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TMI Blog1964 (2) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire sum demanded. The appellant's father obtained a mining lease from the Government of Madras dated September 15, 1953 under which he was permitted to work and win iron ore in a tract of land in a village in Chittoor district. The terms upon which the lessee was to work the mines are not very relevant but what is material is that under this instrument the lessee bound himself to pay a dead rent of ₹ 1,140/2 per year if he used the leased land for the extraction of iron ore and a higher amount if used for other purposes. Besides, he also bound himself to pay a royalty of 8 annas per ton of iron ore if the ore were used for extraction of iron and if the iron ore was used for any other purpose such as for sale in specie, at Re. 1 /- per ton. In addition, the lease also stipulated for the payment of surface rent at ₹ 1-8-3 per acre per annum in respect of the surface area occupied or used. The lessee worked the mines, extracted ore and marketed it. To raise finances for carrying on the local administration in the District Boards, several taxes are leviable. Among them section 78 of the Act imposes a land-cess on lands in the district in these terms : 78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racticable in any particular case, according to any method which the Board of Revenue may approve for that case : Provided that, where any landholder or sub- landholder has obtained under the provisions of sections 30(iii) and 33 of the Madras Estates Land Act, 1908, a decree empowering him to increase his rent in consequence of any additional payment by way of water-rate made by him to Government, the annual rent value shall be the balance remaining after deducting such increase of rent up to the amount of the waterrate from the sum ascertained as aforesaid. When the State of Andhra was separated from Madras in October, 1953 the district of Chittoor became part of the State of Andhra. In 1955 a demand was made upon the father of the appellant for the payment of land cess calculated in accordance with the provisions of ss. 76 and 79 of the Act and including in the computation of the annual rent value . the amounts payable to Government in each year under the mining lease both as surface rent and royalty. The validity of this notice was objected to on grounds which are no longer material and the objections being upheld. the notices were quashed on writ petitions filed to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Development) Act, 1948 (Central Act Llll of 1948) or in any event, by the Mines Minerals (Regulation Development) Act, 1957 (Central Act LXVII of 1957). so that after the date when these Central enactments came into force the land cess that could be levied under s. 78 must be exclusive of royalty under a mining lease. (3) Is the land cess which, was demanded by the impugned notices dated March 10, 1958 and August 29, 1960 recoverable as an arrear of land revenue under the law? We shall examine these submissions in that order. The first contention that the expression 'royalty' under s. 79(1) does not signify royalty as commonly understood but is confined to the rent payable for the beneficial use of the surface of the land, scarcely deserves serious consideration. Where the land is held on lease, as in the present case, the lease amount is specifically referred to in s. 79 of the Act as one of the components for the computation of the annual rent value. It is therefore. obvious that royalty which follows the expression lease amount is something other than the return to the lessor or licenser for, the use of the land surface and represents as it normally co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucation of the labour force to attract workmen to these ,mining areas'. The cess which was there impugned was levied and collected for meeting the cost of this development of the mining areas . An examination of the Central enactment which was also passed to provide for the conservation of minerals was held to cover the same field as the Orissa Act. The Orissa State enactment had been passed in pursuance of the legislative power conferred by Entry 23 of the State List in the 7th Schedule reading : Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union. The provision in List I referred to here is Entry 54 in the Union List reading : Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by law made by Parliament to be expedient in public interest. It was argued on behalf of the State that the Central Act of 1948 though it contained a declaration that the Regulation and Development of mines and mineral development was expedient in the public interest, still such a declaration was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there is no connection between the regulation and development of mines and minerals dealt with in the Central Acts and the levy and collection of land-cess for which provision is made by ss. 78 and 79 of the Act. There is therefore no scope, at all, for the argument that there is anything in common between the Act and the Central Acts of 1948 and 1957 so as to require any detailed examination of these enactments for discovering whether there is any over-lapping. It was next urged that the land-cess was really a tax on mineral rights falling within Entry 50 of the State List reading Taxes on mineral rights subject to any limitation imposed by Parliament by law relating to mineral development and that the Central Acts under which also taxes and fees might be levied brought into play the last portion of this Entry and that as a result the power to impose this tax was not available after the Central Acts of 1948 and 1957 came into force. In this connection Mr. Ram Reddy pointed out that as the impugned land-cess was payable only in the event of the mining lessee winning the mineral and so paying the royalty and not when no minerals were extracted, it was in effect a tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold interests, treated as the statutory annual rent value . It is therefore not possible to accept the contention, that the fact that the lessee or licensee pays a royalty on the mineral won, which is in excess of what he would pay if his right over the land extended only to the mere use of the surface land, places it in a category different from other types where the lessee uses the surface of the land alone. In each case the rent which a lessee or licensee actually pays for the land being the test, it is manifest that the land-cess is nothing else except a land tax. Learned counsel pointed out that in the case of inam lands and other lands dealt with in cls. (ii), (iii) and (iv) of s. 79 the royalty payable by the lessee or licensee did not figure in the computation of the annual rent value. That, however, appears to us to be wholly irrelevant, for what we are concerned with is whether on the terms of sub- cl. (i) the land cess is not in truth a tax on land. The last of the points raised relates to the threat on the part of the Government to recover the impugned demands as an arrears of land revenue. Learned counsel pointed out that s. 221 of the Act which made provision for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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