Territorial limits on minor mineral rules bar seizure and penalty for Kerala granite moving through Tamil Nadu.

Tamil Nadu minor mineral rules could not be applied to an inter-State movement of granite quarried in Kerala and covered by valid Kerala permits. Because the consignment was transported through Tamil Nadu on its way to Andhra Pradesh, the Court held that Rule 1(2) of the Tamil Nadu Minor Mineral Concession Rules, 1959 was territorially confined to Tamil Nadu and did not authorise seizure, seigniorage fee or penalty. Section 21(4) of the Mines and Minerals (Development and Regulation) Act, 1957 was also held inapplicable on these facts, so the seizure, demand and penalty were without jurisdiction and liable to be quashed.

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Issues: Whether the Tamil Nadu authorities had jurisdiction to seize the granite consignment and levy seigniorage fee and penalty on granite of Kerala origin in the course of an inter-State movement.

Analysis: The consignment was covered by a valid quarrying lease, bulk permit, cash memorandum and allied transport documents issued by the Kerala authorities. The granite was admittedly quarried in Kerala and was being transported to Andhra Pradesh through Tamil Nadu. Rule 1(2) of the Tamil Nadu Minor Mineral Concession Rules, 1959 limits their operation to the State of Tamil Nadu, and the Court held that those Rules could not be applied to an inter-State movement of Kerala-origin granite. On that basis, the demand for seigniorage fee and the imposition of penalty under the Tamil Nadu Rules were without authority. The reliance on Section 21(4) of the Mines and Minerals (Development and Regulation) Act, 1957 was also held to be inapplicable to the facts.

Conclusion: The seizure, demand and penalty were held to be without jurisdiction and liable to be quashed.

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