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Issues Involved:
1. Validity of Levy of Cess Based on Royalty by States of Bihar, Orissa, and Madhya Pradesh 2. Legislative Competence and Entries in the Constitution 3. Effect of Previous Judgments on the Present Case 4. Refund of Cess Collected Summary: 1. Validity of Levy of Cess Based on Royalty by States of Bihar, Orissa, and Madhya Pradesh: The primary issue is the validity of the levy of a "cess" based on the royalty derived from mining lands by the States of Bihar, Orissa, and Madhya Pradesh. The assessees argue that the issue is governed by the decision in India Cement, which struck down a similar levy as beyond the legislative competence of the State Legislature. The States contend that their levies are different and within their legislative powers. 2. Legislative Competence and Entries in the Constitution: The relevant legislative entries are: - Union List: Entry 52 (Industries), Entry 54 (Regulation of mines and mineral development) - State List: Entry 18 (Land), Entry 23 (Regulation of mines and mineral development), Entry 45 (Land revenue), Entry 49 (Taxes on lands and buildings), Entry 50 (Taxes on mineral rights), Entry 66 (Fees in respect of any of the matters in this List) The court examined whether the cess could be considered as "land revenue" under Entry 45, a "tax on land" under Entry 49, or a "tax on mineral rights" under Entry 50. The court concluded that the cess could not be justified under these entries. The court also considered whether the cess could be treated as a fee under Entry 23, but found that the field is already covered by Central Legislation (MMRD Act, 1957) referable to Entry 54 of List I. 3. Effect of Previous Judgments on the Present Case: The court reviewed earlier cases, including Hingir Rampur, Tulloch, Murthy, and India Cement. The court found that the principles laid down in these cases, particularly India Cement, govern the present case. The court noted that Murthy was not rightly decided and upheld the view that a tax on royalties cannot be a tax on land or mineral rights. 4. Refund of Cess Collected: The court considered whether the amounts collected as cess should be refunded. The court referred to the observations in India Cement, where it was held that the cess should be declared ultra vires prospectively, and the amounts already collected should not be refunded to avoid hardship and injustice. The court applied the same principle in the present case, stating that there shall be no direction to refund the cess collected until the date on which the levy was declared unconstitutional by the respective High Courts or this judgment. The appeals were disposed of accordingly, with no order as to costs.
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