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news details
Efforts on to settle issue of royalty recovery: Centre To SC
3/20/2025 11:17:04 PM
New Delhi, Mar 20:
Agencies

The Centre on Thursday told the Supreme Court that it was making efforts to resolve the issue of recovery of royalty and tax dues on mineral rights and mineral-bearing lands between it and several mineral-rich states.
The top court meanwhile deferred to April 24 the hearing on subsequent pleas of several mineral-rich states like Jharkhand seeking to recover royalty and tax dues on mineral rights and mineral-bearing lands worth thousands of crore of rupees from the Centre and the mining firms.
A special three-judge bench comprising Justices Abhay S Oka and MM Sundresh and Ujjal Bhuyan said it will decide on the sequence in which the pleas of several mineral-rich states would be heard.
Solicitor General Tushar Mehta, appearing for the Centre, said efforts were on to find a settlement of the issue and the pleas may be listed in the first week of May.
Senior advocate Rakesh Dwivedi, appearing for Jharkhand, said a settlement can be arrived at any stage and the hearing should not be delayed.
On July 25, 2024, a nine-judge bench headed by the then Chief Justice D Y Chandrachud (since retired), in a majority 8:1 verdict, had ruled that the legislative power to tax mineral rights vests in states and not Parliament.
In a subsequent order on August 14, the top court clarified that the judgement will not have prospective effect and permitted mineral-rich states recover from the Centre and mining firms the royalty and tax dues on mineral rights and mineral-bearing lands worth thousands of crore of rupees since April 1, 2005 over a period of 12 years.
Later, a special bench headed by Justice Oka was set up to resolve the subsequent dispute between several states and the Centre.
Dwivedi had urged the bench to allocate states’ pleas relating to recovery of dues and the legal impediments in realising them to a bench.
Post the July 25, 2024 judgement that held that the states have the power to levy tax and royalty, Dwivedi had referred to legal impediments coming in the way of Jharkhand in levy tax on minerals and mineral-bearing lands.
He had said one issue still remained and that was Jharkhand’s law to collect royalty on minerals and mineral-bearing land, which was set aside earlier, needed to be upheld now.
“Unless the Act is declared valid, we cannot collect taxes on minerals and mineral-bearing land. Please list it expeditiously before the appropriate bench,” Diwvedi had said.
He had referred to a decision of the Ranchi bench of the Patna High Court that had struck down Section 89 of the Mineral Area Development Authority Act of 1992 vide its judgment dated March 22, 1993.
Section 89 of the Mineral Area Development Authority Act empowered the state government of then undivided Bihar to levy tax on not only mineral-bearing land but also land used for commercial or industrial purposes.
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.
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