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2024 Supreme(SC) 604

SUPREME COURT OF INDIA
Dr. Dhananjaya Y. Chandrachud, CJI., Hrishikesh Roy, Abhay S. Oka, B.V. Nagarathna, J. B. Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George Masih, JJ.
Mineral Area Development Authority & Anr. – Appellants
Versus
M/S Steel Authority of India & Anr Etc. – Respondents
Civil Appeal Nos. 4056-4064 of 1999 With Civil Appeal No. 7937 of 2019 With Writ Petition (Civil) No. 512 of 2018 With Civil Appeal No. 7938 of 2019 With Civil Appeal No. 7936 of 2019 With Civil Appeal No. 6221 of 2008 With Civil Appeal No. 5250 of 2019 With Writ Petition (C) No. 729 of 2019 With Writ Petition (C) No. 1029 of 2019 With Special Leave Petition (C) No. 16028 of 2021 With Civil Appeal No. 4286 of 2023 With Civil Appeal No. 5682 of 2007 With Civil Appeal No. 1295 of 2008 With Civil Appeal No. 874 of 2013 With Civil Appeal Nos. 8269-8271 of 2013 With Civil Appeal No. 8268 of 2013 With Civil Appeal No. 8267 of 2013 With Civil Appeal No. 6135 of 2013 With Civil Appeal No. 8272 of 2013 With Civil Appeal No. 9458 of 2013 With Special Leave Petition (Civil) No. 18600 of 2013 With Civil Appeal No. 4332 of 2013 With Civil Appeal No. 5329 of 2002 With Civil Appeal No. 4993 of 2006 With Civil Appeal No. 8273 of 2013 With Civil Appeal No. 8274 of 2013 With Civil Appeal No. 3869 of 2014 With Civil Appeal No. 2632 of 2013 With Civil Appeal No. 14685 of 2015 With Civil Appeal No. 6784 of 2014 With Writ Petition (Civil) No. 376 of 2015 With Civil Appeal No. 10082 of 2016 With Civil Appeal No. 886 of 2017 With Civil Appeal No. 4588 of 2017 With Civil Appeal No. 205 of 2017 With Civil Appeal Nos. 5728-5729 of 2018 With Civil Appeal Nos. 4722-4724 of 1999 With Civil Appeal No. 5333 of 2002 With Civil Appeal Nos. 5335-5336 of 2002 With Civil Appeal No. 5332 of 2002 With Civil Appeal No. 1352 of 2005 With Civil Appeal No. 1883 of 2006 With T.P. (Civil) No. 722 of 2006 With Civil Appeal No. 4745 of 2006 With Civil Appeal No. 4990 of 2006 With Civil Appeal No. 5599 of 2006 With Civil Appeal No. 5649 of 2006 With Civil Appeal No. 378 of 2007 With Civil Appeal No. 665 of 2007 With Civil Appeal No. 1180 of 2007 With T.P. (Civil) No. 481 of 2007 With T.P. (Civil) No. 906 of 2007 With Civil Appeal No. 3401 of 2008 With Civil Appeal No. 3400 of 2008 With Civil Appeal No. 3402 of 2008 With Civil Appeal No. 8311 of 2011 With Civil Appeal No. 4293 of 2012 With Civil Appeal No. 2055 of 2009 With T.P. (Civil) No. 951 of 2006 With Civil Appeal No. 4991 of 2006 With Civil Appeal No. 4992 of 2006 With Special Leave Petition (Civil) No. 763 of 2007 With Special Leave Petition (Civil) No. 15900 of 2007 With Civil Appeal No. 3403 of 2008 With Civil Appeal No. 98 of 2009 With T.P. (Civil) No. 613 of 2009 With T.P. (Civil) No. 626 of 2009 With Civil Appeal No. 4479 of 2010 With Civil Appeal No. 4478 of 2010 With Civil Appeal No. 3643 of 2011 With Civil Appeal Nos. 4710-4721 of 1999 With Civil Appeal No. 2174 of 2009 With Civil Appeal No. 6497 of 2008 With Civil Appeal No. 6498 of 2008 With Civil Appeal No. 6137 of 2008 With Civil Appeal No. 7397 of 2008 With Civil Appeal No. 96 of 2009 With Civil Appeal No. 6499 of 2008 With Civil Appeal No. 97 of 2009 And With Special Leave Petition (Civil) No. 26160 of 2008
Decided On : 25-07-2024

