SC to Consider Mineral Royalty Petitions

New Delhi, Nov 27 (PTI) The Supreme Court on Thursday said it will take a decision on the listing of pleas before a bench related to levy of tax on mineral rights.

On July 25, 2024, a nine-judge constitution bench headed by the then Chief Justice D Y Chandrachud, by a majority 8:1, held that the legislative power to tax mineral rights vests with the states and the royalty paid on minerals is not tax.

The verdict, which gave a huge revenue boost to mineral-rich states, also held that Parliament does not have the legislative competence to tax mineral rights under Entry 54 of List I of the Constitution which pertains to regulation of mines and mineral development by the Centre.

On Thursday, a bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi was told by a lawyer that after that verdict of the nine-judge bench, many individual petitions of various states are yet to be listed before a bench for adjudication.

Solicitor General Tushar Mehta, appearing for the Centre, opposed the submission saying that the central government has filed a curative petition against the July 25, 2024 judgement.

These individual petitions can only be listed after the Centre's curative plea is adjudicated upon, the top law officer said.

"Whether we win or lose... Everything will depend on the outcome of the curative petition," he said.

"Let me see the records. I will take a call," the CJI said.

Earlier on September 23, the Centre informed the apex court of having filed a curative petition after the nine-judge bench's 8:1 majority verdict.

The top court last year dismissed the pleas seeking review of its July 25, 2024 verdict.

The verdict had come as a setback to the Centre and held Parliament could still legislate to impose "any limitations" on power of states to levy tax on mineral rights.

Justice B V Nagarathna, in her dissenting verdict, said royalty was in the nature of a tax or an exaction and the Centre does have the power to levy it.

On August 14 last year, in a major victory for mineral-rich states, the top court had allowed them to recover from the Centre and mining companies 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.

It said the time for payment of the demand of tax by the states shall be staggered in installments over a period of 12 years commencing from April 1, 2026.

The bench further said bearing in mind the consequences that would emanate from the past, it has imposed the conditionalities and directed that the levy of interest and penalty on demands made for the period before July 25, 2024 shall stand waived for all the assessees.