TaxTMI 
TaxTMI 
2014 (4) TMI 64
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....revity 'the Act') which provides for levy of cess on mineral rights. The respondent was granted a mining lease for extraction on major minerals. As per the amendment brought in the year 2008 it was required to pay the environment and health cess imposed under Section 16 of the Act. The State Government, in exercise of the powers conferred by Section 19 of the Act, framed a set of rules called Rajasthan Environment and Health Cess Rules, 2008 (for short "the Rules"). Rule 13 of the Rules provides for the head under which the cess collected under Section 16 of the Act is to be credited. Rule 14 of the Rules provides for the allocation of the funds for implementation of environment and health projects in mining areas in various parts of the State. Questioning the constitutional validity of the impost under the Act it was contended before the High Court that the State Legislature had no competence to impose environment and health cess on major minerals as the field is occupied by the provisions contained in the Mines and Minerals (Development and Regulation) Act, 1957 (for short 'the MMDR Act'), which is an enactment by the Parliament. It was urged that the imposition of such cess is n....
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.... a wide connotation. Land remains land though it may be subjected to different user. The nature of user of the land would not enable a piece of land being taken out of the meaning of land itself. Different uses to which the land is subjected or is capable of being subjected provide the basis for classifying land into different identifiable groups for the purpose of taxation. The nature of user of one piece of land would enable that piece of land being classified separately from another piece of land which is being subjected to another kind of user, though the two pieces of land are identically situated except for the difference in nature of user. The tax would remain a tax on land and would not become a tax on the nature of its user. (7) To be a tax on land, the levy must have some direct and definite relationship with the land. So long as the tax is a tax on land by bearing such relationship with the land, it is open for the legislature for the purpose of levying tax to adopt any one of the well known modes of determining the value of the land such as annual or capital value of the land or its productivity. The methodology adopted, having an indirect relationship with the land, w....
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....g as a tax or fee on mineral rights remains in pith and substance a tax for augmenting the revenue resources of the State or a fee for rendering services by the State and it does not impinge upon regulation of mines and mineral development or upon control of industry by the Central Government, it is not unconstitutional. 8. Thereafter, the Court adverted to individual cases, namely, coal matters, tea matters, brick earth matters, mining and mineral matters and then addressed itself to the purpose behind the MMRD Act and, eventually, came to hold as follows:- "147. Royalty is not a tax. The impugned cess by no stretch of imagination can be called a tax on tax. The impugned levy also does not have the effect of increasing the royalty. Simply because the royalty is levied by reference to the quantity of the minerals produced and the impugned cess too is quantified by taking into consideration the same quantity of the mineral produced, the latter does not become royalty. The former is the rent of the land on which the mine is situated or the price of the privilege of winning the minerals from the land parted with by the Government in favour of the mining lessee. The cess is a levy on....
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....ect that it cannot have retrospective effect is valid and justified or warrants any interference. 11. We have heard Dr. Manish Singhvi, learned counsel for the appellants and Ms. Shweta Garg, learned counsel for the respondents. 12. Before we appreciate the controversy that has travelled to this Court, we think it necessary to state the fundamental principles that serve as guidance to understand the fiscal legislations and the duty of the Court while dwelling upon the interpretation of taxing statutes. 13. In A.V. Fernandez v. The State of Kerala AIR 1957 SC 657, Bhagwati, J. referred to a passage from Partington v. The Attorney General (1869) 4 H L 100 at p. 122(B) which is as follows: - "As I understand the principle of all fiscal legislation it is this : if the person sought to be taxed, comes within the letter of the law he must be taxed however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be." 14. The said passage, as has been stated in the sa....
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....l mind to be. On the other hand, if the Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. In other words, if there be admissible in any statute, what is called an equitable, construction, certainly, such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute." VISCOUNT SIMON quoted with approval a passage from Rowlatt, J. expressing the principle in the following words : "In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." Relying upon this passage Lord Upjohn said : "Fiscal measures are not built upon any theory of taxation"." This passage presently finds place at page 826, Twelfth Edition 2012 of "Principle of Statutory Interpretation" by G.P. Singh. 17. In Commissioner of Wealth Tax, Gujarat-III, Ahmedabad v. Ellis Bridge Gymkhana AIR 1998 SC 120, it has been observed thus....
