9911796707
TMI Blog1965 (4) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... ey were engaged in manufacture and sale of bricks by using sand, clay etc. which constituted minor minerals, for which no permit or mining lease had been obtained, nor any royalty had been paid to Government. The Block Development Officer also gave a notice to each of them asking them to take permit for digging earth and taking sand for manufacture of bricks and to produce accounts in respect of such manufacture. 2. The petitioners challenged all these notices, mainly on the ground that what were being used by them for manufacture of bricks were not minor minerals, and, therefore, the Bihar Minor Mineral Concession Rules, 1964, were not applicable to them and that secondly, the Bihar State Government have no authority in law to impose any royally in respect of minor minerals and, in any case, the Assistant Mining Officer was not authorised under the Act or Rules, to assess or called royally from the petitioners. 3. Article 366 of the Constitution of India defines taxation as follows:-- "28. 'taxation' includes the imposition of any tax or impost, whether general or local or special, and 'tax" shall be construed accordingly." Such was the definition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 400 that there is no generic difference between a tax and a fee and both are different forms, in which the taxing power of a State manifests itself. The Constitution of India has made a distinction between a tax and a fee for legislative purposes and there are various entries in the three lists in Schedule VII about different forms of taxation, while there is an entry at the end of each of the lists about imposition of lees. In the above case, their Lordships of the Supreme Court, while considering the nature of the annual contribution payable by every Math or temple, under the Orissa Hindu Religions Endowments Act (Act IV of 1939, observed: "But the essential thing in a tax is that the imposition is made for public purpose to meet the general expenses of the State without reference to any special benefit to he conferred upon the payers of the tax. The taxes collected are all merged in the general revenue of the State to be applied for general public purposes. Thus, tax is a common burden and the only return which the tax payer gets is the participation in the common benefits of the State. Fees, on the other hand, are payments primarily in the public interest but for some s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to find if there is such authority given to the State Government, to impose and demand royalty for mines and minerals. Learned Counsel's contention was that it was not there. He referred to item 51 of the Union List in the Seventh Schedule: "Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the Public interest." The corresponding item in List 11--State List, is item 23. "Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union." The area of legislative operation has been kept separate and distinct. Anything, beyond what is declared by Parliament to be expedient in the public interest to be kept under the control of the Union, will be under the legislative ambit of the State in regard to mines and mineral development in the State. The Mines and Minerals (Regulation and Development) Act, 1957 (Act 67 of 1967) is an enactment of the Parliament for the regulation of mines and the development of minerals under the control of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder this delegated authority that the State Government (not the State Legislature) can frame rules in connection with minor minerals. Having given this power to the State Government, the Parliament had to exclude, in Section 14, the operation of the provisions under Sections 4 to 18, in respect of minor minerals, as otherwise, there would have been conflict and overlapping. The Bihar Minor Mineral Concession Rules, 1964. were made under Section 1ft and they came into force from the 18th April 1964. Before that rules for regulating the licences and leases in respect of minor minerals and other connected purposes, were in force in the State of Bihar, to which I shall refer later and those rules were operative till the 18th of April, 1964, under Sub-section (2) of Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957 (to be referred hereafter as the Act). I should here refer to item 50 in the State List in the Seventh Schedule which is as follows:-- "Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development". The rates of royalty mentioned in the Bihar Minor Mineral Concession Rules 1964 (to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and contended that the rule-making power is only confined to the matters connected with the grant of licences or leases, and not any levy in that respect. It is difficult to concede to this argument. Conditions of rent and royally are integral parts of a lease, and they would necessarily come within the ambit of the powers given to make rules under Subsection (1). Besides, the last clause in this sub-section "and for purposes connected therewith" will also necessarily include the imposition of a condition for payment of royally. That is a purpose connected with the grant of the mining lease. I do not find any item in the Union List in the Seventh Schedule corresponding to item 50 of the State List. If imposition of royalty shall be taken, as contended for the petitioners, as a matter outside the regulation of mines and mineral development, Section 9 of the Act will be outside the legislative competency of the Parliament. A reference, in this connection, to the Mineral Concession Rules. 