Advocates appeared:
For the Appellant(s) : Mr. Arvind P. Datar, Sr. Adv. Mrs. Prabha Swami, AOR Mr. Nikhil Swami, Adv. Ms. Divya Swami, Adv. Mr. Rakesh Dwivedi, Sr. Adv. Mrs. Kirti Renu Mishra, AOR Ms. Sansriti Pathak, Adv. Mr. Eklavya Dwivedi, Adv. Mrs. Apurva Upmanyu, Adv. Mr. Rakesh Dwivedi, Sr. Adv. Mr. Tapesh Kumar Singh, Sr. Adv. Ms. Sansriti Pathak, AOR Mr. Aditya Pratap Singh, Adv. Mr. Sukant Vikram, Adv. Mr. Eklavya Dwivedi, Adv. Mr. Prashant Bharadwaj, Adv. Mr. Prashant Bhardwaj, Adv. Mr. Amarjeet Gupta, Adv. Ms. Aishwarya Bhati, A.S.G. Mr. Uddyam Mukherjee, AOR Mr. Swapnil Pattanayak, Adv. Ms. Manisha Chava, Adv. Mr. Agnibha Chatterjee, Adv. Ms. Shagun Thakur, Adv. Ms. Bln Shivani, Adv. Mr. Abhijeet Singh, Adv. Mr. Rustam Singh Chauhan, Adv. Ms. Sthavi Asthana, Adv. Mr. Ashwin Joseph, Adv. Ms. Poornima Singh, Adv. Mr. Annirudh Singh, Adv. Ms. Shreya Jain, Adv. Ms. Aishwarya Bhati, A.S.G. Mr. Gp. Capt. Karan Singh Bhati, AOR Mr. Hemendra Sharma, Adv. Ms. Chitrangda Rastravara, Adv. Mr. Abhijeet Singh, Adv. Mr. Anirudh Singh, Adv. Mr. Aishwary Mishra, Adv. Mr. Dhananjai Shekhwat, Adv. Mr. Shiv Autar Singh Sengar, Adv. Mr. Dashrath Singh, Adv. Mr. Yogeshwar Krishna, Adv. Ms. Anjali Sexena, Adv. Mr. S.K. Bagaria, Sr. Adv. Mr. Ashok Grover, Sr. Adv. Mr. Praveen Kumar, AOR Mr. Kumar Ajit Singh, Adv. Ms. Sunaina Kumar, Adv. Mr. Karuppaiah Meyyappan, Adv. Mr. Abhishek Kalaiyarsan, Adv. Mr. Ajit Kumar Sinha, Sr. Adv. Mr. Ashwarya Sinha, AOR Ms. Priyanka Sinha, Adv. Mr. Aditya Malhotra, Adv. Mr. Milind Kumar, AOR Mr. Syed Shahid Hussain Rizvi, AOR Mr. Guntur Prabhakar, AOR Ms. Prerna Singh, Adv. Mr. Sunil Kumar Jain, AOR Mr. Ram Lal Roy, AOR Mr. Shiv Singh Yadav, Adv. Mr. Mahesh Agarwal, Adv. Mr. Ninad Laud, Adv. Mr. Ankur Saigal, Adv. Mr. Anshuman Srivastava, Adv. Mr. Rajesh Kumar, Adv. Mr. Chirag Nayak, Adv. Mr. Rishi Agrawala,, Adv. Mr. M.S. Ananth, Adv. Ms. S. Lakshmi Iyer, Adv. Mr. Zubin Dash, Adv. Mr. Himanshu Saraswat, Adv. Mr. E. C. Agrawala, AOR Mr. Abhimanyu Bhandari, Adv. Mr. Naveen Kumar, AOR Ms. Roohe Dua, Adv. Ms. Stuti Bisht, Adv. Mr. Nitesh Bhandari, Adv. Mr. Arav Pandit, Adv. Mr. Harshit Khanduja, Adv. Mr. Prabhat Kumar Rai, Adv. Ms. Dhankshi Gandhi, Adv. Ms. Nidhi Singh, Adv. Mr. Sahib Kochhar, Adv. Mr. Shourajeet