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....exercise of power under Section 16 of the Act for imposing a levy at a particular rate on certain major minerals. By bringing the amendment on 23.1.2009 the rate of tax in respect of Rock Phosphate was increased to Rs.500/- per tonne with retrospective effect. 22. There is no dispute over the fact that a legislature can make a law retrospectively or prospectively subject to justifiability and acceptability within the constitutional parameters. A subordinate legislation can be given retrospective effect if a power in this behalf is contained in the principal Act. In this regard we may refer with profit to the decision in Mahabir Vegetable Oils (P) Ltd. and another v. State of Haryana and Others (2006) 3 SCC 620, wherein it has been held that:- "We may at this stage consider the effect of omission of the said note. It is beyond any cavil that a subordinate legislation can be given a retrospective effect and retroactive operation, if any power in this behalf is contained in the main Act. The rule-making power is a species of delegated legislation. A delegatee therefore can make rules only within the four corners thereof. 42. It is a fundamental rule of law that no statute shall be ....
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.... notification within the said parameters. In the case at hand, the High Court interpreting Section 16 has opined that such a power has not been conferred on the Government to issue a notification retrospectively and, therefore, it can only apply with prospective effect. Dr. Manish Singhvi, learned counsel appearing for the State, has submitted that wherever a statutory power is conferred, there is no limitation with regard to exercise of that power and the same could be exercised from time to time and even if the words "time to time" are absent in the statute, the power conferred under the Act could be exercised all over again and there is no limitation to the number of times the power is exercised and if the power is exercised once, it cannot be stated that the power stands exhausted. It is his submission that the administrative power as well as quasi-legislative power could be exercised any number of times and this principle is embodied under Section 21 of the General Clauses Act. The learned counsel would further contend that even if the words "time to time" would not have been there in Section 16 of the Act, the power could be exercised any number of times. To bolster his submi....
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....d ruled thus: - "The operation of the notification itself is not retrospective. It only brings the Act into operation on and from an earlier date. In any case it was in terms authorised to issue the notification bringing the Act into force on any date subsequent to the passing of the Act and that is all that the Government did." 30. On a seemly appreciation of the ratio laid down in that case, we have no trace of doubt in our mind that the said decision has no applicability to the facts in the case at hand. As is evident, the notification giving effect to the enactment was prior to the date of issue of notification but much after the legislature had passed the enactment and further the language employed in the Act was quite different. Hence, it can be stated with certitude that the said decision does not further the point urged by the learned counsel for the State. 31. The authority in D.G. Gose and Co. (Agents) Pvt. Ltd. (supra), has been commended to us by the learned counsel for the State, as we understand, to substantiate the point that a levy can always be imposed at any point of time even from the retrospective date unless it is grossly unreasonable. He has specifically dr....
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.... the legislative competence of the State legislature." 32. We have already stated that there can be no cavil that the legislature has the authority to pass a law both retrospectively and prospectively within the constitutional parameters. In the aforesaid case the legislature had passed the law with retrospective effect. The Court opined that the same did not affect the vested rights as nothing had been done earlier and hence, no right had vested in the citizens. We may, in addition, state that the said enactment was treated to be valid as it did not invite the wrath of Article 14 of the Constitution. In the case at hand, we are really not testing the retrospective applicability of the law made by the legislature but a notification issued by the State Government in exercise of power conferred under a statutory provision. Needless to say, there is a sea of difference between the two and hence, the aforesaid authority is of no assistance to the learned counsel for the State. 33. The next submission pertains to the principle embodied under Sections 14 and 21 of the General Clauses Act to bolster the stand that the power conferred under the statute can be exercised time and again and....
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....ereign legislature, subordinate legislation made by a delegate cannot have retrospective effect unless the rule-making power in the concerned statute expressly or by necessary implication confers power in this behalf. After stating the abovesaid proposition the learned Judges referred to Section 62 of the relevant Act which empowered the State Government to make rules for the purpose of carrying out the provisions of the Act and in that context, observed that the said rule may regulate the amount of fee, the terms and conditions of licences and scale of fees and the manner of fixing the fees payable in respect of such licences, but the said provision by itself did not expressly grant power to make retrospective rules. Thereafter, the bench referred to Section 63 which read thus: - "all rules made and notifications issued under this Act shall be published in the Official Gazette, and shall have effect from the date of such publication or from such other date as may be specified in that behalf." 35. Interpreting the said Section, the Court opined thus: - "Clearly the Legislature has empowered its delegate, the State Government, not merely to make the rules but to give effect to th....
