Supreme Court dismisses petitions to review mineral royalty verdict

The Supreme Court has dismissed petitions seeking review of a Constitution Bench verdict that had stated royalty paid by mining operators is not a tax.

The Supreme Court’s dismissal decision, upheld by a majority of 8-to-1, gives states the power to collect royalty and tax dues on mineral rights since April 1, 2005. The decision has significant monetary implications for mining firms in the public as well as private sector, with mineral-rich states such as Jharkhand, Chhattisgarh, Odisha, Karnataka, Rajasthan and Andhra Pradesh standing to benefit in a big way.

The Centre had filed a petition in September claiming “errors apparent in the judgment” by a nine-judge bench of the apex court, and seeking a review. In its review petition, the Centre said that “land, as a concept, is to include everything under sun, it would thereby empower the States to legislate on any subject in the name of legislation on land and buildings. The same would be a constitutional anathema and is an error apparent on the face of the record”.

The nine-judge bench headed by Chief Justice DY Chandrachud, in an 8-to-1 majority, had on July 25 passed the verdict that legislative power to tax mineral rights lay with the states and not Parliament. Subsequently on August 14 this year, the Supreme Court had permitted mineral-rich states to recover royalty and tax dues on mineral rights and mineral-rich lands since April 1, 2005, which were worth crores, over a period of 12 years from the central government and mining firms.