TMI Blog2018 (9) TMI 2141X X X X Extracts X X X X X X X X Extracts X X X X ..... Goa Cess Act and the Rules are a device for the State to augment its resources. The services rendered by the collection of the levy benefits the Petitioner as well, and there exists a co-relationship. Therefore, the Goa Cess Act and the Rules, whether it imposes a tax or fee, cannot be said to be unconstitutional - It needs to be noted that by Notification dated 6 April 2016 the levy where royalty is paid to the Government has been reduced to 'nil'. Thus, the challenge of the Petitioner on the constitutional validity of the Goa cess Act and the Rules on the ground of legislative competence must fail. Retrospective levy of the Cess - HELD THAT:- The State has argued that when the notification dated 23 January 2006 was published, it was clear that 1 February 2006 would be the appointed date on which the Act would come into force, as well as the same would be the date on which the levy would be made applicable and collected, and it was only a typographical error that Section 3(1) was not mentioned. A corrigendum to that effect was issued. Perusal of the said notification shows that it a corrigendum to the original Notification dated 23 January 2006, by which it was cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment revised the extent of the rate of cess on certain materials which were specified in Schedule I appended to the Goa Cess Act. 5. A notice dated 31 August 2010 was served on the Petitioner, calling upon the Petitioner to deposit an amount of ₹ 1088000/- as cess under the provisions the Goa Cess Act for the period from April 2010 to June 2010. The Petitioner, by this Petition, has challenged the action initiated by the State of Goa under the Goa Cess Act and the Rules. The Petitioner has prayed for a declaration that the Goa Cess Act and the Goa Cess Rules framed there under are ultra vires the Constitution of India, illegal, null and void. The Petitioner has also sought a declaration that the notification dated 13 May 2008, issued by the State, be held as arbitrary, illegal and unconstitutional and, therefore, null and void. 6. Rule was issued in the Petition. During the pendency of the Petition, further demand notices were issued to the Petitioner; those by amendment are also challenged. The Petitioner deposited the cess under protest and without prejudice to the contentions raised in the Petition. 7. Rule was issued by this Court in several other writ petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in respect of List I and List III of the Seventh Schedule. Entry 54 of List I, relates to regulation of mines and mineral development to the extent to which Parliament declares such regulation and development under the control of the Union by law. This has to be read with the power of the State legislature in Entry 23 of List II, which is subject to the power of the Parliament. Once the Parliament has legislated under Entry 54, the legislative power of the State to enact laws stands denuded. The Parliament has enacted the Mines and Minerals (Regulation and Development) Act (1957), the MMDR Act, to provide for development and regulations of mines and the necessary declaration under Entry 54 is made by the Parliament under Section 2 of the MMDR Act and, thus, the entire field pertaining to the minerals stands occupied. The issue as to the scope of the MMDR Act occupying the entire subject matter relating to the mines and mineral development covered by the MMDR Act, is settled. Apart from this position, the examination of the MMDR Act and the various provisions there under would show that the entire field of mines and mineral development, including that of taxation, is occupied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions and of the benches of the seven learned judges in India Cement Ltd., and Ors., vs. State of Tamil Nadu and Ors. AIR 1990 SC 85 and State of U.P. and Anr., vs. Synthetics and Chemicals Ltd., and Anr., (1991) 4 SCC 139. Since the decision in Kesoram Industries does not interpret or clarify the decisions in India Cement or Synthetics and Chemicals, the High Court is bound to follow the opinion of the larger bench of the Supreme Court. Even assuming the decision in Kesoram Industries is followed, the State does not have any power under Entries 6 and 13 of List II. Entries 6 and 13 only relate to general entries and tax cannot be levied under a general entry. As regards Entry 50, consequent upon the declaration under Section 2 of the MMDR Act, the State has no power. Neither Entry 56, nor Entry 66 can be relied upon. Section 4 of the Goa Cess Act provides that the proceeds of the Cess will be applied to promote the welfare of the people affected by the movements of carriers transporting the material and the Petitioner is not given any special benefit and the Government incurs no expenses for outlay of facilities in respect of the trade of the Petitioner. The Supreme Court in J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. There is a distinction between the subject matter of tax and the standard by which the amount of tax is measured. There is a distinction between the general subjects of legislation and