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TMI Blog1965 (4) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... by using sand, clay etc. which constituted minor minerals, for which no permit or mining lease had been obtained, nor any royalty had been paid to Government. The Block Development Officer also gave a notice to each of them asking them to take permit for digging earth and taking sand for manufacture of bricks and to produce accounts in respect of such manufacture. 2. The petitioners challenged all these notices, mainly on the ground that what were being used by them for manufacture of bricks were not minor minerals, and, therefore, the Bihar Minor Mineral Concession Rules, 1964, were not applicable to them and that secondly, the Bihar State Government have no authority in law to impose any royally in respect of minor minerals and, in any case, the Assistant Mining Officer was not authorised under the Act or Rules, to assess or called royally from the petitioners. 3. Article 366 of the Constitution of India defines taxation as follows:-- 28. 'taxation' includes the imposition of any tax or impost, whether general or local or special, and 'tax shall be construed accordingly. Such was the definition in item No. 17 of Section 311(2) of the Government of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd a fee and both are different forms, in which the taxing power of a State manifests itself. The Constitution of India has made a distinction between a tax and a fee for legislative purposes and there are various entries in the three lists in Schedule VII about different forms of taxation, while there is an entry at the end of each of the lists about imposition of lees. In the above case, their Lordships of the Supreme Court, while considering the nature of the annual contribution payable by every Math or temple, under the Orissa Hindu Religions Endowments Act (Act IV of 1939, observed: But the essential thing in a tax is that the imposition is made for public purpose to meet the general expenses of the State without reference to any special benefit to he conferred upon the payers of the tax. The taxes collected are all merged in the general revenue of the State to be applied for general public purposes. Thus, tax is a common burden and the only return which the tax payer gets is the participation in the common benefits of the State. Fees, on the other hand, are payments primarily in the public interest but for some special service rendered or some special work done for the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Government, to impose and demand royalty for mines and minerals. Learned Counsel's contention was that it was not there. He referred to item 51 of the Union List in the Seventh Schedule: Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the Public interest. The corresponding item in List 11--State List, is item 23. 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 area of legislative operation has been kept separate and distinct. Anything, beyond what is declared by Parliament to be expedient in the public interest to be kept under the control of the Union, will be under the legislative ambit of the State in regard to mines and mineral development in the State. The Mines and Minerals (Regulation and Development) Act, 1957 (Act 67 of 1967) is an enactment of the Parliament for the regulation of mines and the development of minerals under the control of the Union. In the definition in Section 3(a) minerals include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th minor minerals. Having given this power to the State Government, the Parliament had to exclude, in Section 14, the operation of the provisions under Sections 4 to 18, in respect of minor minerals, as otherwise, there would have been conflict and overlapping. The Bihar Minor Mineral Concession Rules, 1964. were made under Section 1ft and they came into force from the 18th April 1964. Before that rules for regulating the licences and leases in respect of minor minerals and other connected purposes, were in force in the State of Bihar, to which I shall refer later and those rules were operative till the 18th of April, 1964, under Sub-section (2) of Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957 (to be referred hereafter as the Act). I should here refer to item 50 in the State List in the Seventh Schedule which is as follows:-- Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development . The rates of royalty mentioned in the Bihar Minor Mineral Concession Rules 1964 (to be referred hereafter as the Rules) have not been prescribed by the State Legislature. In view of the limitations imposed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any levy in that respect. It is difficult to concede to this argument. Conditions of rent and royally are integral parts of a lease, and they would necessarily come within the ambit of the powers given to make rules under Subsection (1). Besides, the last clause in this sub-section and for purposes connected therewith will also necessarily include the imposition of a condition for payment of royally. That is a purpose connected with the grant of the mining lease. I do not find any item in the Union List in the Seventh Schedule corresponding to item 50 of the State List. If imposition of royalty shall be taken, as contended for the petitioners, as a matter outside the regulation of mines and mineral development, Section 9 of the Act will be outside the legislative competency of the Parliament. A reference, in this connection, to the Mineral Concession Rules. 1949, which were made under Section 5 of the Mines and Minerals (Regulation and Development) Act, 1948, will be helpful. That Act, in Section 5(1) authorised the Central Government to make rules for regulating the grant of mining leases.. ... .. .. . .in respect of any mineral. Sub-section (2) of that section gave four parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibe rules for regulating the extraction of minor minerals (vide Section 8--The Mines and Minerals (Regulations and Development) Act 1948, Rule 1. Mineral Concession Rules 1949]. Royalty was being collected for minor minerals also. So was the position before the Constitution came in 1950. In that context, if the Act of 1957 did not specifically express anywhere the intention to abolish imposition of royally in respect of minor minerals, it has to be taken that the Parliament look appraisal of the existing law and usage and delegated all powers in that connection to the State Government in respect of minor minerals under Section 15. If the Parliament would have wanted really to exclude minor minerals from payment of royally, it would have so expressed in Section 9 which specifically provides for payment of royalties on all minerals. The exclusion of Sections 