Chakravarty, Adv. Mr. Randeep Sachdeva, Adv. Ms. Aprajita Bhardwaj, Adv. Ms. Shreya Arora, Adv. Mr. Maitreya, Adv. Mr. Ashok Kumar Singh, AOR Mr. Shantwanu Singh, Adv. Mr. Megh Shyam Bhangle, Adv. Mr. Raj Kishor Sinha, Adv. Mr. Rahul Dubey, Adv. Ms. Pragya Singh, Adv. Mr. Sunny Singh, Adv. Mr. Akshay Singh, Adv. Mr. Kunal Verma, AOR Mr. H. D. Thanvi, Adv. Mr. Nikhil Kumar Singh, Adv. Mr. Achal Singh Bule, Adv. Mr. Rishi Matoliya, AOR Mr. K. V. Mohan, AOR Mr. K.V. Balakrishnan, Adv. Mr. R.k. Raghavan, Adv. Ms. Sumita Hazarika, AOR Mrs. Sheela Goel, AOR Mr. T. G. Narayanan Nair, AOR Mr. Shibu Devasia Olickal, Adv. Ms. Samyuktha H Nair, Adv. Mr. Shantanu Sagar, AOR Mr. Prabhat Ranjan Raj, Adv. Mr. Shashwat Anand, Adv. Mr. Anil Kumar, Adv. Mr. Gunjesh Ranjan, Adv. Mr. Vaibhav Jain, Adv. Mrs. Divya Mishra, Adv. Mr. U.A. Rana, Adv. Mr. Himanshu Mehta, Adv. M/S. Gagrat And Co, AOR Mr. S. K. Verma, AOR Mr. Sanjay Kumar Tyagi, AOR Ms. Manjeet Kirpal, AOR Mr. P. V. Yogeswaran, AOR Mrs. Vanita Bhargava, Adv. Mr. Gaurav Juneja, Adv. Mr. Sanjeev Kumar Kapoor, Adv. Mr. Ajay Bhargava, Adv. Ms. Monika Singh, Adv. Mr. Aakash Bajaj, Adv. Ms. Muskan Narang, Adv. Ms. Prerona Banerjee, Adv. Ms. Nandita Chauhan, Adv. Mr. Avirat Kumar, Adv. Ms. Tijil Thakur, Adv. Ms. Aarushi Yadav, Adv. M/S. Khaitan & Co., AOR Mr. Neeraj Kumar Gupta, AOR Mr. Ranjeet Kumar Singh, Adv. Mr. Rahul Kumar Verma, Adv. Mr. Nitin Singh, Adv. Mr. Akshaya Agarwal, Adv. Ms. Sharmila Upadhyay, AOR Mr. Pawan R Upadhyay, Adv. Mr. Sarvjit Pratap Singh, Adv. Mr. Sarad Kumar Singhania, AOR Mr. P. S. Sudheer, AOR Mr. Ninad Laud, Adv. Mr. Dhananjya Mishra, Adv. Mr. Zubin Dash, Adv. Mr. Rishi Maheshwari, Adv. Ms. Anne Mathew, Adv. Mr. Bharat Sood, Adv. Ms. Miranda Solaman, Adv. Ms. Nivedita Sudheer, Adv. Ms. Sunaina Phul, Adv. Mr. Shailendra Swarup, AOR Ms. Bindu Saxena, Adv. Ms. Aparajita Swarup, Adv. Mr. Surender Kumar Gupta, AOR Ms. Muskan Gupta, Adv. Ms. Nandini Sen Mukherjee, AOR Mr. Sumit Teterrwal, AOR
