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1960 (11) TMI 115 - SC - Indian LawsWhether the levy imposed by the impugned Act amounts to a fee relatable to Entry 23 read with Entry 66 in List II? Held that - It is difficult to hold that the field covered by the declaration made by s. 2 of this Act, considered in the light of its several provisions, is the same as the field covered by the impugned Act. That being so, it cannot be said that as a result of Entry 52 read with Act LXV of 1951 the vires of the impugned Act can be successfully challenged. Our conclusion, therefore, is that the impugned Act is relatable to Entries 23 and 66 in List II of the Seventh Schedule, and its validity is not impaired or affected by Entries 52 and 54 in List I read with Act LXV of 1951 and Act LIII of 1948 respectively. In view of this conclusion it is unnecessary to consider whether the impugned Act can be justified under Entry 50 in List II, or whether it is relatable to Entry 24 in List III and as such suffexs from the vice of repugnancy with the Central Act XXXII of 1947. The result is the petition fails and is dismissed with costs.
Issues Involved:
1. Whether the levy imposed by the Orissa Mining Areas Development Fund Act, 1952, is a fee or a tax. 2. Whether the impugned Act is ultra vires the legislative competence of the Orissa Legislature. 3. Whether the impugned Act is repugnant to the provisions of existing Central laws. Issue-wise Detailed Analysis: 1. Whether the levy imposed by the Orissa Mining Areas Development Fund Act, 1952, is a fee or a tax: The petitioners argued that the cess levied under the impugned Act is not a fee but a duty of excise on coal, which is beyond the legislative competence of the Orissa Legislature. They contended that even if the levy is considered a fee, it would still be ultra vires due to its conflict with Central laws. The respondents maintained that the levy is a fee related to Entries 23 and 66 in List II of the Seventh Schedule and is valid. The Court distinguished between a tax and a fee, emphasizing that a fee is a charge for specific services rendered and involves an element of quid pro quo. The Court found that the cess collected is earmarked for the development of mining areas and does not become part of the consolidated fund, thereby establishing a correlation between the cess and the services rendered. Thus, the levy was characterized as a fee and not a tax. 2. Whether the impugned Act is ultra vires the legislative competence of the Orissa Legislature: The petitioners argued that the impugned Act is beyond the legislative competence of the Orissa Legislature as it encroaches upon the field covered by Central legislation, specifically the Mines and Minerals (Regulation and Development) Act, 1948. The Court examined the declaration in Section 2 of the 1948 Act, which stated that it is expedient in the public interest for the Central Government to regulate mines and mineral development. However, the Court noted that the declaration by the Dominion Legislature under the Government of India Act, 1935, does not equate to a declaration by Parliament under the Constitution. Therefore, the Central Act did not cover the field of the impugned Act, and the Orissa Legislature was competent to enact the law under Entry 23 in List II. 3. Whether the impugned Act is repugnant to the provisions of existing Central laws: The petitioners also contended that the impugned Act is repugnant to the provisions of the Industries (Development and Regulation) Act, 1951, which deals with the regulation and development of industries, including the coal industry. The Court applied the doctrine of pith and substance, concluding that the primary object of the impugned Act is the development of mining areas, whereas the Central Act focuses on the regulation of industries. Therefore, there was no repugnancy between the two laws. The Court also dismissed the argument that the impugned Act could be justified under Entry 50 in List II as a tax on mineral rights, noting that such taxes are different from duties of excise on minerals produced. Conclusion: The Supreme Court held that the levy imposed by the Orissa Mining Areas Development Fund Act, 1952, is a fee and not a tax. The Act is within the legislative competence of the Orissa Legislature and is not repugnant to existing Central laws. Consequently, the writ petition was dismissed with costs.
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