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High Court Of Rajasthan
Judgename : K.N. Wanchoo, I.N. Modi
Bherulal - Appellant
Versus
State of Rajasthan - Respondent
Civil Writ No. 42 of 1955
Decided On : 03/06/1956
ROYALTY - MINERAL CONCESSION - RAJASTHAN MINOR MINERAL CONCESSION RULES, 1955 - SCHEDULE I - DIFFERENT RATES OF ROYALTY BASED ON CONSUMPTION LOCATION - DISCRIMINATION - ARTICLE 14 OF THE CONSTITUTION - EXPORT DUTY - ARTICLE 303 OF THE CONSTITUTION - VALIDITY.
Fact of the Case:
The applicant, a stone merchant, challenged the legality of royalty charges imposed by the State of Rajasthan and a contractor on stones purchased from quarrymen in Nimbahera Tahsil. The contractor was authorized to collect royalty at specified rates, with a general rate of Rs. 2/- per cart-load and a local rate of Re. 1/- for local use. The applicant contended that the charge was not authorized by law and amounted to an export duty, violating Article 14 of the Constitution.
Finding of the Court:
The court held that the charge was indeed royalty, a payment to the owner of minerals for the right to extract them, and that the fixation of different rates of royalty based on where the mineral was consumed was against the principle of royalty and discriminatory under Article 14 of the Constitution. The court also held that the extra charge on stones exported outside Rajasthan was essentially an export duty, which the State could not impose after the abolition of customs duty under Article 303 of the Constitution.
Issues: 1. Whether the charge imposed on stones was royalty or an unauthorized levy. 2. Whether the fixation of different royalty rates based on consumption location was discriminatory and violative of Article 14 of the Constitution. 3. Whether the extra charge on stones exported outside Rajasthan amounted to an export duty, prohibited under Article 303 of the Constitution.
Ratio Decidendi: 1. Royalty is a payment to the owner of minerals for the right to extract them, based on production and weight, and is not related to the consumption location of the mineral. 2. The fixation of different royalty rates based on consumption location is discriminatory and violative of Article 14 of the Constitution, as it lacks a reasonable basis and denies equality before the law to citizens of different parts of the State. 3. The extra charge on stones exported outside Rajasthan is essentially an export duty, which the State cannot impose after the abolition of customs duty under Article 303 of the Constitution.
Final Decision: The court allowed the application and prohibited the State and the contractor from charging royalty on Singi stones at anything more than the local rate mentioned in the schedule to the contract. The applicant was awarded costs from the State.
2. The facts, which have led to this application, are these. The applicant is a stone merchant, and purchases building stone from quarrymen of different quarries situate in Tahsil Nimbahera in district Chittorgarh. Thereafter, he sells these stones either in Nimbahera itself or in other parts of Rajasthan, and even beyond Rajasthan, Mangairam is a contractor appointed by the State of Rajasthan for collecting wnat is called royalty in connection with these quarries. Mangairam. holds a contract from the State of Rajasthan for this purpose as he offered the highest bid of Rs. 3 9,251/-for collection of royalty. According to the contract entered into between Mangairam and the State of Rajasthan, he is authorised to collect royalty on stones from the quarry-holders or from persons taking the stone from such quarry-holders at the rate specified in the schedule attached to the contract. The contract is valid for 3 years from 1-4-1954, to 31-3-1957. One of the terms prescribes that stone would be supplied free of royalty to bona fide cultivators who are able to produce a certificate to that effect from certain authorities. The rate prescribed in the schedule is of two kinds so far as the particular brand of stone with which we are concerned. There is what is called a general rate, and a rate for local use. The general, rate is Rs. 2/-per cart-load of stones where the cart is drawn by two bullocks, while the rate for local use for the same quantity of stone is Re. 1/-.
3. It is also said that in order to realize this royalty, the contractor has fixed Nakas (some kind of posts) round about the quarries, and he is realizing Re. 1/-for every bullock-cart drawn by two bullocks where the stone is for local use, and Rs. 2/-where it is exported outside
Nimbahera-Tahsil.
4. The contention of the petitioner is two fold before us. In the first place, he contends that this charge is not royalty, and as it is not authorised by any law, it cannot be realized at all. In the second place, it is contended that even if it is royalty, it can only be realized at one rate namely Re. 1/-per cart-load for a bullock-cart drawn by two bullocks, and that double the rate cannot be charged for the same quantity simply because the stone is meant for export outside Nimbahera Tahsil. This it is contended amounts to imposition of a kind of export duty in the guise of royalty, and the State is not authorised to charge anything above-the minimum of Re. 1/-per cart fixed by it. It Is further contended that this amounts tn discrimination, and is hit by Article 14 of the Constitution as. there is no reasonable basis for the classification.
5. The application has been opposed on behalf of the State as well as by Mangairam. Two preliminary objections have been taken, namely (1) that the application has been made with great delay and should be thrown out on that ground, and (2) that the applicant cannot challenge the rates for the royalty is to be paid by the quarry-men, and not by the purchasers, and the applicants have, therefore-no interest in the matter. Resides these preliminary objections, it is urged that different rates can be fixed by Government depending upon where the atones are going to be used, and that this does not amount to discrimination. It is urged that it is merely classification Which has got a reasonable basis for it. It is also urged that the extra charge on stones to be sent out of Nimbahera Tahsil is not in the nature of a customs duty or export duty, and is merely a royalty.
6. We shall deal with the preliminary objections first. So far as the matter of delay is concerned, the contract came into force from 1-4-1954, end this application was made in May, 1955. So there is a
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