For the Respondent(s):Mr. R. Venkataramani, Attorney General for India Mr. Tushar Mehta, Solicitor General Mr. S.K. Bagaria, Sr. Adv. Mr. Rupesh Kumar, Sr. Adv. Mr. Sunil Kumar Jain, AOR Mr. Kaushik Choudhury, Adv. Mr. Shaantanu Jain, Adv. Ms. Anusha Agarwal, Adv. Mr. Deepanshu Jain, Adv. Mr. Achintya Kumar Sinha, Adv. Mr. Kumar Ajit Singh, Adv. Mr. Manish Jain, Adv. Ms. Rashika Swarup, Adv. Mr. Saksham Garg, Adv. Mr. Jyotirmoy Chatterjee, Adv. Mr. Sachin Sharma, Adv. Ms. Kanika Kalaiyarasan, Adv. Mr. Raman Chitwan Singh, Adv. Mr. Gurmeet Singh Makker, AOR Mr. Prashat Rawat, Adv. Mr. Rakesh Dwivedi, Sr. Adv. Mr. Tapesh Kumar Singh, Sr. Adv. Ms. Sansriti Pathak, AOR Mr. Eklavya Dwivedi, Adv. Mr. Sukant Vikram, Adv. Mr. Prashant Bhardwaj, Adv. Mr. Aditya Pratap Singh, Adv. Mr. Amarjeet Gupta, Adv. Mr. Vijay Hansaria, Sr. Adv. Mr. Gaurav Jain, Adv. Ms. Abha Jain, AOR Ms. Kavya Jhawar, Adv. Mr. Pawanshree Agarwal, Adv. Ms. Sneha Kalita, Adv. Mr. Abhinav Hansaria, Adv. Ms. Nandini Rai, Adv. Mr. Jaivir Singh, Adv. Ms. Aishwarya Bhati, A.S.G. Mr. Gp. Capt. Karan Singh Bhati, AOR Mr. Nithin Chowdary Pavuluri, Adv. Ms. Poornima Singh, Adv. Ms. Manisha Chava, Adv. Ms. Shagun Thakur, Adv. Ms. Bln Shivani, Adv. Mr. Rustam Singh Chauhan, Adv. Ms. Sthavi Asthana, Adv. Mr. Ashwin Joseph, Adv. Ms. Shreya Jain, Adv. Ms. Shivika Mehra, Adv. Ms. Anupriya Srivastava, Adv. Ms. Anuradha Arputam, Adv. Mr. Akshaj Singh, Adv. Ms. Radhika Misra, Adv. Mr. Sunit Chaudhary, Adv. Mr. Vasu Vats, Adv. Ms. Riddhi Jad, Adv. Mr. Abhinav Gupta, Adv. Mr. Harish N Salve, Sr. Adv. Mr. K. R. Sasiprabhu, AOR Mr. Jaydeep Patel, Adv. Mr. S. Mahesh Sahasranaman, Adv. Ms. Shilpa Balani, Adv. Mr. Vishnu Sharma A S, Adv. Mr. Tushar Bhardwaj, Adv. Mr. Manan Shishodia, Adv. Mr. Prakhar Agarwal, Adv. Mr. Arvind P. Datar, Sr. Adv. Mr. Rahul Unnikrishnan, Adv. Mr. Kumar Visalaksh, Adv. Mr. Udit Jain, Adv. Mr. Abhishek Vikas, AOR Mr. Tapesh Kumar Singh, AAG, Sr. Adv. Mr. Rajiv Shanker Dvivedi, Adv. Ms. Tulika Mukherjee, AOR Mr. Beenu Sharma, Adv. Mr. Venkat Narayan, Adv. Ms. Ruchi Kohli, AOR Ms. Ruchira Goel, AOR Mr. Abhishek Gupta, AOR Mr. Amit Anand Tiwari, Sr. A.A.G. Mr. Sabarish Subramanian, AOR Mr. C. Kranthi Kumar, Adv. Ms. Devyani Gupta, Adv. Mr. Vishnu Unnikrishnan, Adv. Ms. Tanvi Anand, Adv. Ms. Saushriya Havelia A, Adv. Mr. Naman Dwivedi, Adv. Mr. Danish Saifi, Adv. Ms. Arjoo Rawat, Adv. Mr. Sarathraj B, Adv. Ms. Nilofar Khan, AOR Mr. G. N. Reddy, AOR Mr. Milind Kumar, AOR Mr. Vishal Meghwal, Adv. Dr. Charu Mathur, Adv. Mr. Shiv