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of <h1>Matter referred to nine-judge bench over conflict whether royalties and dead rent on minerals qualify as 'taxes on mineral rights'</h1> <h3>Mineral Area Development Authority etc. Versus M/s Steel Authority of India & Ors</h3> SC noted an apparent conflict between its five-Judge decision and an earlier seven-Judge decision on whether royalties/dead rent on minerals fall within ... Nature of royalty / dead rent payable on minerals produced / mined / extracted from mines - scope of the expression “taxes on mineral rights” - HELD THAT:- Before concluding, we may clarify that normally the Bench of five learned Judges in case of doubt has to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger coram than the Bench whose decision has come up for consideration. see: Central Board of Dawoodi Bohra Community and Anr. v. State of Maharashtra and Anr. - [2004 (12) TMI 350 - SUPREME COURT]. However, in the present case, since prima facie there appears to be some conflict between the decision of this Court in State of West Bengal v. Kesoram Industries Ltd. & Ors. [2004 (1) TMI 71 - SUPREME COURT] which decision has been delivered by a Bench of five-Judge of this Court and the decision delivered by seven-Judge Bench of this Court in India Cement Ltd. and Ors. v. State of Tamil Nadu and Ors. [1989 (10) TMI 53 - SUPREME COURT] reference to the Bench of nine-Judge is requested. Office is directed to place the matter on the administrative side before the Chief Justice for appropriate orders. Issues:1. Whether 'royalty' determined under Sections 9/15(3) of the Mines and Minerals Act is in the nature of taxRs.2. Can the State Legislature levy a tax on land based on the value of produce of land under Entry 49 List II of the ConstitutionRs.3. Interpretation of 'Taxes on mineral rights subject to any limitations imposed by Parliament' in Entry 50 List II of the Constitution.4. Nature of royalty/dead rent payable on minerals produced from mines.5. Consistency between decisions in State of West Bengal v. Kesoram Industries Ltd. and India Cement Ltd. cases.6. Interpretation of 'taxes on lands and buildings' in Entry 49, List II of the Constitution.7. Scope of 'taxes on mineral rights' in Entry 50, List II of the Constitution.8. Interpretation of 'subject to any limitation imposed by Parliament by law relating to mineral development' in Entry 50, List II.9. Exception of Entry 50, List II read with Entry 54, List I to the general scheme of taxation.10. Impact of Mines and Minerals Act on State Legislature's power under Entry 23 and Entry 50 of List II.11. Effect of limitations imposed by Parliament on State Legislature's taxing power in Entry 50, List II.Analysis:1. The Supreme Court decided that the determination of 'royalty' under the Mines and Minerals Act is not in the nature of tax. The Court referred to specific sections of the Act to clarify this distinction.2. The Court examined whether the State Legislature can levy a tax on land based on its produce value under specific constitutional entries. The judgment delved into the constitutional provisions and their interrelation to determine the legislative scope.3. The interpretation of 'Taxes on mineral rights subject to any limitations imposed by Parliament' in the Constitution was analyzed. The Court scrutinized the provisions of the Mines and Minerals Act to ascertain any limitations on the State's legislative power.4. The Court elucidated on the true nature of royalty and dead rent payable on minerals extracted from mines. This analysis involved a detailed examination of legal principles and precedents.5. The judgment discussed the consistency between the decisions in State of West Bengal v. Kesoram Industries Ltd. and India Cement Ltd. cases, focusing on any potential departure from established legal principles.6. The interpretation of 'taxes on lands and buildings' in the Constitution was examined to determine the tax implications directly related to the land as a unit.7. The scope of 'taxes on mineral rights' in the Constitution was analyzed to establish the extent of taxing authority concerning mineral rights.8. The Court interpreted the phrase 'subject to any limitation imposed by Parliament by law relating to mineral development' to understand its impact on the State's taxing power in the context of mineral resources.9. The judgment explored the exception of specific constitutional entries related to taxation, emphasizing the distinct nature of Entry 50, List II read with Entry 54, List I.10. The impact of the Mines and Minerals Act on the State Legislature's power under relevant constitutional entries was thoroughly examined to delineate the legislative boundaries.11. The Court analyzed the effect of limitations imposed by Parliament on the State Legislature's taxing power under Entry 50, List II, highlighting the unique constraints in the realm of mineral development legislation.
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