the field of taxation. Merely because the methodology or mechanism adopted for assessment and quantification is similar, the two taxes cannot be said to be overlapping. Denial to the State is only to the extent of the declaration made by the Parliament and power to tax the mineral is with the State. So long as a tax or fee on mineral rights remains in pith and substance in augmenting the revenue of the State or a fee for rendering services by the State, it does not impinge upon the regulation of mines and regulation development or upon control of the Central Government. The decision of the Supreme Court in Kesoram Industries is followed by Rajasthan High Court in Madhyabharat Phosphate vs. State of Rajasthan 2012 (1) ILR (Raj) 355 upholding the legislative competence of the relevant provisions of the Rajasthan Finance Act and Rajasthan Environment and Health Cess Rules. The Supreme Court in Kesoram Industries interpreted all earlier Judgments and that being the latest decision of the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following decisions. R.K. Garg and ors. vs. Union of India (UOI) and ors. (1981) 4 SCC 675; Sainik Motors, Jodhpur ors. vs. The State of Rajasthan AIR 1961 SC 1480; Saurashtra Cement and Chemical Industries and anr. vs. Union of India and ors. (2001) 1 SCC 91; M.P.V. Sundararamier Co. vs. The State of Andhra Pradesh and Anr. AIR 1958 SC 468; State of Orissa and Another vs. M/s. M.A. Tulloch and Co., AIR 1964 SC 1284; State of U.P. and anr. vs. Synthetics and Chemicals Ltd. and anr. (1991) 4 SCC 139; Baijnath Kadia vs. State of Bihar and ors., (1969) 3 SCC 838; Western Coalfields Limited vs. Special Area Development Authority, Korba and anr., (1982) 1 SCC 125; M.S. Sandhu and anr. etc. vs. State of Punjab and ors., (2014) 6 SCC 514; Madhyabharat Phosphate Pvt. Ltd. (M/s.) vs. State of Rajasthan 2012 (1) ILR (Raj) 355; State of West Bengal. vs. Kesoram Industries Ltd. and ors. (2004) 10 SCC 201 12. First, we will advert to the principles governing the legislative competence of the State. Then we will refer to the judicial pronouncements in respect of mineral rights and power of the State legislature. In this context, we will extensively refer to the decision of the Constitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal matter specifically mentioned in the entry shall also include the legislation touching incidental and ancillary matters. Where three Lists are containing a large number of entries, there is bound to be some overlap. In such a situation the doctrine of pith and substance has to be applied to determine as to which entry does a given piece of legislation relates. Once it is so determined, any incidental trenching on the field reserved to the other Legislature is of no consequence. The Court has to look at the substance of the legislation. Regard must be had to the enactment as a whole, its main objects, to the scope and effect of its provisions. Incidental and superficial encroachments are to be disregarded. The predominance of the Union List would not prevent the State Legislature from dealing with any matter within List II, though it may incidentally affect any item in List I. The precedence of List I do not necessarily mean that the State is precluded from dealing with any matter in List II though it may incidentally entrench any items in List I. The legislation in the field of taxation and economic activities need special consideration and are to be viewed with more flex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecisions of the Constitution Benches as Hingir Rampur, Tulloch, India Cement, and Kesoram respectively. An extensive review of the entire law on the subject is taken in Kesoram. Almost all the decisions on the subject till then, also the ones the petitioners have relied upon, are discussed in Kesoram. As many as one hundred and fifty five decisions were cited and discussed in Kesoram. 16. The decision in the case of Kesoram was rendered by the Constitution Bench of five learned Judges. The majority decision was rendered by Justice R.C. Lahoti J (as his lordship then was) on behalf of V.N. Khare, C.J., B.N. Agrawal, J. Dr. A.R. Lakshmanan, J., and himself. S.B. Sinha, J. delivered a dissenting judgment. A batch of matters, appeals and writ petitions, was filed in the Apex Court raising question concerning the Entries 52, 54 and 97 in List I and Entries 23, 49, 50 and 66 in List II of the Seventh Schedule. Kesoarm dealt with earlier constitution Bench decisions, distinguished them and by a majority decision dated 15 January 2004 laid down various propositions of law, which have a direct bearing on the case at hand. 17. Petitioner contends that Kesoram should not be relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. State of W.B.5 Quite apart from the fact that there are pending proceedings in this Court seeking to reconcile the judgment in Goodricke with that in State of Orissa v. Mahanadi Coalfields Ltd.6 we find some difficulty in accepting as correct the view taken by Goodricke particularly having regard to the earlier decision (of a Bench of two learned Judges) in Buxa Dooars Tea Co. Ltd. v. State of W.B.4 We think, therefore, that these matters should be heard by a Constitution Bench. The papers and proceedings may, accordingly, be placed before the Hon'ble the Chief Justice for appropriate directions. Accordingly, several petitions and appeals were placed before the Constitution Bench. The issue centered around Entries 52, 54 and 97 in List I and Entries 23, 49, 50 and 60 in List II of the Seventh Schedule to the Constitution so also the residuary power of legislation vested in the Union. 