Mangal Sharma, Adv. Mrs. Abhinandini Sharma, Adv. Mr. B.s. Rajesh Agrajit, Adv. Mr. Abhijeet Shah, Adv. Mr. Harsha Vinoy, Adv. Ms. Priya Nagar, Adv. Mr. Siddharth Goswami, Adv. Mr. Aakash Sharma, Adv. Ms. Jyoti Rana, Adv. Mr. Shiv Mangal Sharma, A.A.G. Ms. Abhinandini Sharma, Adv. Ms. Nidhi Jaswal, Adv. Ms. Shalini Singh, Adv. Mr. Deepak Verma, Adv. Mr. Abhishek Sharma, Adv. Mr. Amogh Bansal, Adv. Mr. Saurabh Rajpal, Adv. Mr. Sandeep Kumar Jha, AOR Mr. T. Harish Kumar, AOR Mr. Ajay Aggarwal, Adv. Mr. Adarsh Aggarwal, Adv. Mr. R.P. Aggarwal, Adv. Mr. Rajan Narain, AOR Mr. Saurabh Mishra, A.A.G. Ms. Ankita Choudhary, A.A.G. Mr. Sunny Choudhary, AOR Mr. Sandeep Sharma, Adv. Mr. Karan Bishnoi, Adv. Mr. Sunil Roy, AOR Ms. Ritika Gambhir Kohli, AOR Mr. Omar Ahmad, Adv. Mr. Vikram Shah, Adv. Mr. Tuhin Dey, Adv. Mr. Nikhil Kohli, Adv. Mr. Kushank Garg, Adv. Ms. Kritika Khurana, Adv. Ms. Shrishti Jeswani, Adv. Mr. Arjun Garg, AOR M/S. Ars Associates, AOR Mr. V. K. Verma, AOR Mr. Praveen Kumar, AOR Mr. Ajit Kumar Sinha, Sr. Adv. Mr. Ambhoj Kumar Sinha, AOR Mrs. Manik Karanjawala, AOR Ms. Ankita Sharma, AOR Mr. Arjun D Singh, Adv. Mr. Apurv Kurup, A.A.G. Mr. S. S. Shroff, AOR Mr. Prafull N Bharat, Adv. Gen./Sr. Adv. Mr. Bishwajit Dubey, A.A.G. Mr. Atul Jha, A.A.G. Mr. Vikrant Singh Bais, D.A.G. Mr. Praneet Pranav, D.A.G. Mr. Vinayak Sharma, Standing Counsel, Adv. Mr. Apoorv Shukla, Adv. Mr. Ravinder Kumar Yadav, AOR Mr. Vinay Mohan Sharma, Adv. Mrs. Prabhleen Apoorv Shukla, Adv. Ms. Kritika Yadav, Adv. Ms. Devina Sehgal, AOR Mr. Gaurav Kejriwal, AOR Mr. K. Parameshwar, A.A.G. Mr. Rajeev Kumar Dubey, Adv. Mr. Kamlendra Mishra, AOR Mr. Santosh Krishnan, AOR Mr. Abhisth Kumar, AOR Mr. Ramendra Mohan Patnaik, AOR Mr. Syed Shahid Hussain Rizvi, AOR Ms. Punam Kumari, AOR Ms. Mrinal Gopal Elker, AOR Mr. Saurabh Singh, Adv. Mr. Rohit K. Singh, AOR Mr. Pritam Biswas, Adv. Mr. Prakhar Srivastava, Adv. Ms. Pratibha Malviya, Adv. Mr. Rakesh K. Sharma, AOR Ms. Manjula Gupta, AOR Mr. Harsh Parashar, AOR Ms. Pragati Neekhra, AOR Mr. Aditya Bhanu Neekhra, Adv. Mr. Atul Dong, Adv. Mr. Aniket Patel, Adv. Mr. Prem Sunder Jha, AOR Mr. Mahesh Agarwal, Adv. Mr. Rishi Agrawala,, Adv. Mr. Ankur Saigal, Adv. Mr. M.S. Ananth, Adv. Ms. S. Lakshmi