2006 Supreme(All) 643

[2006(3) ADJ 471 (All)(DB)]
ALLAHABAD HIGH COURT
(Division Bench)
BEFORE : R.K. AGRAWAL AND MRS. SAROJ BALA, JJ.
M/s. J.K. CONSTRUCTION ENGINEERS AND CONTRACTOR AND OTHERS ...Petitioner
Versus
UNION OF INDIA AND OTHERS ......Respondents
(Civil Misc. Writ Petition Nos. 47754 of 2005, 8760, 34626, 40476, 48962, 56242, 56246 of 2003, 9794, 20368, 21354, 22729, 30243, 32405, 44593 of 2004, 22744, 43552, 50759, 58236, 59052, 62725, 63169, 63600, 64619, 64620, 65143, 66645, 68525, 68650, 69806, 70815, 70817, 70843, 70845, 70846, 70847, 71239, 71273, 71277, 71387, 71627, 72025, 72141, 73208, 74832, 76375, 76805, 77122, 77124, 77692 of 2005, 52, 1744, 2253, 2826, 2827, 2996, 2998, 3662, 5110, 5461, 5676, 6073, 6835, 6959, 6961, 7635, 7669, 8074 and 8518 of 2006, decided on 28th February, 2006)

Headnote:(A) Mines and Minerals (Regulation and Development) Act, 1957—Sections 15, 2, 3, 7 and 9—U.P. Minor Minerals (Concession) Rules, 1963—Rules 2, 3, 21, 54, 55, 58, 64, 67, 70 and 71—Constitution of India—Entry 54 of List I and Entry 23 of List II of Seventh Schedule and Articles 39(b), (c), 14, 21, 31-A, 39, 73, 162, 246, 265 and 300-A—Minor minerals—Supplied to Government and other undertakings (pursuant to contract between parties) by petitioners—Levy/demand royalty on ordinary earth and other minor minerals—Filing of writ petitions, questioning jurisdiction and competence of State of U.P. to such levy/demand royalty—Act of 1957 was enacted by Parliament, which was referred to Entry 54 of List I of VIIth Schedule—And Concession Rules, have not been framed by State Legislature under Entry 23 of List II—But has been framed under Section 15 of Act of 1957, as a delegatee of Union, with regard to minor minerals—Even ordinary earth was a mineral, provided it has been so declared by Union under Section 3(e) of 1957 Act—Government of India having notified ordinary earth, used for specific purposes, to be a minor mineral—It cannot be said that it was wholly without jurisdiction or lack legislative competence—In instant case, it was found that provisions of clauses (b) and (c) of Article 39 of Constitution were not at all attracted, inasmuch as that levy of royalty on ordinary earth, when used for specified purposes, ownership of lands, or material resources, were not being affected at all—And such persons were required to pay royalty @ Rs. 4/- per cubic meter, on ordinary earth—Plea that levy and demand of royalty on ordinary earth, used for embankment and filling—Would operate harshly upon farmers and common man, who may use for filling their own lands, or making embankments, in their fields, cannot be accepted, as a valid ground of challenge to notification, dated 3-2-2000, or 24th Amendment Rules of 2001 to U.P. Minor Minerals (Concession) Rules, 1963—Central Government has notified ordinary earth, for specified purposes, as a minor mineral—Which classification did not violate any of provisions of Article 14 of Constitution, nor it results in hostile discrimination—Royalty fixed @ Rs. 4/- per cubic meter by State Government under Amendment Rules—Was not without authority of law—Therefore, petitions liable to be dismissed. [Paras 38, 45, 53, 54, 66 and 100]

       (B) Constitution of India, 1950—Articles 14, 19(1)(g), 21 and 39-A—Directive principles vis-a-vis fundamental rights—In judging reasonableness of restrictions imposed on fundamental rights—One has to bear in mind Directive Principles of State Policy set forth in Part IV of Constitution, while examining challenge to constitutional validity of law, by reference to Article 19(1)(g) of Constitution. [Para 46]