20. The matters were grouped into four groups. Coal matters, Tea matters, Brick earth matters, and Minor mineral matters. The basic constitutional question in all the groups was the same, and they were heard together. In the Coal matters, the Calcutta High Court had struck down a lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enact the impugned law and levy the impugned cess. Again this is Similar to the challenge raised before us. 22. Kesoram referred to and restated the law regarding ambit of Article 245 of the Constitution. After an elaborate discussion on this aspect, which we have already referred to. To repeat, Kesoram stressed that since there are various entries in the three Lists, there is bound to be some overlap and in such a situation the doctrine of pith and substance has to be applied. It held that the Court should ascertain the real character of the legislation in question. Kesoram also underscored the need to consider the legislation in the field of taxation and economic activities as deserving special consideration. Kesoram reiterated the settled principle that the measure employed for assessing tax is not to be confused with the nature of the tax. The amount may be measured in many ways, but there is a distinction between the subject matter of a tax and the standard by which the amount of tax is measured. It referred to the settled principle, that every effort must be made as far as possible to reconcile the seeming conflict between the State legislation and the Parliamentary legis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Tulloch was only adjudicating upon the issue whether the liability to pay cess under the provisions of the Act would be enforced under the MMDR Act. Secondly, the question whether the Central Act excluded the power to legislate by the States was not a question dealt with in-depth as it was done in Hingir Rampur. Thirdly, it held that Tulloch needs to be read in its entirety, otherwise extracting sentences from here and there conveys an incorrect impression 24. Kesoram specifically dealt with Section 13, 18 and 25 MMDR Act and held that power of taxation could not be inferred by implication and there must be a charging section specifically empowering to levy the tax. Kesoram held that in fact, the view taken by it does not run counter to the principle of law laid down in Tulloch. It observed that in Hingir Rampur and Tulloch, the levy was being collected for development of mining areas in the State and the power to regulate and develop, would not include the power to levy tax and fee, which power shall have to be traced to some other entry in List I. Kesoram referring to Article 265 held that power to tax is not a residuary power and there is nothing like implied power to tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught to be justified under Entry 45 in List II by including it within the meaning of land revenue, and in the alternative under Entry 49 in List II as tax on lands. The challenge to the constitutional validity of the levy was upheld. We would briefly state the reasoning which prevailed with the learned Judges. 53. G.L. Oza, J. delivered a separate concurring opinion. The majority opinion expressed through Sabyasachi Mukharji, J. (as his Lordship then was), first clarified the distinction between 'royalty' and 'land revenue'. 'Land revenue' is connotative of the share in the produce of land which the king or the Government is entitled to receive. 'Royalty' is a charge payable on the extraction of minerals from the land. A cess on royalty cannot, therefore, be called additional land revenue and as such the State was disabled from imposing tax on royalty. There is a clear distinction between 'tax directly on land' and 'tax on income arising from land'. Royalty is indirectly connected with land and a cess on royalty cannot be called a tax directly on land as a unit. The levy could also not be sustained under Entry 50 in List II which d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 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 but to enact it validly . The ratio of the decision of the Mysore High Court is that provision for licenses and license fees, operating in the field of regulation of mines and minerals is not available to be made by State legislation - in view of the declaration in terms of Entry 54 in List I. Thereafter, after considering the issue whether the royalty is a tax Kesoram discussed the regulation and control and whether the general power which includes the power of taxation. In this context also, Kesoram dealt with the decisions in Hingir Rampur Coal Co. Ltd., and M.A. Tulloch and Co., in detail. Kesoram categorically held that the whole field of regulation under the provisions of the MMDR Act could not be said to be reserved for the Parliament. 