Iyer, Adv. Mr. Himanshu Saraswat, Adv. Mr. E. C. Agrawala, AOR Mr. Kedar Nath Tripathy, AOR Mr. Mishra Saurabh, AOR Mrs. Vanita Bhargava, Adv. Mr. Ajay Bhargava, Adv. M/S. Khaitan & Co., AOR Mr. Rutwik Panda, AOR Ms. Nikhar Berry, Adv. Ms. Anshu Malik, Adv. Mr. Sanjeev Malhotra, AOR Mr. Parijat Kishore, AOR Mr. Praveen Swarup, AOR Mr. Ameet Siingh, Adv. Mr. Praveen Swarup, Adv. Ms. Pareena Swarup, Adv. Mr. Ravi Kumar, Adv. Mr. Devesh Maurya, Adv. Mr. K.p. Singh, Adv. Ms. Payal Swarup, Adv. Mr. Nityanand Mahato, Adv. Mr. Gopal Prasad, AOR Mr. Shibashish Misra, AOR Mr. Kartik Seth, Adv. Ms. Maithili Moondra, Adv. Mr. Prashanth Dixit, Adv. Mr. Raghav Sharma, Adv. Mr. Mahesh Bhati, Adv. Mr. Saurabh Chaturvedi, Adv. Mr. Chiranjeev Sharma, Adv. Mr. Pushkin Tandon, Adv. M/S. Chambers Of Kartik Seth, AOR Mr. Mahesh Agarwal, Adv. Mr. Rishi Agrawala,, Adv. Mr. Ankur Saigal, Adv. Mr. M.s. Ananth, Adv. Ms. S. Lakshmi Iyer, Adv. Mr. Himanshu Saraswat, Adv. Mr. E. C. Agrawala, AOR M/S. Trilegal Advocates On Record, AOR Mr. Sudipta Bhattacharjee, Adv. Mr. Onkar, Adv. Mr. Rajat Mittal, AOR Mr. Arjyadeep Roy, Adv. Mr. Suprateek Neogi, Adv. Mr. Vivek Sharma, AOR Dr. Vijay Kumar Sharma, Adv. Mr. Anand Varma, AOR Ms. Apoorva Pandey, Adv. Ms. Adyasha Nanda, Adv. Mr. Mahesh Agarwal, Adv. Mr. Rishi Agrawala,, Adv. Mr. Ankur Saigal, Adv. Mr. M.S. Ananth, Adv. Ms. S. Lakshmi Iyer, Adv. Mr. Himanshu Saraswat, Adv. Mr. E. C. Agrawala, AOR Mr. Praveen Swarup, AOR Mr. Ameet Siingh, Adv. Mr. Praveen Swarup, Adv. Ms. Pareena Swarup, Adv. Mr. Ravi Kumar, Adv. Mr. Devesh Maurya, Adv. Mr. K.P. Singh, Adv. Ms. Payal Swarup, Adv. Mr. Nityanand Mahato, Adv. Mr. Akshat Shrivastava, AOR Mr. Manish Kumar Saran, AOR Ms. Anuradha Dutt, Adv. Ms. Fereshte D. Sethna, Adv. Ms. Suman Yadav, Adv. Ms. Priyanka M.P., Adv. Mr. Haaris Fazili, Adv. Mr. Kunal Dutt, Adv. Mr. Yash Mittal, Adv. Mr. Raghav Dutt, Adv. Ms. B. Vijayalakshmi Menon, AOR Mr. S.P. Singh, Sr. Adv. Sheenu Chauhan, Adv. Mr. Sanjeev Malhotra, Adv. Ms. Prerna Singh, Adv. Mr. Guntur Pramod Kumar, AOR Mr. Keshav Singh, Adv. Mr. Samarath Luthra, Adv. Mr. Dhruv Yadav, Adv. Mr. MKS Menon Adv. Ms. Usha Nandini, AOR Mr. Biju P Raman, Adv. Mr. Shashank Menon, Adv. Mr. Amit Mital, Adv. Mr. John Thomas Arakal, Adv.

