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IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
SURESH KUMAR KAIT, CJ., VIVEK JAIN, J.
Vista Sales Pvt. Ltd. Being Represented – Petitioner
Versus
The State of Madhya Pradesh And Others – Respondents
Writ Petition No. 25052 of 2022 With Writ Petition No. 24733 of 2022, Writ Petition No. 25725 of 2022, Writ Petition No. 26085 of 2022, Writ Petition No. 26087 of 2022, Writ Petition No. 26245 of 2022, Writ Petition No. 27268 of 2022, Writ Petition No. 27304 of 2022, Writ Petition No. 27310 of 2022, Writ Petition No. 28596 of 2022, Writ Petition No. 28767 of 2022, Writ Petition No. 13901 of 2023
Decided On : 11-12-2024
| Table of Content |
|---|
| 1. overview of the petitioner's challenge regarding royalty. (Para 1 , 4 , 5) |
| 2. petitioners argue legality of royalty demand and procedural fairness. (Para 2 , 3 , 6 , 7) |
| 3. continuity of royalty provisions in ongoing contracts. (Para 8 , 9 , 10 , 11) |
| 4. responses from the respondents about contractual legality. (Para 12 , 14) |
| 5. discussion on maintainability of writ petitions. (Para 15 , 16 , 17 , 19) |
| 6. court's reasoning leading to the final decision. (Para 18 , 38 , 42) |
| 7. legal interpretation of minerals royalty under various rules. (Para 20 , 22 , 24 , 25) |
| 8. court's observations on statutory interpretation. (Para 26 , 28 , 31 , 32 , 46) |
| 9. insurance of applicability of amended rules. (Para 30 , 34) |
| 10. court's ruling against additional royalty demand. (Para 39 , 47 , 48) |
ORDER :
Suresh Kumar Kait, CJ.
1. The facts and issues involved in the present petitions are same and similar, therefore, present petitions are being disposed of by this common order. The facts and annexures shall be discussed with reference to Writ Petition No.25052 of 2022, however, facts of other petitions shall not be repeated for the sake of brevity being similar.
2. The petitioners have filed these petitions under Article 226 of the Constitution of India praying for the following reliefs:
“(i) To issue a writ/orders/directions more particularly in the nature of certiorari quashing the order no.sand/Katni/2022/399 dated 13.10.2022 passed byrespondent No.4 purportedly in terms of Rules, 10(4) and amended Rule 27 of Madhya Pradesh Sand (Mining, Transportation, Storage and Trading) Rules, 2019 being without competence and non-reasoned and a non-speaking order with total non-application of mind and therefore is manifestly arbitrary as being violative of Article 14 and 19 of the Constitution.
(ii) To hold that the action of respondents in demanding extra amount in an ongoing tender that was accepted pursuant to acceptance of highest bid of petitioner is illegal and arbitrary.
(iii) To issue a writ/order/directions more particularly in the nature of mandamus to hold that the impugned demand even if is on account of increase royalty is illegal as the petitioner is already depositing such higher royalty of @ 401 Cub Mtr to the Respondents pursuant to bid and highest royalty offered by the petitioner vide bid invited for this purpose;
(iv) Pass such further or other orders as this Hon’ble Court may deem fit and proper in the circumstances of the case.”
3. By way of instant petitions, the petitioners are challenging the order dated 13.10.2022 passed by the respondent No.4 – the Chief General Manager, Madhya Pradesh State Mining Corporation Limited, Bhopal whereby in view of the Rule 10(4) and amended Rule 27 of the Madhya Pradesh Sand (Mining, Transportation, Storage and Trading) Rules, 2019 (hereinafter to be referred to as “the Sand Rules of 2019”) vide Gazette Notification dated 14.07.2021, the demand of royalty has been levied on the petitioners, the details of which showing amount of royalty to be recovered from the respective petitioners, are as under:-
| S.No. | Writ Petition No. | Name of Petitioners/Successful Bidders | Contract Amount (Rs.) | Amount of Recovery of royalty by the impugned notice (Rs.) | Number of Quarry/name of District, for which sand quarry was contracted/ awarded |
| 1 . | 25052/2022 | Vista Sales Pvt. Ltd. | 56,17,50,000/- | 16,28,74,285/ | 49 mines/Katni |
| 2. | 24733/2022 | Shishir Khandar | 27,27,27,557/- | 13,02,72,339/- | 58 mines / Chhindwara |
| 3. | 25725/2022 | R.K.Transport and Construction Ltd. | 36,33,30,000/- | 30,37,36,930/- | 58 mines /Singrauli |
| 4. | 26085/2022 | RSI Stone World Pvt. Ltd. | 37,00,00,000/- | 11,47,18,710/- | 27 mines /Umaria |
| 5. | 26087/2022 | Sainik Industries Pvt. Ltd. | 35,35,00,000/- | 21,22,74,438/- | 24 mines /Sidhi |
| 6. | 26245/2022 | Ujjawal Chauhan | 27,27,60,786/- | 6,73,98,780/- | 16 mines /Harda |
| 7. | 27268/2022 | K.G.Developers | 13,63,00,000/- | 8,59,11,815/- | 22 mines /Anuppur |
| 8. | 27304/2022 | M/s Vanshika Constructions | 44,55,00,000/- | 15,21,01,457/- | 50 mines /Shahdol |
| 9. | 27310/2022 | M/s Ashtvarka IT Solution Ltd. | 40,00,00,786/- | 3,79,63,406/- | 2 |
Royalty is a contractual obligation distinct from taxes; amendments to regulations cannot retrospectively apply to existing contracts unless explicitly stated.
Subordinate legislation must align with the parent Act; regulations exceeding authority are invalid. Royalty payment under mining laws can only be for minerals actually removed or consumed.
The demands raised by the Deputy Director of Mines were found to be unsustainable in the eye of law, in view of the law laid down in National Mineral Development Corporation Limited v. State of M.P.,....
(1) Levy of tax on advertisement(s) – Imposition of royalty cannot be equated with imposition of tax/levy – Royalty and tax cannot be equated – Royalty and tax are not one and same.(2) Estoppel – Con....
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.
The stamp duty or the dead rent is to be charged on the basis of the amount of royalty to be paid, and the proviso to section 26 of the Act of 1899 applicable to the mining lease is required to be re....
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