The imposition of penalty under Rule 26(3)(ii) of the Andhra Pradesh Minor Mineral Concession Rules, 1966, as amended in 2016, is a penal offense triable only by a Court of competent jurisdiction.

ORDER :

D.V.S.S. Somayajulu, J.

1. This writ petition is filed by the petitioner seeking a relief of mandamus against the issuance of the show-cause notice, date 15.4.2020, by which the petitioner was demanded to pay a certain sum of money representing the seigniorage fee, market value and penalty, failing which it was stated that necessary action will be initiated.

2. There is an express reference to Rule 26(3) of the Andhra Pradesh Minor Mineral Concession Rules, 1966 (in short "the Rules") in this notice, which was last amended in March, 2016 and it is therefore contended that the notice itself is untenable in law. The learned Government Pleader for Mines and Geology has filed his counter and opposed the prayers.

3. Since the pleadings are completed the writ petitions were taken up for hearing with the consent of both the Counsels.

4. This Court has heard Sri N. Vijay, learned Counsel for petitioner and the learned Government Pleader for Mines and Geology.

5. Sri N. Vijay, learned Counsel for the petitioner has essentially raised two main questions in this writ petition. According to him Rule 26(3) of the Rules, as amended in 2016, made the unaccounted consumption or possession of minerals without proof of payment of revenue a penal offense and so this sort of levy/penalty can only be imposed after a due/proper trial like a sentence by the Court of Law and not by an officer of the Department. He argues that the show-cause notice is without jurisdiction and is liable to be quashed. He also argues that the show-cause notice is issued on the basis of the estimation based on the electricity consumption charge which is a very unscientific method of assessing the alleged quantity of minor mineral for which fee has not been paid. He, therefore, argues that without the application of mind or on a scientific basis the show-cause notice has been issued. Apart from that he also raised an issue that the records could not be produced as they were with the GST Department and that ulterior and for political motives a show-cause notice has been issued. He also relied upon L. Venkateswara Rao v. Singareni Collieries, 1993 (3) ALT 199, wherein it was held that Rule 26(2) of the Rules, 1966 was held to be valid and it was meant to be used only against bulk users or consumers. He also relies upon the judgment of a Division Bench of this Court, reported in Sreerama Oil Company v. Commissioner of Commercial Taxes, 2006 (143) STC AP (Page 18), wherein the action of the Commercial Tax authorities in assessing the turnover on the basis of consumption of electricity was struck down. The ratio of the case before the Division Bench, according to the learned Counsel, was applicable in principle to the present set of facts.

6. Learned Government Pleader for Mines and Geology argues that the petitioner has already challenged the show-cause notice in WP No. 8361 of 2020 and obtained an interim order. He also argues that the petitioner did not furnish the records as demanded. He also states that an inspection was held on 4.12.2019 and that on 23.12.2019 a request was made for the production of various records but the same was not done. In these circumstances, the learned Government Pleader for Mines and Geology submits that the alternative method for calculation had to be adopted basing on the electricity consumption. Learned Government Pleader also submits that Rule 8(IV) of A.P. Mineral Dealers License 2017 authorizes the imposition of penalty as per the provisions of Rule 23(3) of the Rules. He submits that the show-cause notice by itself cannot be challenged and that since there is an effective alternative remedy the writ itself is not maintainable. Therefore, he prays that the writ petition should be dismissed.

Court:

7. The primary contention urged by the learned Counsel for the petitioner is that Rule 26(3)(2) of the Rules talks of imposition of penalty and imprisonment which may extend to two years or with fine which may extend to Rs. 5,00,000/- alongwith t