Point of Law: Power of State Governments to make rules in respect of minor minerals and rules for preventing illegal mining, transportation and storage of minerals - State Government has no legislative competence to make rules for levy of transportation fee or charge on minerals lawfully excavated in other States, it is not necessary for us to go into question of quid pro quo regarding existence of co-relation between fees collected and services being rendered

ORDER :

The main issue involved in these writ petitions is:

“Whether the State Legislature has legislative competence to enact sub Rule (7) of Rule 42 of the Karnataka Minor Mineral Concession Rules, 1994, authorizing collection of entry fee from a person who transports certain category of minor minerals from other States with valid transit permit to the State of Karnataka?”

2. The challenge in these petitions under Article 226 of the Constitution of India is to the constitutional validity of sub-rule (7) of Rule 42 of the Karnataka Minor Mineral Concession Rules, 1994 (for short, ‘the said Rules of 1994’). Sub-rule (7) of Rule 42 which was incorporated by the Karnataka Minor Mineral Concession (Amendment) Rules 2020 (for short, ‘the Amendment Rules of 2020’) reads thus:

“42 (7): Transportation of processed building stones from other States: An amount of rupees seventy per metric ton shall be collected from the person who transports the processed building stone materials like aggregates or jelly, size stone, boulders, M-sand and other varieties from other States with valid permit.”

3. The petitioners are carrying on the business of stone crushing and manufacture of M-sand in Krishnagiri District of the State of Tamil Nadu. The petitioners claim that they have obtained requisite permits and approvals from the Government of Tamil Nadu for operating manufacturing plants and have been carrying on such operations for last more than ten years. It is their case that they have obtained quarrying lease from the Government of Tamil Nadu after participating in bidding process. The petitioners, after obtaining transit permits, are transporting the finished goods to other States including the State of Karnataka.

4. The challenge to sub-rule (7) of Rule 42 is firstly on the ground that the provisions of Section 15 of the Karnataka Mines and Minerals (Development and Regulation) Act, 1957 (for short, ‘the said Act of 1957’) do not empower the State Government to frame the Rules for imposing levy of fees for movement of licensed goods from other States. The second contention is that sub-rule (7) of Rule 42 (for short “the impugned Rule”) is violative of Article 301 of the Constitution of India. It is urged that it imposes illegal restraints on the interstate trade. It is also contended that the exercise of power by the State Government for framing such a Rule is not in accordance with Article 265 of the Constitution of India.

SUBMISSIONS OF THE PETITIONERS:

5. Shri. Arvind Kuloor Kamath, the learned Senior Counsel appearing for the petitioners submitted that the field of transportation of minerals and the regulation of mining is already occupied by the said Act of 1957 which is a law made by the Parliament. He pointed out that under the said Act of 1957, a power has been conferred on the States to frame Rules only in accordance with Sections 15 and 23-C thereof. It is pointed out that the State Government has already established various check-posts in the State right from the year 1994 for controlling unauthorized transportation and unauthorized quarrying. The copies of the notifications for establishing such check-posts have been placed on record. It is submitted that the impugned sub-rule (7) of Rule 42 does not prescribe the object and nature of the levy, and simply states that a sum of rupees seventy per metric ton is payable by non-State transporters. It is not described as a fee. The learned counsel also invited our attention to the stand taken by the State Government in its statement of objections. He submitted that the impugned Rule is not covered by the legislative power of the State either under Section 15 or under Section 23-C of the said Act of 1957.

6. The learned Senior Counsel appearing for the petitioners submitted that the power of the State Government to make a law for the levy of fees in accordance with Entry-66 of List-II in the seventh Schedule of the Constitution of India can be exercised only to make a plenary law and not for