State competence over minor minerals upheld; royalty classification based on quality and market value did not breach Article 14.

Where a central mineral regulatory scheme expressly leaves minor minerals to State regulation, the State has legislative competence to frame rules and levy royalty for those minerals. The Rajasthan Minor Mineral Concession Rules, 1955 and the royalty notification were therefore upheld as valid. The Article 14 challenge also failed because the rate structure was based on the nature, quality and market value of different stones, not on an arbitrary distinction between the same commodity; differential end-use did not make the classification discriminatory. The notification was further read as charging royalty on the produce of stone, not on manufacture, and no basis was found to strike it down on the facts presented.

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Issues: Whether the Rajasthan Minor Mineral Concession Rules, 1955 and the royalty notification issued thereunder were ultra vires for want of State legislative competence, and whether the differential royalty rates offended Article 14 of the Constitution of India.

Analysis: The field of regulation of mines and mineral development under the Union List and State List was examined in the light of the Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949. The Central enactment and the Central Rules were held to govern minerals brought under Union control, but the Rules expressly excluded minor minerals and left their extraction to be regulated by the State Government. On that basis, the State was held competent to frame its own rules for minor minerals and to prescribe royalty rates. The challenge under Article 14 also failed because the Schedule did not, in substance, impose different rates on the same commodity merely by reference to use; rather, it classified different kinds of stone by quality, nature and market value. The rate structure was therefore not treated as discriminatory. The notification was further construed as charging royalty on the produce of stone and not on manufacture, and no ground was found to strike it down on the facts presented.

Conclusion: The Rajasthan Rules were held valid, the royalty notification was upheld, and the challenge based on Article 14 was rejected.

Final Conclusion: The writ application failed in its entirety, leaving the State's power to regulate minor minerals and levy royalty under the impugned regime undisturbed.

Ratio Decidendi: Where a central mineral regulatory scheme expressly leaves minor minerals to be regulated by the State, the State has legislative competence to frame rules and levy royalty for those minerals, and a classification based on the nature, quality and market value of the mineral does not violate Article 14 merely because different end-uses attract different rates.

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