Only the Central Government can amend royalty rates under Section 9(3) of the MMDR Act, and demands for additional royalty based solely on audit findings lack legal basis.

ORDER :

Sanjay K. Agrawal, J.

1. Since common question of law and fact is involved in these two writ petitions, except the period of demand, they have been clubbed together, heard together and are being decided by this common order.

W.P.(C)No.1691/2013

2. Invoking the writ jurisdiction of this Court, the petitioner herein seeks to challenge the order dated 2-9-2013 (Annexure P-7) passed by the Collector (Mining Department), Korba by which the petitioner SECL has been directed to pay an additional amount of ₹ 7,34,135-26 towards royalty.

W.P.(C)No.1645/2013

3. Similarly, the petitioner seeks to challenge the orders dated 12-6-2013 (Annexure P-2) and 31-8-2013 (Annexure P-4) passed by the Collector (Mining Department), Korba by which the petitioner SECL has been directed to pay an additional amount of ₹8,09,163-78 towards royalty.

4. The aforesaid challenge has been made on the following factual backdrop: -

[In order to decide the lis between the parties, facts of W.P.(C) No.1691/2013 are being taken as lead case.]

5. It is the case of the petitioner that the petitioner Company consequent to E-Auction, sold different crates of coal as elucidated in Annexure P-3 at the rate as reflected in the invoice/delivery order and royalty was paid taking the price “P” of the coal as reflected in the invoices in terms of the notification dated 1-8-2007 published and notified in the official Gazette by the Central Government in exercise of power conferred under sub-section (3) of Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 (for short, ‘the MMDR Act’). Accordingly, royalty was paid for the relevant years in question by the petitioner with the State calculating it based on the price of coal reflected in the invoices as provided in the formula in the Second Schedule of the MMDR Act, yet, on 22-5-2013, vide Annexure P-4, the Mining Officer of the Office of respondent No.2 issued notices to the petitioner that for the period from February, 2011 to December, 2011 and from January, 2012 to May, 2012, steam coal sold by SECL was less than the prescribed basic price, therefore, less royalty has been paid and clarification was sought with respect to forward auction and the reasons for depositing less royalty, which the petitioner replied that royalty has been paid in accordance with the price shown in the invoices. On 2-9-2013, the impugned order Annexure P-7 has been passed by the Office of the Collector (Mining Department) referring to the audit note by the CAG Chhattisgarh directing that the pithead valued which is one of the calculating mode for royalty has been notified vide notification dated 26-2-2011 and the invoices have been issued at a lesser price than notified and therefore additional demand of ₹7,34,135-26 is payable to be deposited immediately or else, interest would be levied leading to filing of the instant writ petition.

6. Return has been filed on behalf of the State / respondents No.1 to 3 stating inter alia and relying upon the price notified on 26-2-2011 for ROM B grade at the rate of ₹3,990/- by Coal India and it has further been contended that the entire exercise is based on the audit objection raised by respondent No.4. Further, additional affidavit has been filed justifying the levy of additional amount of royalty.

7. Respondent No.4 has also filed affidavit stating that no notification has been separately issued by the Ministry of Coal, Government of India under Section 9 (3) of the MMDR Act enhancing the rate at which royalty shall be payable for the period from April, 2011 to March, 2012 and it has also been mentioned that