The center disagreed on July 31 with mineral-rich state of India who had petitioned against the refund of royalty levied by it on mines. And mineral-bearing land since 1989 because any such order for payment in arrears would have “multi-polar” effect.
A crucial verdict was made by a nine-judge bench, led by Chief Justice D.Y. Chandrachud, on July 25; in majority of 8:1; that is, legislative power to impose tax on mineral rights rests with states and royalty paid on minerals is not a tax.
Though some opposition-ruled mineral-bearing states urged the apex court to apply the judgement with retrospective effect so that they could claim back refunds from the central government.
However, the Centre opposes any such order saying it will have a “multipolar impact”.
Many companies operating in mining business express their support for refunding of royalties to mineral bearing states as advanced by government.
Solicitor General Tushar Mehta appearing for Centre said BJP ruled states like Madhya Pradesh. And Rajasthan had sought prospective application of judgment. The hearing is underway.
This was contained in a 200-page majority ruling that was written by him (CJI) for himself and Justices Hrishikesh Roy, Abhay S. Oka, J.B. Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma and Augustine George Masih.
“Royalty does not amount to a tax. Royalty is a consideration paid under contract by the mining lessee to the lessor for enjoyment of mineral rights. The payment obligation arises from contractual terms embodied in the mining lease itself. No doubt there are payments recoverable as arrears but these cannot generally be regarded as taxes simply. Because they are prescribed by statute,” reads part of its opinion as contained in the majority verdicts report.
However, Justice B.V. Nagarathna had dissented and said the Centre has power to levy royalty.