26. When Kesoram evaluated India Cement, it is elementary that it was fully conscious that it was dealing with a decision of seven learned Judges. Kesoram was considering three questions. Firstly, whether royalty on mineral could be considered as a tax; secondly, whether Entry 54 in List I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to examine the decisions post India Cement. The decisions in the State of Orissa vs. Mahanadi Coalfield Ltd. 1995 Supp (2) 686 and Buxa Dooars Tea Co. Ltd. vs. State of West Bengal (1989) 3 SCC 211 were also distinguished. Kesoram, after distinguishing these two decisions and other decisions, did an analysis of Goodricke Group Ltd. Kesoram, thus after having made an independent review of several decisions and several legal principles, held that Goodricke Group Ltd.'s case was correctly decided and law laid down therein is correct, and the decision in India Cement was thus distinguished. 29. Kesoram ruled that its conclusion was in line with the decision of Synthetics Chemicals Ltd. that in the field occupied by the Union for regulation and control, the power to levy tax is available to the State so long as it does not interfere with the regulation, which is the power occupied by the Union. Thus to repeat, the contention of the Petitioner that Kesoram does not distinguish Synthetics Chemicals Ltd. and is contrary to, it is incorrect by the position declared by Kesoram itself. Kesoram also referred to Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan AIR 1962 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious entries in different lists and Schedule VII. The Division Bench held that Kesoram could not be held to be per incuriam. The Division Bench held that the power under Entry 50 of List II of Seventh Schedule is not affected by Section 15 or Section 13 of the MMDR Act. The Division Bench held that the State of Rajasthan was competent to levy environment and health cess on mineral rights under Entry 50 of List II of the Constitution of India. The Division Bench relied upon the decision in Kesoram, more particularly the observations therein that the doctrine of occupied field applies when there is a clash between the Union and the State Lists within an area common to both and incidental and superfluous encroachments are to be disregarded. The Division Bench in Madhyabharat Phosphate observed thus: 41. Merely by the fact that certain provisions have been made with respect to protection of environment and health of the workers and a reclamation of the area in the Act of 1957 and which have been pressed into service by Mr. M.S. Singhvi, learned Sr. Counsel, it cannot be said that the State is denuded of its power to enact the provisions contained in Chapter VII of the Finance Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not unconstitutional. Thus, the regulation of mines and minerals vesting in the Union Govt. in MMDR Act, 1957 the Act of 1952 and Rules of 1955 and Rules of 1988 relied upon by Mr. M.S. Singhvi, learned Senior Counsel, appearing on behalf of the petitioners, could not have come in the way of the State to enact the impugned provision in question, as it does not either impinge upon regulation of mines and mineral development or upon control of industry by the Union. The State is augmenting its revenue resources for the purpose of environment and health. The power to tax the mineral rights is with the State. The power to curtail the exercise of such power is with the Union. This is the result achieved by homogeneous reading of Entry 50 in List II and Entries 52 and 54 in List I. So long as a tax or fee on mineral rights remains in pith and substance a tax for augmenting the revenue resources of the State or a fee for rendering services by the State and it does not impinge upon regulation of mines and mineral development or upon control of industry by the Central Government, it is not unconstitutional. The Division Bench, repelling an identical challenge raised in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decisions of both Kesoram and India Cement were before the Bench of three learned Judges of the Apex Court. As the order shows, the matter was heard for a considerable length of time and thereafter the reference was made. Petitioner sought to make capital of the fact that the Bench prima facie observed that there might be a conflict. The Bench, in Mineral area Development Authority, did not straightaway conclude that Kesoram was per incuriam and that India Cement being of the Larger Bench it will have to be followed. Thus the legal position is far from obvious as the Petitioner makes out to be. Even the Division Bench of the Rajasthan High Court has held that the decision in the case of Kesoram cannot be held to be per incuriam of India Cement. The decision of the Division Bench was sought to be distinguished by the Petitioners contending that the Division Bench has not considered the various aspects of the case more particularly, the binding effect of India Cement. This is not correct. The decision of India Cement was referred to by the Division Bench. No decision of any court taking a view that the decision of constitution bench in Kesoram is not a good law, is shown to us. