Royalty on minerals, delegated rate-setting and classification upheld, but the 1970 enhancement failed for breach of the statutory time limit.

Royalty payable on minerals under the Act is treated as the price or share for minerals won from the sub-soil, not as a tax on mineral rights, so the scheme fell within Union competence and did not amount to excessive delegation. The power to vary royalty validly extended to fixed-rate fixation, rational classification of limestone into grades, and grant of rebate. However, the 1970 notification enhancing royalty was issued in breach of the four-year restriction in section 9(3) and was therefore ultra vires and unenforceable. The challenge to the Thirty-ninth Constitutional Amendment and the remaining notifications failed.

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Issues: (i) whether the Thirty-ninth Constitutional Amendment inserting the Act in the Ninth Schedule was unconstitutional; (ii) whether the 1970 notification enhancing royalty was invalid for breach of the four-year limitation in section 9(3); (iii) whether the earlier notifications and the scheme of royalty fixation, classification of limestone and grant of rebate were beyond the power conferred by section 9(3) or offended legislative competence and the rule against excessive delegation.

Issue (i): Whether the Thirty-ninth Constitutional Amendment inserting the Act in the Ninth Schedule was unconstitutional.

Analysis: The protection afforded by Article 31B insulated the Act from challenge on the footing of infringement of Part III rights. The challenge based on Article 14 and the basic structure doctrine was not substantiated and no persuasive basis was shown for invalidating the constitutional amendment.

Conclusion: The challenge to the Thirty-ninth Constitutional Amendment failed and was rejected.

Issue (ii): Whether the 1970 notification enhancing royalty was invalid for breach of the four-year limitation in section 9(3).

Analysis: Section 9(3) contained a proviso that royalty could not be enhanced more than once during any period of four years. The 1970 notification was issued and brought into force within four years of the 1968 notification. The earlier notifications of 1962 and 1968 were outside that restriction, but the 1970 notification was not. Since the later notification was made contrary to the statutory limitation, it was void.

Conclusion: The 1970 notification was ultra vires section 9(3) and unenforceable.

Issue (iii): Whether the earlier notifications and the scheme of royalty fixation, classification of limestone and grant of rebate were beyond the power conferred by section 9(3) or offended legislative competence and the rule against excessive delegation.

Analysis: Royalty under section 9 was treated as the price or share payable for minerals won from the soil, not as a tax on mineral rights. The subject therefore fell within Entry 54 of the Union List and not Entry 50 of the State List. The power to enhance or reduce royalty included the ability to adopt a fixed-rate method, to classify limestone into grades for differential rates, and to grant rebate on a rational basis. These measures did not amount to a change of legislative policy or excessive delegation, especially in view of parliamentary scrutiny under section 28.

Conclusion: The challenge to the earlier notifications, the classification of limestone, the rebate, and the alleged want of legislative competence failed and was rejected.

Final Conclusion: Only the 1970 notification could not stand in law. The remaining constitutional and statutory challenges to the royalty scheme were unsuccessful, so the petition succeeded only to the limited extent of striking down that notification.

Ratio Decidendi: Royalty payable on minerals under the Act is a payment for minerals won from the sub-soil and not a tax on mineral rights; a delegated power to alter royalty rates may validly include rational classification, differential rates and rebate, but a notification issued in breach of the statutory time restriction is void.

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