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PETITIONER: SOUTH EASTERN COALFIELDS LIMITED ETC. ETC.

       Vs.

RESPONDENT: CENTURY TEXTILES AND INDUSTRY LTD. AND ORS.

DATE OF JUDGMENT04/04/1991

BENCH: RANGNATHAN, S. BENCH: RANGNATHAN, S. KASLIWAL, N.M. (J)

CITATION:  1991 AIR 1593            1991 SCR  (2) 188  1992 SCC  Supl.  (1) 460 JT 1991 (2)   595  1991 SCALE  (1)660

ACT:      Constitution of India, 1950; Schedule VII List I  Entry 54  and  List  II Entries 23, 49, 50  and  66-Mineral  areas development-Cess    imposition   of-Competency   of    state Legislature of legislate.      Article  142,  246  and 265 -  Statute  declaration  of invalidity    Refund-Whether   automatic   and    inevitable consequence.      Madhya Pradesh Karadhan Adhiniyam 1982 |Madhya  Pradesh Areas  Development Cess Rules 1982-Ss.8,9|  Rule  10-Mineral Areas development-Cess-Imposition of.

HEADNOTE:      The  levy  of cess under the  Madhya  Pradesh  Karadhan Adhiniyam  1982  is not a valid levy has been  held  by  the Madhya Pradesh High Court in Hiralal v. State of M.P.,  1986 MPL  J/514 and this has been confirmed by this Court in  its judgement dated April 4, 1991 in the appeal preferred by the State of Madhya Pradesh.      Despite  the  judgement  of  High  Court  the   amounts collected  from various assessees had not be refunded.   The State was continuing to collect the cess on the strength  of interim orders in an appeal filed in this Court.      The  State  Government  and  the  Coalfields  concerned preferred petitions for leave to appeal to this Court.      Disposing of the appeals, this Court,      Held  (1) The collection of any cess under  the  Madhya Pradesh  Karadhan Adhiniyam 1982 subsequent to the  date  of the judgement of the Madhya Pradesh High Court in  Hiralal’s case 1986 MPLJ514 cannot be upheld.[190D]      (2) The respondents will not be entitled to the  refund of  any  cess paid or collected prior to the  date  of  said judgment.  They would however, be entitled to the refund  of the amounts collected subsequent to                                                        189 that date from the Coalfields or the State, as the case  may be,  along  with  the interest in cases where  there  is  an interim direction or undertaking to pay such interest at the dates specified in such direction or undertaking.[190E]

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JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5501 of 1990 etc. etc.      From  the  Judgment and Order dated  22.8.1990  of  the Madhya Pradesh High Court in Misc P.N. 845 of 1990.      R.B.  Datar, Satish Agnihotri, P.S. Nair,  T.G.N.  Nair and Shri Narain for the Appellant.      R.F.  Nariman,  Abhay Sapre, Sandeep  Narain  and  S.K. Agnihotri for the Respondents.      The Judgement of the Court was delivered by      RANGANATHAN,J.  These Civil Appeals and SLPs raise  the same  issues  as have been dealt by us in our  judgement  of even  date  in  Civil Appeal No. 1640 to 1662  of  1986  and connected cases.  They arise in the following circumstances.      In  the  connected judgment referred to above  we  have held that the levy of cess under the Madhya Pradesh Karadhan Adhiniyam,  1982 (Act 15 of 19820 is not a valid  levy.   In fact it had been so held by the Madhya Pradesh High Court in Hiralal  v.  State  of M.P., [1986] MPLJ  514.   The  appeal preferred  by the State of Madhya Pradesh has been  disposed of by us in the connected batch of cases above referred to.      Despite  the  judgment of the High  Court  the  amounts collected  from various assessees had not been refunded;  on the contrary, the State appears to have continued collecting the  cess apparently on the strength of the  interim  orders obtained  in one of the above appeals viz. C.A. No.  1649/86 though,  as pointed out by us in the connected judgement  no such  modification seems to have been ordered by this  Court of the initial order of 2.5.86.      In  April/May, 1990, some of the assessees  filed  writ petitions  in  the  High  Court  challenging  the  continued recovery  of the cess and asking for the refund  of  amounts already collected.  The respondents brought to the notice of the Court the orders of this Court in the                                                        190 earlier  matter and pleaded that since the collections  were being made in pursuance of the orders of this Court the writ petitions could not be entertained.  The High Court rejected the  respondent’s plea and allowed the writ petitions.   The Coalfields concerned and the State Government have preferred petitions  for leave to appeal from the order dated  28.7.90 and  22.8.90  in these cases.  In one set of  these  appeals lave has been granted by us earlier:C.A. Nos. 5501 and  5502 of  1990.   The  other  SLPs  had  been  listed  before   us subsequent to our hearing the main appeals and it was agreed that  suitable orders may be passed thereon in the light  of the  conclusion we reach in the main batch of  appeals.   we grant  leave to appeal in  all the Special  Leave  Petitions and proceed to dispose of all the appeals by this judgment.      These  appeals have to be disposed of in the  light  of our  judgment  in the connected batch of cases  referred  to above.   We have held there that the collection of any  cess under Act 15 of 1982 subsequent to the date of the judgement of  the Madhya Pradesh High Court in Hiralal’s  case  [1986] MPLJ  514 cannot be upheld.  For the reasons set out in  the judgment   in  the  connected  cases,s  we  hold  that   the appellant  will  not be entitled to the refund of  any  cess paid  or collected prior to the date of the  said  judgment. They  would,  however,  be entitled to  the  refund  of  the amounts   collected  subsequent  to  that  date   from   the coalfields  or  the  State, as the  case  may  be  alongwith interest  in  cases were there is an  interim  direction  or undertaking  to pay such interest at the rates specified  in such direction or undertaking.

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    With these observations these appeals are disposed of. V.P.R.                               Appeals disposed of.                                                        191