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from its ultimate or incidental results or consequences, for determining the character of the levy. A levy essentially in the nature of a tax and within the power of State Legislature cannot be annulled as unconstitutional merely because it may affect the price of the commodity. 35. Kesoram further goes on to hold as follows. A State legislation, which makes provisions for levying a cess, whether by way of tax to augment the revenue resources of the State or by way of fee to render services as quid pro quo but without any intention of regulating and controlling the subject of the levy, cannot be said to have encroached upon the field of 'regulation and control' belonging to the Central Government by reason of the incidence of levy being permissible to be passed on to the buyer or consumer, and thereby affecting the price of the commodity or goods. Entry 23 in List II speaks of 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. Entries 52 and 54 of List I are both qualified by the intention declared by Parliament by law to be expedient in the public interest. Legislati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trol of the Union. 50. Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development. 56. Taxes on goods and passengers carried by road or on inland waterways. 66. Fees in respect of any of the matters in this List, but not including fees taken in any court. Entry 6 relates to Public health and sanitation; hospitals and dispensaries, Entry 13 relates to communications, that is, roads, bridges, ferries, and other means of communication not specified in List I, municipal tramways; ropeways; inland waterways and traffic thereon subject to the provisions of List I and List III with regard to such waterways; vehicles other than mechanically propelled vehicles. Entry 23 is regulation of mines and mineral development, subject to the provisions of List I concerning regulation and development under the control of the Union. Entry 50 is taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development. Entry 56 is taxes on goods and passengers carried by road or on inland waterways. Entry 66 deals with fees in respect of any of the matters in this List, but not including fees taken in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ylon and other plastic goods, such as, P.V.C., Polystyrene which are not capable of being destroyed by action of living beings; (g) prescribed means prescribed by rules made under this Act; (h) Schedule I means Schedule I appended to this Act; (i) Welfare Administrator means an officer appointed by the Government under section 6 of this Act. 3. Levy and collection of cess.-- (1) With effect from such date as the Government may, by notification in the Official Gazette, appoint, there shall be levied and collected from the owner a cess on all carrier transporting material and at such rates as specified in (2) The Government may, from time to time, by notification in the Official Gazette, revise the items and the rates of cess by amending Schedule I. 4. Application of proceeds of cess.-- An amount equivalent to the proceeds of cess levied under this Act, reduced by the cost of collection as determined by the Government in the prescribed manner together with any income from investment of the said amount and any other moneys received by the Government for the purposes of this Act shall, after due appropriation made by the State Legislature by law, be utilized by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de, 1860 (Act 45 of 1860). (3) Any Inspecting Authority or Welfare Administrator may-- (a) with such assistance, if any, as it thinks fit enter at any reasonable time, any place which he considers it necessary for carrying out the purposes of this Act; and (b) do within such place anything necessary for the proper discharge of his duties. 7. Publication of annual report of activities financed under the Act.-- The Government shall, as soon as may be, after the end of each financial year, cause to be published in the Official Gazette a report giving an account of the activities financed under this Act during the previous financial year, together with a statement of accounts. 8. Power to make rules.-- (1) The Government may, by notification in the Official Gazette and subject to the condition of previous publication, make rules for carrying into effect the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for:-- (a) the assessment and collection of cess levied under this Act; (b) the period within which the cess shall be payable to the Government; (c) the determination of the cost o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any offence punishable under this Act or any rule made thereunder may, either before or after the institution of the prosecution, be compounded by the person authorised under section 10 to make a complaint to the court with respect to that offence, on payment to that person, for credit to the Government of such sum as that person may specify not exceeding rupees twenty thousand. (2) Where an offence is compounded under sub- section (1), no proceeding or further proceeding, as the case may be, shall be taken against the offender in respect of the offence so compounded. 