Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 – Explanation appended to r.38 – Mineral Conservation and Development Rules, 2017 – Explanation to r.45(8)(a) – Constitutional validity of – Writ petition that the Explanation appended to r.38 of the 2016 Rules and the Explanation appended to r.45(8)(a) of the 2017 Rules, both of which include the payments made towards royalty, District Mineral Foundation-DMF and National Mineral Exploration Trust-NMET as a component of the sale value, while computing the average sale price, violative of Arts.14 and 19(1)(g) as being manifestly arbitrary, and ultra vires s.9 of the MMDR Act, since s.9 read with the Schedule is based on the concept of ad valorem:
Held: Explanation to r.38 of the 2016 Rules and r.45(8)(a) of the 2017 Rules, insofar as they provide for inclusion of royalty and payments made towards District Mineral Foundation-DMF and National Mineral Exploration Trust-NMET in the sale value for computing the average sale price for determination of royalty, is constitutional and valid – Impugned Rules not violative of Arts.14 and 19(1)(g) – Impugned provisions not ultra vires s.9 of the MMDR Act – Measure of levy and the decision not to exclude royalty and payments made towards DMF and NMET not arbitrary and has nexus and rational connection with the nature of the levy – Measure adopted in the Explanations to r.38 of the 2016 Rules and r.45(8)(a) of the 2017 Rules for computation of sale value which, in turn, is an essential factor in computation of the Average Sale Price-ASP, fully justified – Nothing capricious or irrational about the measure and it cannot be said that it has been adopted without any determining principle nor the measure excessive or disproportionate for it to be characterized as manifestly arbitrary – Comparison with coal completely unjustified as there is no concept of ASP in coal and that too based on data given by the miners – As a means to check evasion, a measure has been prescribed under which ad valorem will be arrived at to check manipulation and to strike at evasion, certain factors have been loaded on to the sale value and nothing illegal in the same – Measure of levy, as provided, read with the explanation, is intended to ensure that, to the extent possible, loss of revenue is offset – Such loss of revenue occurs due to manipulation of prices – When a measure of levy is prescribed to check evasion, individual hardships cannot be determinative – Afterall, the grundnorm is “Salus populi suprema lex”-regard for the public welfare is the highest law – Private rights will have to cede to public interest – Constitutional Court called upon to pronounce on the validity of such fiscal measures should be loath to interfere, for any interference in the absence of legitimate grounds would put public interest in jeopardy – Thus, measure not unreasonable or disproportionate, and no infirmity in the impugned provisions – Constitution of India – Mines and Minerals (Development and Regulation) Act, 1957. [Paras 92, 94-97, 100, 103]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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