include taxes on minerals produced there would be no difference between taxes on mineral rights and duties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act cannot be justified as a tax on mineral rights". 14. The views expressed by the learned Judge of the Supreme Court in minority judgment are entitled to great respect and have very high persuasive value. The Supreme Court however in the majority judgment in the above case, did not decide the question as to what meaning should be given to the expression 'tax on mineral rights' appearing in Entry 50 and again in H. R. S. Murthy's case, the said question was not decided. 15. Entry 50 in List II which authorises the levy of tax on mineral rights is subject to limitations imposed by Parliament by law relating to mineral Development made in exercise of its power under Entry 54 of List I. It was contended on behalf of the respondents that in the instant case the tax was not on mineral rights, but on the activity of mining carried on in certain areas. We find it difficult to accept the said contention. As observed by the Supreme Court in State of Orissa v. M. A. Tulloch, [1964]4SCR461 by making a declaration under Section 2 and enacting Section 18 of the Central Act, the intention of the Parliament to cover the entire field of mineral development including tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Central Act, the State Legislature lost its legislative power Under Entries 23 and 50 of List II to the extent indicated in the Central Act. Hence, we cannot accept the contentions of the respondents that even after the passing of the Central Act, the State Legislature by enacting Section 143 of the State Act intended to confer power on the respondents to levy tax on the mining activities carried on by persons holding mineral concessions. It follows that levy of tax on mining by respondents as per the impugned notification is unauthorised and is liable to be set aside. It was however argued that such a declaration cannot be made without pronouncing upon the validity of Section 143 of the State Act we do not agree. Section 143 of the State Act is not inconsistent with the Central Act, It does not in express terms authorise a levy of fee or tax on mining of manganese or iron ore. It cannot also be construed as conferring such a power on the respondents to levy a tax or fee on mining, in view of the well settled rule of statutory construction that a court construing a provision of law must presume that the intention of the authority in making it was not to exceed its power b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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