13. Recovery of certain sums as arrears of land revenue.-- Any sum due to the Government under this Act or the rules made thereunder may, on a certificate of such officer as may be specified by the Government in this behalf by general or special order, be recovered in the same manner as an arrear of land revenue. 14. Rules and notifications to be laid before State Legislature.-- Every rule made and every notification issued by the Government under this Act shall be laid, as soon as may be after it is made or issued, as the case may be, before the State Legislature. 15. Power to revise.-- The Government may, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of public roads, erection of tree barriers for arresting the dust levels. The cess can also be used to meet the allowances, if any, of the members of the Advisory Committee. Section 5 constitutes an Advisory Committee to advise the State on the matters arising from the administration of the Act. The appointment of Inspecting Authority, Welfare Administrator and their powers is dealt with under Section 6 of the Act. Section 7 contemplates the publication of an annual report of activities and the powers to frame the rules is referred to under Section 8. Sections 9 to 12 deal with the penalties and offenses. The recovery of sums due to the Government under the Act can be recovered as arrears of land revenue. The Schedule I lists the material, they are iron ore, manganese ore, bauxite ore, coal, coke, sand, murrum, debris other than the local self-Government Authority debris, garbage other than local self-Government Authority garbage, packaged water, and any other items as notified by the Government from time to time. Schedule I lays down the rates of cess which is per metric ton for ore, coal, coke, debris, sand, murrum. For plastic bottles and plastic packets, it is as per bottle a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and its ill-effects and need to augment raise additional resources for the improvement of infrastructures and health affected by the transportation. It is true that the majority of the items listed in the Schedule I are minerals. However, Schedule I does not contain only minerals but it also contains debris, garbage, and plastic waste. The Petitioner contends that the impugned Act is mineral centric and not transportation-centric and it targets the mineral and not the transportation. This contention is not correct. Schedule I lists various items, some of them are minerals. The Petitioner entirely ignores that plastic, garbage, debris are also included in the Schedule. Merely because most of the goods transported are minerals, does not mean that the minerals are targets of the levy. The argument advanced by the Petitioner is that the inclusion of debris, garbage, packaged water is ornamental. There is no substance in this contention. If the State wanted to deal with the problems and transportation and its ill-effect and augment its revenue, it would have to deal with the transportation which occurs in its common form. It may be that the majority of the transportation that takes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deal with the composition and functioning of the Advisory Committee. The Schedule to the Rules contains receipts and forms specified. By the notification dated 13 May 2008, the charges levied on the scheduled items were revised. 45. Now turning to the Union legislation. The MMDR Act contains seven Chapters. The Act is to provide for the development and regulation of the mines and minerals under the control of the Union. First Chapter deals with the short title, declaration, and definition. Section 2 contains a declaration as to the expediency of Union control. Section 2 declares that it is expedient in the public interest that the Union should take its control of regulation of mines and the development of minerals. Section 2 specifies that the declaration is to the extent hereinafter provided in the Act. Section 3 inter alia provides for the definitions. Leased area is defined as an area within which mining operations can be undertaken. Minerals have been defined as all minerals except mineral oils which means natural gas and petroleum. Mining lease has been defined and so also the mining operations. Chapter II places general restrictions on undertaking prospecting and mining op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) the matters which may be considered where applications in respect of the same land are received on the same day; [(d) the terms and conditions of auction by competitive bidding, the details of mines and their location, the minimum size of such mines and such other conditions which may be necessary for the purpose of coal mining operations including mining for sale by a company under sub-section (1) and sub-section (2) of section 11A;] (e) the authority by which [reconnaissance permits, prospecting licences or mining leases] in respect of land in which the minerals vest in the Government may be granted; (f) the procedure for obtaining [a reconnaissance permit, a