Enhanced royalty cannot operate before separate area notification where the higher rate depends on identified notified areas.

Enhanced royalty under the 24.3.2001 notification could not be recovered for any period before the relevant area was separately notified on 26.12.2001. The Court treated the separate area notification as a condition for lawful operation of the higher rate and held that charging the enhanced liability earlier would give the notification impermissible retrospective effect. The higher royalty therefore became payable only from 26.12.2001, and the pre-26.12.2001 demand was set aside while liability from that date was maintained.

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Issues: Whether the enhanced royalty rate under the notification dated 24.3.2001 could be recovered for the period before the area was specifically notified on 26.12.2001.

Analysis: The lease related to pebbles from the Pandai river basin and the higher rate was introduced by the notification dated 24.3.2001 with a note requiring identified areas to be notified separately. The decisive question was the date from which the enhanced rate could lawfully operate. The separate notification identifying the relevant area was issued only on 26.12.2001, and the Court held that recovery at the higher rate before that date would amount to giving the notification an impermissible retrospective effect. The rate could validly apply only after the area was notified.

Conclusion: The enhanced royalty rate was not recoverable for the period prior to 26.12.2001 and became payable only from that date.

Final Conclusion: The appeals succeeded to the extent that the demand for the enhanced rate before 26.12.2001 was set aside, while liability at the higher rate from 26.12.2001 was upheld.

Ratio Decidendi: Where a notification makes enhanced liability contingent upon separate identification of notified areas, the higher rate cannot be enforced for any period before the relevant area is actually notified.

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