1972 (3) TMI 104 - HC - Indian Laws

Summary

Issues Involved:
1. Legislative competence of the State Legislature to impose the impugned levy post the enactment of the Mines and Minerals (Regulation and Development) Act, 1957.
2. Scope of Sections 143 and 144 of the Mysore Village Panchayats and Local Boards Act, 1959.
3. Nature of the levy as a tax and the competence of the Taluk Development Board to impose it.

Issue-wise Detailed Analysis:

1. Legislative competence of the State Legislature to impose the impugned levy post the enactment of the Mines and Minerals (Regulation and Development) Act, 1957:

The petitioners argued that the State Legislature could not make a law authorizing the imposition of the impugned levy after the Central Act came into force. The Court examined the relevant constitutional entries and provisions of the Central Act, noting that the State Legislature's powers under Entry 23 and Entry 50 of List II are subject to the limitations imposed by Parliament under Entry 54 of List I. The Central Act, through its declaration in Section 2 and various provisions, indicated that Parliament had assumed legislative control over the regulation and development of mines and minerals, thereby curtailing the State Legislature's powers in this domain. The Court referred to Supreme Court precedents, including Hingir Rampur Coal Co. Ltd. v. State of Orissa and State of Orissa v. M. A. Tulloch & Co., which established that the State Legislature's jurisdiction is excluded to the extent covered by the Central Act. The Court concluded that the State Legislature lost its legislative power under Entries 23 and 50 of List II to the extent indicated in the Central Act, rendering the impugned levy unauthorized.

2. Scope of Sections 143 and 144 of the Mysore Village Panchayats and Local Boards Act, 1959:

The petitioners contended that the notification levying the licence fee on their mining activities was outside the scope of Sections 143 and 144 of the State Act. Section 143 authorizes the Taluk Board to regulate certain trades specified in Schedule II, which did not specifically include mining of manganese or iron ore. The Court noted that the relevant part of Schedule II referred to trades likely to be dangerous to human life, health, or property, or likely to create a nuisance. However, mining was not explicitly mentioned. The Court observed that the notification issued by the Taluk Development Board under Sections 143 and 144, which purported to levy a licence fee on mining, was not supported by the specific provisions of the State Act. Consequently, the notification was beyond the scope of the authority granted by Sections 143 and 144.

3. Nature of the levy as a tax and the competence of the Taluk Development Board to impose it:

The petitioners argued that the licence fee was, in essence, a tax, and Sections 143 and 144 of the State Act did not confer the power to levy a tax. The respondents conceded that the levy was in the nature of a tax and sought to justify it under the provisions of the State Act. The Court examined the distinction between a fee and a tax, noting that a fee is typically associated with a service rendered, whereas a tax is a compulsory exaction of money without a direct quid pro quo. The Court found that the impugned levy was intended as a tax rather than a fee, and the State Act did not specifically authorize the Taluk Development Board to impose such a tax on mining activities. The Court also referred to Chapter IX of the State Act, which exclusively provided for the levy of taxes, and concluded that the impugned levy was not authorized under the relevant statutory framework.

Conclusion:

The Court quashed the impugned notification to the extent it levied a tax on the mining of manganese and iron ore carried on by the petitioners. The respondents were directed not to enforce the levy against the petitioners, and any amounts already paid by the petitioners within three years up to the date of the writ petitions were ordered to be refunded. The petitions were allowed with costs, and an advocate's fee was set at Rs. 250/- for one set.