1957 (11) TMI 30 - HC - Indian Laws

Validity of Rajasthan Mining Rules Upheld: Royalty Rates Justified

Sethi Marble Stone Industries and Ors. Versus The State of Rajasthan and Ors.

The court upheld the validity of the Rajasthan Minor Mineral Concession Rules, 1955, ruling that the Rajasthan Government had the authority to impose ... - Issues Involved:1. Validity of The Rajasthan Minor Mineral Concession Rules, 1955.2. Authority of the Rajasthan Government to impose royalty.3. Alleged discrimination in the fixation of different rates of royalty.Detailed Analysis:1. Validity of The Rajasthan Minor Mineral Concession Rules, 1955:The petitioners, stone merchants and manufacturers, challenged the validity of the Rajasthan Minor Mineral Concession Rules, 1955 (Rajasthan Rules), arguing that these rules and the royalty imposed under them were ultra vires and void. They contended that the Rajasthan Government lacked the authority to make these rules, asserting that only the Central Government could do so under the Mines and Minerals (Regulation and Development) Act, 1948 (Mines and Minerals Act). The petitioners further argued that Schedule No. I of the Mineral Concession Rules, 1949 (Central Rules) should prevail over the Rajasthan Rules.2. Authority of the Rajasthan Government to Impose Royalty:The court examined whether the Rajasthan Rules were within the legislative authority of the State. Referring to Item No. 54 of List I (Union List) and Item No. 23 of List II (State List) of the Constitution, the court noted that the regulation of mines and mineral development by the State is subject to laws made by Parliament. Section 2 of the Mines and Minerals Act declared it expedient in the public interest for the Central Government to regulate mines and mineral development. However, Rule 4 of the Central Rules specified that these rules do not apply to minor minerals, which are to be regulated by the State Government. The court concluded that the Rajasthan Government was within its authority to make rules concerning minor minerals, as the material in question was a minor mineral. Therefore, the Rajasthan Rules were deemed intra vires and valid, and the rates of royalty prescribed therein were within the State's competence.3. Alleged Discrimination in the Fixation of Different Rates of Royalty:The petitioners argued that the fixation of different rates of royalty for the same goods based on their different uses was discriminatory under Article 14 of the Constitution. The court examined whether the various rates of royalty prescribed in the Schedule applied to the same kind or quality of goods. It found that the classification in Schedule I of the Rajasthan Rules was based on different types or qualities of goods, not on their uses. For instance, different rates were prescribed for 'Building Stone' and 'Lime Stone' based on their quality and market value. The court held that the classification, though not perfectly logical, was not discriminatory as it was based on the quality and market value of the goods. The court also noted that the notification issued by the Mining Engineer was poorly worded but interpreted it to mean that royalty was chargeable on the produce, not on the manufacture.The court dismissed the petitioners' contention that different rates of royalty were discriminatory, stating that the distinction was based on the quality and market value of the goods, not on their uses. The court found no inherent wrong in such a basis of classification and concluded that the different rates of royalty were not violative of the doctrine of discrimination.Conclusion:The court dismissed the writ application, holding that the Rajasthan Minor Mineral Concession Rules, 1955, were within the legislative competence of the State and that the different rates of royalty prescribed therein were not discriminatory. The petition was dismissed with costs.