Royalty, under the MMDR Act, is not a tax but a contractual consideration for mineral rights. State legislatures retain the power to tax mineral-bearing land, but this power is subject to any limitations imposed by Parliament concerning mineral development.

Headnote:(A) Mines and Minerals (Development and Regulation) Act, 1957 - Sections 2, 9, 9A, 9B, 9C, 13, 15, 17, 18, 25 - Constitution of India - Seventh Schedule - List I, Entry 54; List II, Entries 23, 49, 50 - Royalty - Tax - Mineral rights - Legislative competence - Limitations.

(B) The court examined the nature of royalty under the MMDR Act, the scope of Entries 23, 49, and 50 of List II, and the limitations imposed by Parliament under Entry 54 of List I.

(C) The court addressed whether royalty is a tax, the scope of Entry 50 of List II concerning taxes on mineral rights subject to limitations imposed by Parliament, and the interplay between Entry 50 and Entry 54 of List I (regulation of mines and mineral development).

(D) The court also considered whether Entry 50 constitutes an exception to the principle that taxing entries are distinct from general entries, and whether the MMDR Act imposes limitations on state taxing powers.

Facts of the case:
Appeals challenged High Court decisions on the constitutional validity of state levies on mineral rights, considering previous conflicting judgments on whether royalty is a tax.

Findings of Court:
The court held that royalty is not a tax but a contractual consideration; Entry 50 of List II does not create an exception to the principle of distinct taxing and general entries; the MMDR Act does not impose limitations on state taxing powers under Entry 50; states can tax mineral-bearing land under Entry 49, using mineral yield as a measure; and previous conflicting judgments are overruled.

Issues: The main issues were the nature of royalty under the MMDR Act, the scope of Entry 50 of List II, and the interplay between Entries 49 and 50 of List II in relation to taxing mineral-bearing land.

Ratio Decidendi: The court reasoned that royalty is a contractual payment, not a tax; Entry 50 of List II allows Parliament to impose limitations on state taxing powers but not to tax mineral rights itself; the MMDR Act does not limit state taxing powers under Entry 50; and states can tax mineral-bearing land using mineral yield as a measure.

Result: Previous conflicting judgments overruled; appeals disposed of.

Judgement Key Points

Key Points: - (!) The MMDR Act declares Union control over regulation of mines and development of minerals; royalty is fixed under Section 9 and Second Schedule. - (!) Section 9 authorizes royalty payments; the Central Government can amend rates under Section 9(3). - (!) Petitioners argued royalty is not a tax; respondents argued any levy related to mineral development limits state taxing powers under Entry 50 List II. - (!) Nine-judge bench discusses inter-relationship between Entry 50 List II and Entry 54 List I. - (!) Entry 50 is "taxes on mineral rights" subject to "any limitations imposed by Parliament by law relating to mineral development." - (!) Parliament’s supremacy through Entry 54 List I can denude State power in areas covered by MMDR Act. - (!) Conclusions: royalty is a tax or exaction; Entry 50 is not an exception to Sundararaman; MMDR Act imposes limitations on state taxation of mineral rights. - (!) States can tax mineral-bearing lands under Entry 49 List II only to the extent not denuded by Parliament; royalties/measures under MMDR may limit that field. - (!) Holdings that Entries 49 and 50 operate in distinct fields but can coexist with nexus-based measures; need to harmonize.

Question 1?

What is the true nature of royalty under Section 9 of MMDR Act: is it a tax or a contractual exaction?

Question 2?

What is the scope and meaning of Entry 50 of List II (taxes on mineral rights) in relation to Entry 54 of List I and the MMDR Act: does MMDR impose limitations on state taxing powers?

Question 3?

Can a State levy taxes on mineral-bearing land under Entry 49 List II using mineral value or royalty as measure, in light of Parliament’s power to regulate mineral development under Entry 54 List I?

JUDGMENT

Dr Dhananjaya Y Chandrachud, CJI.

