ORISSA CEMENT LTD AND ORS. ETC. ETC versus STATE OF ORISSA AND ORS. ETC. ETC.

ORISSA CEMENT LTD AND ORS. ETC. ETC versus STATE OF ORISSA AND ORS. ETC. ETC.

The levy of cess based on royalty from mining lands by the States of Orissa, Bihar, and Madhya Pradesh is beyond the legislative competence of the State Legislature, being outside the permissible entries in the State List and encroaching upon the field occupied by the Mines and Minerals (Regulation and Development) Act, 1957. Such levy cannot be sustained as either a tax or a fee concerning land or minerals, nor as a tax on royalties. Refund of unconstitutional levy is not an automatic consequence and remains at the discretion of the Court, taking into account undertakings, relevant dates, and interests of justice.

Parties
Appellant: Orissa Cement Ltd; Respondent: State of Orissa
Jurisdiction
India
Judgment Date
04 April 1991
Procedural Posture
Appeals and Writ Petitions / Final Judgment
Outcome
appeals disposed of; levy declared unconstitutional; limited refund ordered
Legal Topics
Legislative Competence, Tax Versus Fee, Occupied Field Doctrine, Refund of Unconstitutional Levy, Mineral Royalties, State Versus Central Powers
Constitutional Law Taxation Administrative Law Legislative Competence Tax Versus Fee Occupied Field Doctrine Refund of Unconstitutional Levy Mineral Royalties +1 more

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Parties

Orissa Cement Ltd

Appellant

State of Orissa

Respondent

Procedural Posture

Appeals and Writ Petitions / Final Judgment

Legal Issues

  1. 1 Constitutional validity of cess levied by State statutes based on mining royalties
  2. 2 Whether such cess is within State legislative competence under the Constitution
  3. 3 Whether refund is automatic consequence of illegality declaration

Ratio Decidendi

The levy of cess based on royalty from mining lands by the States of Orissa, Bihar, and Madhya Pradesh is beyond the legislative competence of the State Legislature, being outside the permissible entries in the State List and encroaching upon the field occupied by the Mines and Minerals (Regulation and Development) Act, 1957. Such levy cannot be sustained as either a tax or a fee concerning land or minerals, nor as a tax on royalties. Refund of unconstitutional levy is not an automatic consequence and remains at the discretion of the Court, taking into account undertakings, relevant dates, and interests of justice.

Court Disposition

appeals disposed of; levy declared unconstitutional; limited refund ordered

Orders

  • Levy of cess under Orissa Cess Act, 1962, Bengal Cess Act, 1880, Madhya Pradesh Upkar Adhiniyam, 1981, and Madhya Pradesh Karadhan Adhiniyam, 1982 declared unconstitutional and invalid.
  • No direction to refund cess collected until the date of relevant High Court judgment or this Supreme Court judgment.