The Supreme Court of India will hear on May 20 a batch of pleas linked to the legislative authority to tax mineral rights, after the Centre informed the court that its curative petition in the matter is still pending, as per media reports. The issue stems from last year’s landmark ruling that recognised the power of states to levy taxes on mineral bearing land and mineral rights.
The matter was mentioned before a bench of Justices Vikram Nath, Sandeep Mehta and Vijay Bishnoi. Solicitor General Tushar Mehta, appearing for the Centre, requested that the pleas be taken up only after the curative petition is decided. Some lawyers appearing in the matter supported the request and sought a later hearing, while counsel representing certain state authorities opposed any further delay, arguing that the review petitions had already been dismissed earlier.
Centre and States Continue Legal Battle
The dispute traces back to a nine judge Constitution bench ruling delivered on July 25, 2024, which held in an 8:1 majority that states possess the legislative competence to impose taxes on mineral rights. The court observed that Parliament did not have exclusive authority under Entry 54 of the Union List to tax mineral bearing land and mineral rights linked to mining activities.
Following the verdict, review petitions challenging the ruling were dismissed in September 2024. The Centre subsequently moved a curative petition before the apex court seeking reconsideration of the judgement.
In a separate ruling delivered on August 14, 2024, the Supreme Court permitted mineral rich states to recover royalty and tax dues on mineral rights and mineral bearing land from mining companies and the Centre. The recovery relates to dues dating back to April 1, 2005 and is to be staggered over a 12 year period beginning April 1, 2026.
The apex court had also clarified that no interest or penalty would be imposed on demands raised for the period prior to July 25, 2024, taking into account the long standing legal uncertainty surrounding the issue. |
