JUDGMENT

PARIPOORNAN, J. :—The State of Orissa and the authorities in the Mines Department of the State are the appellants in this batch of appeals. M/s. Mahanadi Coalfields Ltd., a Government company, in whom the lands in question vests in accordance with Section 11 of the Coal Bearing Areas (Acquisition and Development) Act, 1957 (Central Act 20 of 1957), and Union of India are the respondents in the main appeal. In the other appeals, the consumers of coal who purchase coal from Mahanadi Coalfields Ltd. for their own consumption as well as some traders in Coal are the respondents. The Mahanadi Coalfields Ltd., the consumers of coal who purchase coal from Mahanadi Coalfields Ltd., and some traders in coal assailed the validity of the Orissa Rural Employment, Education and Production Act, 1992 (Orissa Act 36 of 1992), as amended, hereinafter referred to as the Act, before the High Court of orissa in a series of writ petitions. The main controversy in the cases was regarding the levy of tax under the Act on "coal bearing lands". By a common Judgment dated 26-4-1994* the Division Bench of the High Court held that the State Legislature did not have the competence to levy the tax on coal bearing lands and struck down Section 3(2)(c) of the Act as well as the schedule attached to the Act levying tax of Rs. 32,000/- per acre on coal bearing lands and also the consequential demand notices and certificate proceedings. As a sequel thereto, the demands raised by Mahanadi Coalfields Ltd. against the traders and consumers on account of additional burden of tax on lands were also quashed. The High Court also took the view that the levy would be hit by Section 9A of Mines and Minerals (Regulation and Development) Act, 1957, (Act 67 of 1957) hereinafter referred to as M.M.R.D. Act and the levy is also discriminatory and hit by Article 14 fo the Constitution of India. The question of passing on the burden by Mahanadi Coalfields Ltd. was left open, though the High Court opined that if the tax is on lands, the burden cannot be passed on to the consumer or the trader. A few other pleas taken up by the petitioners were also negatived. The High Court allowed the batch of writ applications. In S.L.P.(C) Nos. 12477-12751 of 1994, by an order dated 10-1-1995, a three Member Bench of this Court granted leave to appeal to the State of Orissa against the aforesaid Judgment of the High Court dated 26-4-1994. Apart from the competence of the Orissa Legislature to enact the law, M/s. Mahanadi Coalfields Ltd. raised various other pleas to assail the levy under Orissa Act 36/ 1992 as invalid. Important among such pleas, involved interpretation of Article 285 of the Constitution read with Ss. 9, 10 and 11 of Coal Bearing Areas (Acquisition and Development) Act. 1957 and the provision of Colliery Contract Order framed u/S. 3 of the Essential Commodities Act. The said pleas were negatived by the High Court by the same common judgment of 26-4-1994 and M/s. Mahanadi Coalfields Ltd. have come up in appeals against that portion of the judgment, which repelled their pleas aforesaid, amongst others. The appeals so filed are C.A. Nos. 42-43/94, 605/95 and 2660-2932/95. Accordingly the above Civil Appeals and special leave petitions have come up before this bench for hearing.

#Reported in AIR 1994 Orissa 258

2. We heard counsel for the appellants Sri B. Sen, Senior Advocate and counsel who appeared for the respondents, the learned Attorney General of India Sri M. K. Banerjee, Senior counsel Sri Shanti Bhushan, Sri A. K. Ganguli and others. Sri B. Sen, learned counsel who appeared for the appellants contended in the main that the High Court was in error in holding that Orissa Rural Employment, Education and Production Act, 1992, is without legislative competence and is also discriminatory and hit by Art. 14 of the Constitution of India. It was argued :

(a) That the levy of tax in the instant case would squarely fall under Entry 49, List II of the Seventh Schedule (Taxes on