STATE OF ORISSA AND ORS. versus MAHANADI COALFIELDS LTD. AND ORS.

STATE OF ORISSA AND ORS. versus MAHANADI COALFIELDS LTD. AND ORS.

The Orissa Rural Employment, Education and Production Act, 1992 is ultra vires the State Legislature insofar as it imposes a tax on coal bearing and mineral bearing lands; the field is fully covered by Parliamentary legislation, specifically the Mines and Minerals (Regulation & Development) Act, 1957, and thus the State is deprived of competence to legislate in this matter.

Parties
Appellant: State of Orissa; Respondent: Mahanadi Coalfields Ltd.; Respondent: Union of India; Respondent: Traders and consumers of coal
Jurisdiction
India
Judgment Date
21 April 1995
Procedural Posture
Civil Appeal / Supreme Court Final Disposition
Outcome
appeal dismissed
Legal Topics
Legislative Competence, Tax on Mineral Rights, State Vs Union Legislative Entries, Levy of Tax on Coal Bearing Lands, Mines and Minerals (regulation & Development) Act
Constitutional Law Taxation Law Mining Law Legislative Competence Tax on Mineral Rights State Vs Union Legislative Entries Levy of Tax on Coal Bearing Lands Mines and Minerals (regulation & Development) Act

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Parties

State of Orissa

Appellant

Mahanadi Coalfields Ltd.

Respondent

Union of India

Respondent

Traders and consumers of coal

Respondent

Procedural Posture

Civil Appeal / Supreme Court Final Disposition

Legal Issues

  1. 1 Whether the Orissa Rural Employment, Education and Production Act, 1992 is within legislative competence of the State Legislature to levy tax on coal bearing lands
  2. 2 Whether the levy is discriminatory and hit by Article 14 of the Constitution of India

Ratio Decidendi

The Orissa Rural Employment, Education and Production Act, 1992 is ultra vires the State Legislature insofar as it imposes a tax on coal bearing and mineral bearing lands; the field is fully covered by Parliamentary legislation, specifically the Mines and Minerals (Regulation & Development) Act, 1957, and thus the State is deprived of competence to legislate in this matter.

Court Disposition

appeal dismissed

Orders

  • Section 3(2)(c) of the impugned Act and the Schedule levying Rs. 32,000 per acre on coal bearing land are declared illegal and ultra vires.
  • Consequential demand notices and certificate proceedings under the Act are declared illegal and invalid.