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Issues: Whether royalty under Section 9(1) of the Mines and Minerals (Regulation and Development) Act, 1957 is payable on the quantity of mineral extracted from the leased area before processing, or only on the quantity remaining after processing and removal of waste and foreign matter.
Analysis: Section 9(1) requires payment of royalty in respect of any mineral removed or consumed from the leased area. The mineral in question underwent crushing and screening before being taken out of the leased area, and the Court treated such processing as consumption within the meaning of the provision. The distinction drawn by the High Court between removal from the mine and removal from the leased area was rejected, because royalty is attracted by removal or consumption from the leased area, not by the post-processing quantity alone.
Conclusion: Royalty was payable on the entire mineral extracted before processing, and the demands could not be restricted to the processed quantity; the decision was in favour of the Revenue.
Ratio Decidendi: Where the governing provision imposes royalty on mineral removed or consumed from the leased area, processing undertaken before removal that consumes part of the mineral does not reduce the royalty base to the post-processing quantity alone.
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