prospecting licence or a mining lease] in respect of any land in which the minerals vest in a person other than the Government and the terms on which, and the conditions subject to which, such [a permit, licence or lease] may be granted or renewed; (g) the terms on which, and the conditions subject to which, may other [reconnaissance permit, prospecting licence or mining lease] may be granted or renewed; (h) the facilities to be afforded by holders of mining leases to persons deputed by the Government for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 9C; (qqc) the composition and functions of the National Mineral Exploration Trust under sub-section (3) of section 9C; (qqd) the manner of payment of amount to the National Mineral Exploration Trust under sub-section (4) of section 9C; (qqe) the terms and conditions subject to which mining leases shall be granted under sub-section (3) of section 10B; (qqf) the terms and conditions, and procedure, subject to which the auction shall be conducted including the bidding parameters for the selection under sub-section (5) of section 10B; (qqg) the time limits for various stages in processing applications for grant of mining lease or prospecting licence-cum-mining lease under sections 10B, 11, 11A, 11B, and section 17A, and their renewals; (qqh) the terms and conditions for grant of non-exclusive reconnaissance permits under sub-section (1) of section 10C; (qqi) the terms and conditions for grant of prospecting licence-cum-mining leases under sub-section (6) of section 11; (qqj) the terms and conditions, and procedure, including the bidding parameters for the selection under subsection (6) of section 11; 1[(qqja) the terms and conditions and amount or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilitation of flora and other vegetation such as trees, shrubs and the like destroyed by reason of any quarrying or mining operations shall be made in the same area or in any other area selected by the State Government (whether by way of reimbursement of the cost of rehabilitation or otherwise) by the person holding the quarrying or mining lease; (j) the manner in which and the conditions subject to which, a quarry lease, mining lease or other mineral concession may be transferred; (k) the construction, maintenance and use of roads power transmission lines, tramways, railways, aerial ropeways, pipelines and the making of passage for water for mining purposes on any land comprised in a quarry or mining lease or other mineral concession; (l) the form of registers to be maintained under this Act; (m) the reports and statements to be submitted by holders of quarry or mining leases or other mineral concessions and the authority to which such reports and statements shall be submitted; (n) the period within which and the manner in which and the authority to which applications for revision of any order passed by any authority under these rules may be made, the fees to be paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respective leaseholds after the payment of processing fee. Chapter IV deals with storage of mineral. Chapter V deals with the transportation and winning of mineral. Rule 17 deals with regulation of transport and extraction and mandates for carriers used for transportation of the minerals shall be registered. Registration fee is contemplated under Rule 20. The procedure for registration of carriers is specified under Rule 47. All carriers are mandated to install tracking devices. Chapter VI deals with establishment of check post, barrier and weighbridge and inspection of mineral in transit. The Scheme of Rules of 2013 indicates the purpose for which they were enacted. These Rules framed under Section 23C of the Act of 1957 address the concern of illegal sale and transportation of mineral to third party for carrying out mining and transportation activities. These Rules thus are framed to keep a check on the illegal mining activities and illegal transportation. These Rules have nothing to do with the effect of transportation in the State on the general public. Rules of 2013 thus are for regulating the illegal activities of the leaseholders and transporters. 49. Petitioner refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Finance Act, 2008 and the rules framed thereunder with the aforesaid legislation, as the Apex Court has laid down that despite the fields of legislation having been demarcated, the question of repugnancy between law made by Parliament and a law made by the State Legislature may arise only in cases when both the legislations occupy the same field with respect to one of the matters enumerated in the Concurrent List and if a direct conflict is seen. If there is a repugnancy due to overlapping found between List II on the one hand and List I and List III on the other, the State law will be ultra vires and shall have to give way to the Union law. Where there are three Lists containing a large number of entries, there is bound to be some overlapping among them but the Entries In List I and List II must be so construed as to avoid any conflict. If there is no conflict, an occasion for deriving assistance from non-obstante clause subject to as enumerated in Article 245(1) of the Constitution does not arise. If there is conflict, the correct approach is to find an answer to three questions step by step, (i) Whether it is still possible to effect a reconciliation betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rriers. The levy under the State Legislation is thus meant for the welfare of the villagers, and improving their health, as also water supply, and public roads. The State Legislation does not seek to regulate or control mines and mineral development. 