Recently, the Supreme Court of India has dismissed multiple review petitions challenging its earlier judgement that upheld the right of State legislatures to impose taxes on mineral-bearing lands and quarries.
| Rule 1 of Order XLVII of the Code of Civil Procedure (CPC)
Grounds for Review:
Who can apply: Any person aggrieved by a decree or order:
- From which an appeal is allowed, but no appeal has been preferred.
- From which no appeal is allowed.
- Based on a decision from a reference by a Court of Small Causes.
Conditions for Review:
- Discovery of new and important evidence that could not have been presented earlier with due diligence.
- Presence of a mistake or error on the face of the record.
- Any other sufficient reason.
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Supreme Court Upholds Verdict on Land Taxation, Dismisses Review Petitions
- Reinforcement of Previous Verdict: The Supreme Court reaffirmed its July 25 decision that taxing certain lands is not solely Parliament’s authority.
- Petitioners’ Appeal: The Union government, Karnataka Iron and Steel Manufacturers Association, and others sought a reconsideration of the earlier ruling.
- Majority Decision: The court, led by the Chief Justice of India, found no merit in the petitioners’ arguments and dismissed their review petitions.
- No Error Found: The Bench concluded that there were no significant errors in the previous judgment and that the criteria for a review were not met.
- Dissenting Opinion: Justice B.V. Nagarathna argued that the review petitions should have been heard in open court.
- Final Outcome: Despite the dissenting opinion, the majority ruling prevailed, and the review petitions were dismissed.
Constitutional Provision for Review Petitions
- Review Power of Supreme court: Under Article 137 of the Indian Constitution, the Supreme Court has the power to review its judgments or orders. This is governed by the Supreme Court Rules, where Order XLVII Rule 1 outlines the circumstances under which a review can be sought.
- A review is generally considered only if there is an evident error or new evidence that warrants reconsideration.
The July 25 Judgment and its Significance
- Landmark Decision: The ruling was a significant step in supporting fiscal federalism, ensuring States have the authority to levy taxes on mineral lands and quarries.
- States’ Right to Impose Taxes: The court emphasised that States have the right to impose taxes on mines and quarries within their boundaries.
- It asserted that any restriction on this right would impact the States’ ability to raise revenue.
- MMDR Act and States’ Legislative Power: The judgement clarified that the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) does not prevent States from creating laws and taxing mines and quarries.
- States are free to legislate and tax within their jurisdiction, independent of restrictions from the Centre.
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Mines and Minerals (Development and Regulation) Act, 1957
- The MMDR Act is a significant legislation in India that governs the exploration, development, and regulation of mineral resources.
Key provisions of the MMDR Act include
- Licensing and permits: The Act grants licences and permits for mining operations, subject to certain conditions and requirements.
- Environmental regulations: It mandates mining companies to comply with environmental standards to minimise the impact of mining on the ecosystem.
- Safety standards: The Act sets safety regulations to protect the lives and health of mine workers.
- Rehabilitation of mined areas: It requires mining companies to rehabilitate mined areas after operations cease to restore the land to its original state or a suitable alternative use.
- Conservation of critical minerals: The Act prioritises the conservation of critical minerals that are essential for the country’s economic growth and security.
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States’ Demand for Autonomy in Mineral Taxation
- States’ Desire for Autonomy: States with abundant mineral resources, like Chhattisgarh, Jharkhand, and Odisha, have sought greater control over taxing their mineral wealth.
- Economic Challenges: Despite their resource richness, these States have faced economic difficulties, with lower per capita incomes compared to the national average.
- July 25 Judgment as a Victory: The Supreme Court’s July 25 ruling was seen as a win for these States, as it granted them more fiscal independence by allowing them to tax mining lands.
- Clarification on Prospective Application: Concerns arose about whether the judgement would apply only to future cases.
- The court clarified on August 14 that allowed states to collect dues retrospectively on royalty on mineral-bearing land from Centre, mining companies from April 1, 2005
- Majority Decision: The majority of the judges, except Justice Nagarathna, ruled that the judgement would apply to all relevant cases, ensuring the validity of past State tax laws on mineral lands.
5 Oct 2024
