2024 (9) TMI 1388

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....:- "10.1 May kindly be pleased to issue appropriate writ (s)/order/direction declaring the impugned proceeding initiated by the respondent no.-3 vide F.no. IV(16)30-48/Royalty/SCN/Bil/2021-22/872, dated 23.02.2024, (filed as ANNEXURE P-1), along with show cause letter was issued on 20.10.2021 (filed as ANNEXURE P-3) as illegal, arbitrary, without jurisdiction and violative of Finance Act 1994 and consequently set aside the same; 10.2 That, the petitioner further prayed for the entire records of the petitioner's case to be called for. 10.3 Any other relief or reliefs that may be deemed fit and proper in the facts and circumstances of the case may kindly be granted also. 10.4 Cost of the case may also b....

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....ve discussion, we answer the questions formulated in the reference in terms of the following conclusions: a. Royalty is not a tax. Royalty is a contractual consideration paid by the mining lessee to the lessor for enjoyment of mineral rights. The liability to pay royalty arises out of the contractual conditions of the mining lease. The payments made to the Government cannot be deemed to be a tax merely because the statute provides for their recovery as arrears, b. Entry 50 of List Il does not constitute an exception to the position of law laid down in MPV Sundararamier (supra). The legislative power to tax mineral rights vests with the State legislatures. Parliament does not have legislative competence to tax mineral right....

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....50 of List II do not operate on Entry 49 of List II because there is no specific stipulation under the Constitution to that effect, and i. The decisions in India Cement (supra), Orissa Cement (supra), Federation of Mining Associations of Rajasthan (supra), Mahalaxmi Fabric Mills (supra), Saurashtra Cement (supra), Mahanadi Coalfields (supra), and P Kannadasan (supra) are overruled to the extent of the observations made in the present case. 5. Thus, in view of the judgment passed by Hon'ble Supreme Court, that the royalty is not a tax, the contention of the learned counsel for the petitioner that royalty is a tax cannot be appreciated. 6. The learned counsel for the petitioner preposition have not disputed the aforesaid prepos....