       (C) Taxation—Statute—Whether can be challenged, on ground of being harsh, or tax imposed was excessive—A Statute cannot be challenged, on ground that it was harsh, or tax imposed thereunder, was excessive. [Para 54]

       (D) Legislation—Misuse of a provision—Mere possibility of abuse of a provision of a law—Does not per se invalidate legislation—It must be presumed, unless contrary was proved, that administration and application of a particular law, would be done, not with an evil eye and unequal hand—Therefore, it cannot be held that a provision to be ultra vires, or unconstitutional, merely because there was a possibility of it being misused. [Paras 55 and 62]

       (E) Interpretation of Taxing Statutes—Benevolent construction—Rule of—Taxing statutes, to be strictly construed—Ordinarily, rule of benevolent construction, has been applied, while construing welfare legislation, or provisions, relating to relationship between weaker or stronger contracting parties—Thus, question of applying rule of benevolent construction, was not attracted in instant case. [Paras 67 and 73]

       (F) Royalty—Whether tax—Also mineral royalty—Royalty was a tax, held in India Cements case, to be an inadvertent error—And it being not a tax—Principles regarding strict interpretation of a taxing Statute, would not apply in instant case. [Paras 77 and 83]

       (G) Executive powers—Executive powers of Union and State—Extend to matters, with respect to which Legislature of a State has power to make laws—However, it was subject to provisions of Constitution. [Para 84]

       (H) U.P. Minor Minerals (Concession) Rules, 1963—Rules 70 and 64 (As Amended by 24th Amendment Rules, 2001)—Constitution of India—Article 162—Issue of Government Orders, by State Government, providing for carrying of declaration in Form MM-11, and copies of Treasury Challans, evidencing payment of royalty—Rule 64 specifically providing manner for payment of fee and deposit, as may be specified in Rules—Government orders only specifying requirements of carrying declaration in Form MM-11, which was also otherwise required under Rule 70—And in absence thereof, copies of Treasury Challans, evidencing payments of royalty, in respect of minor minerals, carried, or transported, making them liable to pay same—Such a requirement, can be justified by them under Rule 64, as also under Article 162 of Constitution. [Para 91]

       (I) Powers—Exercise of—Provisions of Acts—Exercising of powers thereunder—If under provisions of Acts, an authority was required to exercise powers or to do an act, in a particular manner—Then that power, to be exercised—And an act, has to be performed in that manner alone—And not in any other manner. [Para 92]

       (J) Royalty—Recovery of—Liability for—As royalty was payable, on excavation of any minor minerals, liability was primarily of persons, holding Mining Lease, or a Mining Permit—But if a person, did not held, any mining lease or mining permit, liability did not cease—Any person, dealing in a minor mineral, was required to maintain and keep documents to show that royalty has been paid, and in order to ensure that due royalty, on minor minerals, has been paid, within State of U.P., State Government by three Government Orders issued, have provided for producing copies of declaration in Form MM-11, and Treasury Challans, evidencing deposit of royalty—It cannot be said that any undue restrictions have been placed upon rights to carry trade, or business, or it was without authority of law. [Para 101]

       (K) U.P. General Clauses Act, 1904—Section 19-A—U.P. Minor Minerals (Concession) Rules, 1963—Rules 21, 57 and 64 (As Amended by 24th Amending Rules of 2001)—Constitution of India—Article 162—Provisions, made by Government of U.P. by issuing Government Orders, for checking evasion and compliance of provisions of Concession Rules, i.e., carrying of Declaration Form MM-11, and producing copies of Treasury Challans, evidencing payment of royalty—Was well within its competence and jurisdiction—Same would be true for States' power, to check evasion, and to realise its dues, from concerned persons. [Para 102]

       (L) Doctrine of per incuriam—Is applicable where by inadvertence, a binding precedent, or relevant provisions of Statute—Have not been noticed by Court. [Para 106]