Supreme Court agrees to set up Bench to hear pleas of States on recovery of royalty, tax dues on minerals

Supreme Court clarifies mineral-rich states can recover royalty and tax dues on mineral rights from Centre and mining firms.

The Supreme Court on Wednesday (September 11, 2024) said it will set up a Bench to hear subsequent pleas of mineral-rich States like Jharkhand seeking to recover royalty and tax dues on mineral rights and mineral-bearing lands worth thousands of crore of rupees from the Centre and mining firms.

On July 25, a nine-judge Bench headed by Chief Justice D.Y. Chandrachud, in a majority 8:1 verdict, had ruled that the legislative power to tax mineral rights vests in States and not Parliament.

In a subsequent order on August 14, the top court clarified that the judgement will not have prospective effect and permitted mineral-rich states recover from the Centre and mining firms the royalty and tax dues on mineral rights and mineral-bearing lands worth thousands of crore of rupees since April 1, 2005 over a period of 12 years.

On Wednesday, senior advocate Rakesh Dwivedi, appearing for Jharkhand, urged the bench comprising the CJI and Justices J.B. Pardiwala and Manoj Misra to allocate the pleas, relating to recovery of dues and the legal impediments in realising them, to a bench.

"This is regarding subsequent steps after the nine-judge Bench judgement. All the matters are now put together," the senior lawyer said.

Senior lawyer Abhishek Singhvi, appearing for some private mining firms, said now the States wanted realisation of money. "I will assign (the bench), preferably one of the judges, who was with us on the (Constitution) bench to hear it," the CJI said.

Post the July 25 judgement that held that the States have the power to levy tax and royalty, Mr. Dwivedi had referred to legal impediments coming in the way of Jharkhand in levy tax on minerals and mineral-bearing lands.