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....o clarify further, if there is an imposition of Rs.35 it can be varied as the occasion may arise. The rate fixed can be varied, changed or modified from time to time. We really cannot discern from the language employed in the said provision that because of the use of the words "time to time" a notification can be issued imposing a rate of tax with retrospective effect or apply the notification retrospectively. A notification can only be issued, as we perceive, prospectively, and we are inclined to think so as legislature has deliberately used the words "from time to time" and not the language as is noticed in Tikamdas (supra). 37. We are disposed to think that the words "from time to time" in law have a different connotation. In this regards we may refer with profit to certain authorities in the field. In Kashmir Singh v. Union of India and others (2008) 7 SCC 259, question arose whether rule of perpetuity would be applicable in respect of a member of a Sikh Judicial Commission constituted under the Sikh Gurdwaras Act, 1925 and in that context the words used "from time to time" that find place in Sections 40 and 70 of Punjab Reorganisation Act, 1996 fell for interpretation. A cont....
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....h Industrial Employment (Standing Orders) Act, 1961. After stating the facts the Court observed thus: - "43. The power of the Board, therefore, to lay down the conditions of service of its employees either in terms of regulation or otherwise would be subject only to any valid law to the contrary operating in the field. Agreement within the meaning of the proviso appended to Standing Order 14-A is not a law and, thus, the Regulations made by the Board shall prevail thereover. 44. The Board has power to make regulations which having regard to the provisions of the General Clauses Act would mean that they can make such regulations from time to time." 39. The aforesaid decision is referred to solely for the purpose that the words, namely, "from time to time" may be associated with any number of times, of course subject to the principle of reasonableness and its impact but does not engulf the spectrum of retrospectivity or retroactivity in its ambit and sweep. 40. In Shree Sidhbali Steels Limited and Others v. State of Uttar Pradesh and Others (2011) 3 SCC 193, the Court in a writ petition preferred under Article 32 of the Constitution was dealing with the issue of justifiability of....
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....the Act of 1948, can be exercised from time to time if circumstances so require." After so stating the learned Judges analysed the scope of Section 21 of the General Clauses Act and opined that Section 21 embodies a rule of construction and the nature and extent of its application must be governed by the relevant statute which confers the power to issue the notification, etc. Thereafter, the court enumerated the principle thus:- "...there is no manner of doubt that the exercise of power to make subordinate legislation includes the power to rescind the same. This is made clear by Section 21. On that analogy an administrative decision is revocable while a judicial decision is not revocable except in special circumstances. Exercise of power of a subordinate legislation will be prospective and cannot be retrospective unless the statute authorises such an exercise expressly or by necessary implication." Analysing further the learned Judges opined that by virtue of Sections 14 and 21 of the General Clauses Act, when a power is conferred on an authority to do a particular act, such power can be exercised from time to time and carries with it the power to withdraw, modify, amend or canc....
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.... in Acts1898, c. 123, para 95, which directs the police commissioners of Baltimore, at the request of the park commissioners, to detail from time to time members of regular police force for preservation of order in the parks. Upshur v. City of Baltimore, 51 A. 953, 955, 94 Md. 743." xxx xxx xxx xxx "The county board of supervisors had no authority to alter an election precinct in September, under statute providing that board may, from time to time, change the boundaries of precincts and providing that changes might be made at regular or special meeting in July, since the two provisions were in pari materia and should be construed together in the light of all the provisions of the statute, the words "from time to time" meaning "at times to recur," and not "at any time." Laws 1885, p. 193 para 29, Laws 1871-72, p. 380, para 30, S.H.A. ch. 46, para 29, 30. County Board of Union County v. Short, 77 Ill App. 448." 42. In The Law Lexicon, The Encyclopedic Law Dictionary: (2nd edition, 1997, page 764), the words have been conferred the following meaning:- "From time to time - "as occasion may arise". The words "from time to time" mean that an adjournment may be made as and when the o....