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Issues Involved:
1. Retrospective nature of Rule 34 of the Mineral Conservation and Development Rules, 1988. 2. Clarificatory nature of Rule 34 and its obligations on earlier leases. 3. Entitlement of the assessee to claim deduction of 'pit filling expenses' based on Rule 34. Issue-wise Detailed Analysis: 1. Retrospective Nature of Rule 34: The court examined whether Rule 34 of the Mineral Conservation and Development Rules, 1988, is retrospective in nature and applicable to agreements entered into by mining operators with the State Government before the rule's incorporation. The court noted that the lease agreement under clause 12 of Part VII binds the lessee to rules issued from time to time by the Government of India under section 18 of the Mines and Minerals (Regulation and Development) Act, 1957. This clause effectively integrates new rules into the contract, making them applicable regardless of whether they are retrospective or prospective. The court concluded that Rule 34, which mandates phased restoration, reclamation, and rehabilitation of lands affected by mining operations, must be fulfilled before the conclusion of mining operations, thus having a retrospective effect on existing contracts. 2. Clarificatory Nature of Rule 34: The court addressed whether Rule 34 is clarificatory and imposes no obligations on leases granted before its incorporation. The Tribunal had previously held that Rule 34 did not impose any statutory obligations on earlier leases. However, the court clarified that Rule 34 explicitly requires lessees to undertake phased restoration, reclamation, and rehabilitation within the stipulated time. The court emphasized that the rule's purpose is to ensure ecological balance and development, which would be defeated if it were interpreted narrowly. Therefore, Rule 34 does impose obligations on earlier leases, and the lessee must comply with these requirements. 3. Entitlement to Claim Deduction of 'Pit Filling Expenses': The court examined whether the assessee was entitled to claim deductions for 'pit filling expenses' based on Rule 34. The Tribunal had dismissed the assessee's claim, stating that Rule 34 was not retrospective and did not apply to earlier assessment periods. However, the court disagreed, stating that Rule 34's obligations must be fulfilled before the conclusion of mining operations, regardless of when the lease was granted. The court highlighted that the rule's intent is to ensure land reclamation and rehabilitation, which is crucial for maintaining ecological balance. Consequently, the court held that the assessee is entitled to claim deductions for 'pit filling expenses' as per Rule 34. Conclusion: The court concluded that Rule 34 of the Mineral Conservation and Development Rules, 1988, has a retrospective effect and imposes obligations on earlier leases. The assessee is entitled to claim deductions for 'pit filling expenses' based on Rule 34. The court directed the Tribunal to refer the matter back to the original assessing authority to determine the extent of deductions and their applicability based on the court's interpretation. The reference was answered in favor of the assessee.
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