1949, which were made under Section 5 of the Mines and Minerals (Regulation and Development) Act, 1948, will be helpful. That Act, in Section 5(1) authorised the Central Government to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als under Section 15(1). Admittedly, before 1957, when the Mines and Minerals (Regulation and Development) Act was enacted, the State Government had the power to prescribe rules for regulating the extraction of minor minerals (vide Section 8--The Mines and Minerals (Regulations and Development) Act 1948, Rule 1. Mineral Concession Rules 1949]. Royalty was being collected for minor minerals also. So was the position before the Constitution came in 1950. In that context, if the Act of 1957 did not specifically express anywhere the intention to abolish imposition of royally in respect of minor minerals, it has to be taken that the Parliament look appraisal of the existing law and usage and delegated all powers in that connection to the State Government in respect of minor minerals under Section 15. If the Parliament would have wanted really to exclude minor minerals from payment of royally, it would have so expressed in Section 9 which specifically provides for payment of royalties on all minerals. The exclusion of Sections 4 to 13 as mentioned in Section 14, in respect of minor minerals, appears to be for the sole purpose of conferring all such powers, as covered by those sections, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that alone. 'Minerals' is, by far, a more general word than 'mines'. In Stroud's Judicial Dictionary (2nd Edition) brick-clay has been mentioned with other minerals, such as, China clay, coal and ironstone, granite, state, stone etc. In several decisions referred to in that dictionary, in that connection, brick-clay has been held to be n mineral. The definition of 'minor minerals' as given in the Act is artificial. It has only divided the minerals into two sections so that their development may be regulated separately by two authorities, Union and State Government. If brick-earth or brick-clay is a mineral and 1 do not find any reason why it should not be, the Parliament had legislative competency to enact about it. 10. Learned Counsel's next contention was that though 'minerals', in an abstract sense, may include brick-earth or clay, it would not be so included in the expression 'mines and minerals'. The word "minerals' used in conjunction with the word 'mines' should be taken to have a limited connotation, in the sense that it will only be referable to the underground working of a mine. Any inorganic substance tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inerals' ;..... ..that a reservation of minerals includes every substance which can be got from underneath the surface of the earth for the purpose of profit, unless there is something in the context or in the nature of the transaction to induce the Court to give it a more limited meaning." The last mentioned Lord at page 689 of the report observed: "Now the word 'minerals' undoubtedly may have a wider meaning than the word 'mines'. In its widest signification it probably means every inorganic substance forming part of the crust of the earth other than the layer of soil which sustains vegetable life. In some of the reported cases it seems to be laid down, or assumed, that to be a mineral a thing must he of commercial value, or workable at a profit. But it is difficult to see why commercial value should be a test, or why that which is a mineral when commercially valuable should cease to he a mineral when it cannot be worked at a profit. Be that as it may, it has been laid down that the word 'minerals' when used in a legal document, or in an Act of Parliament, must be understood in its widest signification, unless there be something in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire extent of the working was considered in that case as not like a mine of coal or ironstone and accordingly, not included in the reservation. The case is not an authority, for the proposition that brick-earth or brickclay is not mineral. 11. Two other cases: (1872) 7 Ch. A 699 and Jersey (Earl) v. Neath Poor Law Union Guardians (1899) 22 QBD 555 have been referred, on the meaning of 'mines and minerals', in many later cases learned Counsel also referred to them before us. They do not give us more than the case of (1888) 13 AC 657 which I have discussed above, in the former case (1872) 7 Ch. A 699 china clay was held as in eluded in a reservation which spoke of 'mines and minerals', yet the surface right of the tenant was not allowed to be interfered with under the right thus reserved Similar was the position in the latter case. 12. In the case of Todd. Birieston and Co. v. North Eastern Rly. Co. (1903) 1 KB 603 which arose out of arbitration between the two parties, all the land, the subject of arbitration, contained, immediately under the surface or vegetable soil, an extensive bed of clay or common brick earth which extended to a considerable depth. Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to take away the brick-clay from the very surface of it. On the particular facts and circumstances of all the aforesaid cases, brick-clay was excluded from the expression 'mines of coal, ironstone, state or other minerals' as contained in the particular statute. That does not destroy the generic meaning of 'minerals' which will include an inorganic, substance, such as, brick-earth or clay. 13. Another line of cases was also referred by learned Counsel, in which the discussion is whether a substance that may be got for manufacturing or mercantile purposes, if not worked for commercial profit, will be called a mineral. Some of the cases took the view that abstractly speaking, a substance will come within the species of minerals but if not worked for profit or for manufacturing purposes, it will net be included in the category of minerals as used in any deed or statute. But the later view has settled the point, saying that neither of those two elements will be relevant. In the instant case that point has no bearing and it is not necessary to discuss those cases. 14. Learned Counsel pleaded that 'minerals' should be understood in the sense in which it is gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness community, took fireclay to be a mineral or not. 15. In the case of Hugh Symington v. Caledonian Rly. Co. 1912 AC 87 again Sections 70 and 71 of the Railways Clauses Consolidation Act came for interpretation with reference to the working of freestone rock. The House of Lords held whether a substance is a mineral within the meaning of those sections of the Act was a question of fact. They observed that freestone rock was a substance of exceptional character and recognised in the mining and commercial world and by railway companies and by all proprietors hi and through whose land railway line was constructed. This observation, however, had no material bearing upon the basis of that decision. 16. Another case relied upon by learned Counsel was (1862) 142 ER 956. The Inclosure Commission was prohibited from acquiring the land at the instance of one Mr. Church who claimed that his assent should have been taken inasmuch as he had a right to work brick-earth in the land in question. The reservation included the expression "mines, mineral stone and other substrata" Brick-earth was held as not included in that reservation obviously for the reason that it lay on. the surfac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices was on this basis. The mining lessee is required by the rules to maintain accounts and registers and submit the same to the authorities (see Rule 30-A and H). The impugned notices also stated that objections, if any, could be filed by the petitioners before the Assistant Mining Officer by a certain date mentioned therein. None of the petitioners availed themselves of that. Thus, I do not find any substance in the contention raised on behalf of the petitioners. 19. The impugned notices asked for payment of royalty for the period from 1958 to 1964. The Rules came into effect from the 18th of April, 1964. Prior to that, no rate of royalty had been prescribed for the brick-earth in any of the rules that held the field like the Mining Concessions (Bihar) Rules 1945. Rule 20 of the 1964 Rules provided that when a lease is granted or renewed royalty shall be charged at the rates specified in Schedule 2. None of the petitioners took any lease. Their use of brick earth was not under any lease. Rule 37 provides penalty for unauthorised extraction and removal of minor minerals, and according to that, notices were given to the petitioners as to why they should not be prosecuted. The ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith reference to such description that a quarry permit is to be given. Rule 25 has only excluded reserved and protected forests. Thus, if a person wants to extract and remove any minor mineral from any other land, he has to take a quarry permit according to Rules 25 to 27. Quarry permits in reserved and protected forest area are dealt with under rule 28 with which we are not concerned. The difference between a mining lease and a quarry permit is obvious. Rule 27 lays down that every quarrying permit granted under Rule 25 shall contain a condition that the depth of the pit below the surface shall not ordinarily exceed ten feel. and that for digging pits beyond ten feet, the permit-holder shall obtain the approval of the Competent Officer. A quarry permit, it appears to me, can be in relation to any land which may or may not conic under the definition of 'quarry'. The words "any specified land" in Rule 25 are with reference to the description of the land which the permit-holder is required to state in his application. I cannot find any justification to challenge the notices calling upon the petitioners to lake quarry permit for extracting brick-earth from the lands ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
