Mining levy trial pits BJP-led Odisha, TDP’s AP against Centre
The hearing in Supreme Court on Wednesday on whether the court’s verdict allowing states to collect royalty on minerals extracted from their jurisdiction as well as tax on mineral-bearing tracts could be applied retrospectively saw BJP-governed Odisha, partner TDP-led Andhra Pradesh and some local bodies diverging from the stand of the BJP-led central coalition.
The Chandrababu Naidu government opposed the Centre’s fervent plea for prospective implementation of a nine-judge SC bench’s ruling empowering states to levy royalty and tax on minerals, which has been unpaid for the last 35 years and could run into lakhs of crores of rupees.
The difference was palpable before a bench of CJI D Y Chandrachud and Justices Hrishikesh Roy, A S Oka, B V Nagarathna, J B Pardiwala, Manoj Misra, Ujjal Bhuyan, S C Sharma and A G Masih which is deciding whether its July 25 judgment granting states the right to levy royalty on extracted minerals and tax on mineral-bearing land should operate prospectively, or retrospectively.
As states were not able to realise these levies for 35 years, since the 1989 judgment in India Cement case, the cumulative arrears on these two levies run into lakhs of crores of rupees. The Centre pleaded for prospective implementation citing huge financial impact on the economy, industries and PSUs. SG Tushar Mehta said ultimately, the burden would be passed on by industries to the people, who would bear brunt of price rise.
The Andhra Pradesh government, however, opposed the Centre’s plea and said the HC had upheld the validity of an AP legislation imposing such levies in 2005 and the SC had only stayed operation of the law, which meant it was alive even if inoperative. After the nine-judge bench ruling, the state law came into effect from the day it was enacted, and the state had a right to recover arrears, AP’s counsel said.
Ripples will be felt from nanotech to healthcare: Attorney general
Attorney general R Venkataramani told a bench of CJI D Y Chandrachud and Justices Hrishikesh Roy, A S Oka, B V Nagarathna, J B Pardiwala, Manoj Misra, Ujjal Bhuyan, S C Sharma and A G Masih, “There will be multi-polar impact on the economy and industries, which is not visible to the court today. If mining sector gets impacted, ripples will be felt from nanotechnology to healthcare.” Solicitor general Tushar Mehta elaborated on the adverse impact of retrospective implementation of the constitution bench ruling to enable states to recover the arrears of royalty and tax, which had been on hold since 1989 when the SC, in a 7-1 ruling in the India Cement case, said states had no right to levy royalty on extracted minerals or tax on mineral-bearing land.
Supported by various sectors of industries represented by senior advocates Harish Salve, A M Singhvi and Arvind Datar, the SG said, “In India, 55% of the total commercial energy production is coal reliant, and 68% coal production is used in the generation of electricity. Power is not only an essential input across every other industrial sector but also meets the daily energy requirements of domestic and rural consumers.
The Centre said as per a preliminary estimate, retrospective application of the verdict would mean a cumulative burden of Rs 70,000 crore on PSUs engaged in energy production and mining.