Table of Contents

A.	Background
B.	Issues
C.	Submissions
i.	Submissions of the petitioners
ii.	Submissions of the respondents
D.	Distribution of legislative fields relating to mines and minerals
E.	Underlying constitutional philosophy
i.	Scheme of distribution of legislative powers and constitutional limitations 29
ii.	Interpretation of legislative entries
iii.	Fiscal Federalism
iv.	Natural resources and the public trust doctrine
F.	Whether royalty is tax
i.	Royalty under the MMDR Act
ii.	Purpose of Section 9 of the MMDR Act
iii.	Contours of a mining lease
a.	Lease and license
b.	The nature of a mining lease under the MMDR Act and the Mineral Concession Rules 1960
iv.	Meaning of “royalty”
v.	Characteristics of Tax
vi.	Royalty is not in the nature of tax
a.	Prelude to India Cement
b.	Divergence between India Cement and Kesoram
c.	Royalty is not a tax
G.	Inter-relationship between Entry 23 of List II and Entry 54 of List I
i.	Meaning of “regulation of mines” and “mineral development”
ii.	Analysis of Hingir-Rampur, M A Tulloch, and Baijnath Kedia
iii.	Examination of the “extent” of the MMDR Act
H.	Inter-relationship between Entry 50 of List II and Entry 54 of List I
i.	Taxes on mineral rights
a.	Mineral rights duty
b.	Meaning of the expression “mineral rights”
c.	Taxes on mineral rights
ii.	The limitations on the taxing power of the State under Entry 50 of List II
a.	Entry 50 of List II does not constitute an exception to the Sundararamier principle
b.	Nature of “any limitation”
c.	Scheme of the MMDR Act does not serve as “any limitation”
d.	Section 9 does not serve as a limitation on the taxing powers of State
e.	“Any limitation” can extend to prohibition
f.	Impact of taxes on mineral rights on mineral development
I.	Scope of Entry 49
i.	Land System in India
ii.	Tax on land and buildings
a.	Principles governing ‘taxes on lands and buildings’
a.	States can impose tax on mineral bearing land
iii.	Measure of tax
a.	Taxing mineral-bearing land
b.	Goodricke
iv.	Measure of tax on mineral-bearing land
a.	Decoupling of minerals from land
b.	Minerals as measure of tax on land
J.	Conclusions

A. Background

1. The present batch of appeals bears on the distribution of legislative powers between the Union and the States on the taxation of mineral rights. The legislative entry which lies at the core of the present reference is Entry 50 of List II of the Seventh Schedule to the Constitution. The entry deals with taxes on mineral rights subject to “any limitations imposed by Parliament by law relating to mineral development.” Regulation of mines and mineral development is enumerated under both the Union List (Entry 54 of List I) and the State List (Entry 23 of List II) of the Seventh Schedule. The entrustment of the subject to the State legislatures under Entry 23 of List II is made subject to the provisions of Entry 54 of List I.

2. Parliament enacted the Mines and Minerals (Development and Regulation) Act, 1957¹[“MMDR Act”] in exercise of its legislative powers under Article 246 of the Constitution. The subject which the legislation predominantly covers is relatable to Entry 54 of List I. The MMDR Act is a comprehensive code for the regulation of mines and development of minerals. Section 9 provides that the holder of a mining lease shall pay royalty in respect of any mineral removed or consumed from the leased area at the specified rates. In India Cement Ltd. v. State of Tamil Nadu, (1990) 1 SCC 12 [34] a seven-Judge Bench of this Court held that royalty is tax and the st

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2024 Supreme(SC) 604

Royalty, under the MMDR Act, is not a tax but a contractual consideration for mineral rights. State legislatures retain the power to tax mineral-bearing land, but this power is subject to any limitations imposed by Parliament concerning mineral development.

Question 1?

What is the true nature of royalty under Section 9 of MMDR Act: is it a tax or a contractual exaction?

Question 2?

What is the scope and meaning of Entry 50 of List II (taxes on mineral rights) in relation to Entry 54 of List I and the MMDR Act: does MMDR impose limitations on state taxing powers?

Question 3?

Can a State levy taxes on mineral-bearing land under Entry 49 List II using mineral value or royalty as measure, in light of Parliament’s power to regulate mineral development under Entry 54 List I?

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