52. This issue, dealing with the similar enactment, is dealt with in the following passage in Kesoram where it deals with Hingir Rampur, as under. 145. The following observations of the Constitution Bench in Hingir Rampur Coal Co. [AIR 1961 SC 459: (1961) 2 SCR 537] squarely apply to the SADA Act and the SADA Rules for upholding their constitutional validity: (AIR p. 473, paras 35-36) [I]n pith and substance the impugned Act is concerned with the development of the mining areas notified under it. The Central Act, on the other hand, deals more directly with the control of all industries including of course the industry of coal. The functions of the Development Councils constituted under this Act prescribed by Section 6(4) bring out the real purpose and object of the Act. It is to increase the efficiency or productivity in the scheduled industry or group of scheduled industries, to improve or develop the service that such indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s can be justified as fee as well. The term cess is commonly employed to connote a tax with a purpose or a tax allocated to a particular thing. However, it also means an assessment or levy. Depending on the context and purpose of levy, cess may not be a tax; it may be a fee or fee as well. It is not necessary that the services rendered from out of the fee collected should be directly in proportion with the amount of fee collected. It is equally not necessary that the services rendered by the fee collected should remain confined to the persons from whom the fee has been collected. Availability of indirect benefit and a general nexus between the persons bearing the burden of levy of fee and the services rendered out of the fee collected is enough to uphold the validity of the fee charged. The levy of the impugned cess can equally be upheld by reference to Entry 66 read with Entry 5 of List II. The Petitioner's contention that there must be a direct nexus between the fee levied and the benefits rendered, is not correct. Such exact proportion and direct links are not necessary. Services rendered is not a condition precedent, nor it is confined to the contributors alone. A broad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. The varying degree also has a nexus to the different impositions. It is not that the levy is extracted compulsorily from all in the State to pay for the services rendered. 58. Sufficient evidence placed on record of spending the money, both on road infrastructure and welfare activities. It cannot be said that the Petitioners do not benefit at all from the services rendered and that there is not even a remote connection. The Goa Cess Act and the Rules are a device for the State to augment its resources. The services rendered by the collection of the levy benefits the Petitioner as well, and there exists a co-relationship. Therefore, the Goa Cess Act and the Rules, whether it imposes a tax or fee, cannot be said to be unconstitutional. Kesoram holds that it is immaterial if the nature of the impost is fee or tax, if both could be justified and it is not necessary that one of the pleas must be given up. It is not necessary to direct the State to choose whether the levy is a fee or tax. This distinguishing is only academic as far as legislative competence of the Goa Cess Act is concerned. It needs to be noted that by Notification dated 6 April 2016 the levy where royalty is pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of India. There is no embargo in these Articles per se to bring in legislation with retrospective effect. In National Agricultural Coop. Marketing Federation of India Ltd. v. Union of India (2003) 5 SCC 23 the Supreme Court has held that there is no fixed formula for the expression of legislative intent to give retrospectively to an enactment. It observed that sometimes this is done by providing for jurisdiction where jurisdiction had not been appropriately invested before. Sometimes this is done by re-enacting a valid and legal taxing provision retrospectively and then by fiction making the tax already collected to stand under the re-enacted law. 64. Section 3 of the Goa Cess Act provides that with effect from such date as the Government may by notification in official Gazette appoint there shall be levied and collected from the owner, cess on all carriers transporting minerals and, on such rates, as specified in Schedule I. On plain reading there is thus no embargo under Section 3 to levy cess from an anterior date. Section 3(1) provides that with effect from such date as the Government may by notification in the official gazette appoint, there shall be levied and collect ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
