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Issues Involved:
1. Constitutionality of the Orissa Cess Act, 1962. 2. Legislative competence of the Orissa Legislature. 3. Alleged colorable legislation. 4. Violation of Article 14 of the Constitution. 5. Violation of Article 19(1)(f) and Article 301 of the Constitution. 6. Impact on existing mining leases and statutory leases. 7. Nature of the levy (fee vs. tax). 8. Procedural fairness in assessment. Issue-wise Detailed Analysis: 1. Constitutionality of the Orissa Cess Act, 1962: The petitioners challenged the vires of the Orissa Cess Act, 1962, arguing that it was unconstitutional as it imposed cess on lands held for carrying on mining operations. The court analyzed the provisions of the Act, including the definitions, charging sections, and amendments, to determine its constitutionality. 2. Legislative Competence of the Orissa Legislature: The petitioners argued that the Orissa Legislature lacked legislative competence to impose cess on mining lands, as the field had been occupied by the Central Act of 1957. The court examined the legislative entries and the declaration under Section 2 of the Central Act of 1957. It concluded that the Parliament had not taken under its control the field of taxation, and the State Legislature retained the power to impose cess under Entry 49 of List II. 3. Alleged Colorable Legislation: The petitioners claimed that the Cess Act was a piece of colorable legislation, purporting to impose royalty under the guise of cess. The court referred to the principles of pith and substance and the doctrine of colorable legislation. It held that the Cess Act was a legitimate exercise of the State's taxing power and not a colorable legislation. 4. Violation of Article 14 of the Constitution: The petitioners argued that the Cess Act violated Article 14 by discriminating against lands held for mining operations. The court applied the test of reasonable classification and found that the classification of lands for different rates of cess was based on intelligible differentia and had a rational relation to the object sought to be achieved. The court upheld the Act as not violative of Article 14. 5. Violation of Article 19(1)(f) and Article 301 of the Constitution: The petitioners contended that the Act was confiscatory in nature and violated Article 19(1)(f). The court noted the lack of necessary averments and evidence to support this claim. It also held that the cess did not impede the free flow of trade and commerce under Article 301, as it did not directly and immediately restrict trade. 6. Impact on Existing Mining Leases and Statutory Leases: The petitioners argued that the impost of cess violated the terms of existing mining leases. The court held that the State Legislature had the competence to impose cess on lands held for mining operations, and the imposition of cess did not infringe on the terms of mining leases. 7. Nature of the Levy (Fee vs. Tax): The court distinguished between fee and tax, holding that the cess was a tax and not a fee. It rejected the argument that the Act initially imposed a fee and later a tax, stating that the cess was a compulsory exaction for the general revenue of the State. 8. Procedural Fairness in Assessment: The petitioners claimed that the Act denied a fair hearing during assessment. The court found that the assessment of cess was linked to the assessment of royalty, and the absence of an independent right of appeal did not prejudice the petitioners. The court noted that the Board of Revenue had revisional powers to address any grievances. Conclusion: The court dismissed the writ petitions, upholding the constitutionality and validity of the Orissa Cess Act, 1962. It held that the Act was within the legislative competence of the Orissa Legislature, did not violate Articles 14, 19(1)(f), or 301 of the Constitution, and was not a piece of colorable legislation. The court also found that the procedural provisions of the Act were fair and did not infringe on the petitioners' rights.
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