1

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE/ORIGINAL JURISDICTION

CIVIL APPEAL NOS. 4056-4064 OF 1999

Mineral Area Development Authority etc.       …  

Appellant(s)

                     versus

M/s Steel Authority of India & Ors.       …  

Respondent(s)

with Civil Appeal Nos. 4710-4721 of 1999, Civil Appeal Nos. 4722-4724 of  1999, Civil Appeal No. 1883 of 2006, Transfer Petition (C) No. 722 of  2006, Civil Appeal No. 4745 of 2006, Civil Appeal No. 4990 of 2006,  Civil  Appeal  No.  4991 of  2006, Civil  Appeal  No.  4992 of  2006,  Civil  Appeal No. 4993 of 2006, Transfer Petition (C) No. 951 of 2006, Civil  Appeal No. 5649 of 2006, Civil Appeal No. 5599 of 2006, Civil Appeal  No. 378 of 2007, Civil Appeal No. 665 of 2007, Civil Appeal No. 1180 of  2007, Transfer Petition (C) No. 481 of 2007, Transfer Petition (C) No.  906 of 2007,   Civil Appeal No. 3400 of 2008, Civil Appeal No. 3401 of  2008, Civil Appeal No. 3402 of 2008, Civil Appeal No. 3403 of 2008,  Civil  Appeal  No.  2055 of  2009, Civil  Appeal  No.  2174 of  2009,  Civil  Appeal No. 6498 of 2008, Civil Appeal No. 6137 of 2008, S.L.P. (C) No.  26160 of 2008, Civil Appeal No. 6499 of 2008, Civil Appeal No. 6497 of  2008,             Civil Appeal No. 7397 of 2008, Civil Appeal No. 96 of  2009,  Civil Appeal No. 97 of 2009, Civil Appeal No. 98 of 2009, S.L.P.  (C) No. 3849 of 2006), S.L.P. (C) No. 763 of 2007,  S.L.P. (C) No. 15900  of 2007,  Transfer Petition (C) No. 613 of 2009, Transfer Petition (C) No.  626 of 2009, Civil Appeal No. 4478 of 2010, Civil Appeal No. 4479 of  2010   and   S.L.P. (C) No. 4191 of 2011.

O R D E R

Having heard the matter(s) for considerable length of

2

time,  we  are  of  the  view  that  the  matter  needs  to  be  

considered by the Bench of Nine Judges. The questions of  

law to be decided by the larger Bench are as follows:

1. Whether ‘royalty’ determined under Sections    9/15(3)  

of the Mines and Minerals (Regulation & Development)  

Act,  1957 (Act  67 of  1957,     as amended)  is  in the  

nature of tax?

2. Can the State Legislature while levying a tax on land  

under Entry 49 List II of the Seventh Schedule of the  

Constitution adopt a measure of tax based on the value  

of  the  produce  of  land?  If  yes,  then  would  the  

Constitutional position be any different insofar as the  

tax on land is imposed on mining land on account of  

Entry 50 List II and its interrelation with Entry 54 List  

I?

3. What  is  the  meaning  of  the  expression  “Taxes  on  

mineral  rights  subject  to  any  limitations  imposed  by  

Parliament  by  law  relating  to  mineral  development”  

within the meaning of Entry 50 of List II of the Seventh  

Schedule of the Constitution of India? Does the Mines  

and  Minerals  (Regulation  &  Development)  Act,  1957  

contain any provision which operates as a limitation on  

the field of legislation prescribed in Entry 50 of List II of  

the Seventh Schedule of the Constitution of India? In  

particular, whether Section 9 of the aforementioned Act  

denudes or limits the scope of Entry 50 of List II?

3

4. What is the true nature of royalty / dead rent payable  

on minerals produced / mined / extracted from mines?

5. Whether the majority decision in State of West Bengal  v.  Kesoram Industries Ltd. and Ors, (2004) 10 SCC  201, could be read as departing from the law laid down  

in the  seven Judge  Bench decision in  India Cement  Ltd.  and  Ors.   v.   State  of  Tamil  Nadu and Ors.,  (1990) 1 SCC 12?

6. Whether  “taxes  on lands and buildings”  in  Entry  49,  

List  II  of  the  Seventh  Schedule  to  the  Constitution  

contemplate a tax levied directly on the land as a unit  

having definite relationship with the land?

7. What is the scope of the expression “taxes on mineral  

rights” in Entry 50, List II of the Seventh Schedule to  

the Constitution?

8. Whether  the  expression  “subject  to  any  limitation  

imposed  by  Parliament  by  law  relating  to  mineral  

development” in Entry 50, List II refers to the subject  

matter in Entry 54, List I of the Seventh Schedule to the  

Constitution?

9. Whether Entry 50, List II read with Entry 54, List I of  

the Seventh Schedule to the Constitution constitute an  

exception to the general scheme of Entries relating to  

taxation  being  distinct  from  other  Entries  in  all  the

4

three Lists of the Seventh Schedule to the Constitution  

as enunciated in M.P.V. Sundararamier & Co. v. State  of Andhra Pradesh & Anr., (1958) 1 SCR 1422 at 1481  (bottom)?

10. Whether in view of the declaration under Section 2 of  

the  Mines  and  Minerals  (Development  &  Regulation)  

Act,  1957 made in terms of Entry 54 of List I  of  the  

Seventh  Schedule  to  the  Constitution  and  the  

provisions  of  the  said  Act,  the  State  Legislature  is  

denuded of its power under Entry 23 of List II and/or  

Entry 50 of List II?

11. What is the effect of the expression “…subject to any  

limitation  imposed  by  Parliament  by  law  relating  to  

mineral development” on the taxing power of the State  

Legislature in Entry 50 of List II, particularly in view of  

its uniqueness in the sense that it is the only entry in  

all the entries in three Lists (Lists I, II and III) where the  

taxing power of the State Legislature has been subjected  

to “any limitation imposed by Parliament by law relating  

to mineral development”.

Before concluding, we may clarify that normally the  

Bench of five learned Judges in case of doubt has to invite  

the attention of the Chief Justice and request for the matter  

being placed for hearing before a Bench of larger coram than  

the  Bench  whose  decision  has  come  up  for  consideration

5

(see:  Central  Board  of  Dawoodi  Bohra  Community  and  

Anr.  v.  State of  Maharashtra  and Anr.   –  2005 (2)  SCC  

673). However, in the present case, since prima facie there  

appears  to  be  some  conflict  between  the  decision  of  this  

Court in   State of West Bengal  v.  Kesoram Industries  

Ltd. & Ors. (supra) which decision has been delivered by a  

Bench of five-Judge of this Court and the decision delivered  

by seven-Judge Bench of this Court in  India Cement Ltd.  

and Ors. v. State of Tamil Nadu and Ors.  (supra) reference  

to the Bench of nine-Judge is requested. Office is directed to  

place the matter on the administrative side before the Chief  

Justice for appropriate orders.  

…..…………………………….CJI          (S. H. Kapadia)

……………………..……………..J.        (K.S.  Panicker  

Radhakrishnan)

……..……………………………..J.       (Swatanter Kumar)

New Delhi;  March 30, 2011.