4 to 13 as mentioned in Section 14, in respect of minor minerals, appears to be for the sole purpose of conferring all such powers, as covered by those sections, on the State Government, in respect of minor minerals. I am, therefore, of the view that imposition of royally is within the powers given to the State Government to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... China clay, coal and ironstone, granite, state, stone etc. In several decisions referred to in that dictionary, in that connection, brick-clay has been held to be n mineral. The definition of 'minor minerals' as given in the Act is artificial. It has only divided the minerals into two sections so that their development may be regulated separately by two authorities, Union and State Government. If brick-earth or brick-clay is a mineral and 1 do not find any reason why it should not be, the Parliament had legislative competency to enact about it. 10. Learned Counsel's next contention was that though 'minerals', in an abstract sense, may include brick-earth or clay, it would not be so included in the expression 'mines and minerals'. The word minerals' used in conjunction with the word 'mines' should be taken to have a limited connotation, in the sense that it will only be referable to the underground working of a mine. Any inorganic substance that does not come out of working of a mine should not he learned Counsel continued, taken as a mineral in the limited sense. He referred to item No. 54 of the Union List in the Constitution and pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the nature of the transaction to induce the Court to give it a more limited meaning. The last mentioned Lord at page 689 of the report observed: Now the word 'minerals' undoubtedly may have a wider meaning than the word 'mines'. In its widest signification it probably means every inorganic substance forming part of the crust of the earth other than the layer of soil which sustains vegetable life. In some of the reported cases it seems to be laid down, or assumed, that to be a mineral a thing must he of commercial value, or workable at a profit. But it is difficult to see why commercial value should be a test, or why that which is a mineral when commercially valuable should cease to he a mineral when it cannot be worked at a profit. Be that as it may, it has been laid down that the word 'minerals' when used in a legal document, or in an Act of Parliament, must be understood in its widest signification, unless there be something in the context or in the nature of the case to control its meaning. It has also been held that the use of the word 'mines' in conjunction with 'minerals' does not of itself limit the meaning of the latter w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Two other cases: (1872) 7 Ch. A 699 and Jersey (Earl) v. Neath Poor Law Union Guardians (1899) 22 QBD 555 have been referred, on the meaning of 'mines and minerals', in many later cases learned Counsel also referred to them before us. They do not give us more than the case of (1888) 13 AC 657 which I have discussed above, in the former case (1872) 7 Ch. A 699 china clay was held as in eluded in a reservation which spoke of 'mines and minerals', yet the surface right of the tenant was not allowed to be interfered with under the right thus reserved Similar was the position in the latter case. 12. In the case of Todd. Birieston and Co. v. North Eastern Rly. Co. (1903) 1 KB 603 which arose out of arbitration between the two parties, all the land, the subject of arbitration, contained, immediately under the surface or vegetable soil, an extensive bed of clay or common brick earth which extended to a considerable depth. Clay of the same character existed immediately under the surface over a large area of land in the district. The clay was worked by open work and not by mining. The North Eastern Railway Company required the land for the purpose of widening their ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icular statute. That does not destroy the generic meaning of 'minerals' which will include an inorganic, substance, such as, brick-earth or clay. 13. Another line of cases was also referred by learned Counsel, in which the discussion is whether a substance that may be got for manufacturing or mercantile purposes, if not worked for commercial profit, will be called a mineral. Some of the cases took the view that abstractly speaking, a substance will come within the species of minerals but if not worked for profit or for manufacturing purposes, it will net be included in the category of minerals as used in any deed or statute. But the later view has settled the point, saying that neither of those two elements will be relevant. In the instant case that point has no bearing and it is not necessary to discuss those cases. 14. Learned Counsel pleaded that 'minerals' should be understood in the sense in which it is generally taken in common parlance In the commercial world and by the public. If this loose meaning is accepted, then there will be many inorganic substances, such as, morrum, sand, chalk, pebbles which are not ordinarily described by the common man as a m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... freestone rock. The House of Lords held whether a substance is a mineral within the meaning of those sections of the Act was a question of fact. They observed that freestone rock was a substance of exceptional character and recognised in the mining and commercial world and by railway companies and by all proprietors hi and through whose land railway line was constructed. This observation, however, had no material bearing upon the basis of that decision. 16. Another case relied upon by learned Counsel was (1862) 142 ER 956. The Inclosure Commission was prohibited from acquiring the land at the instance of one Mr. Church who claimed that his assent should have been taken inasmuch as he had a right to work brick-earth in the land in question. The reservation included the expression mines, mineral stone and other substrata Brick-earth was held as not included in that reservation obviously for the reason that it lay on. the surface and in the subsoil. The prohibition against the Inclosure Commission was, therefore, finally upheld. 17. If I can say so with respect, none of the above cases, on which learned Counsel greatly stressed, afford any assistance to us in the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oners before the Assistant Mining Officer by a certain date mentioned therein. None of the petitioners availed themselves of that. Thus, I do not find any substance in the contention raised on behalf of the petitioners. 19. The impugned notices asked for payment of royalty for the period from 1958 to 1964. The Rules came into effect from the 18th of April, 1964. Prior to that, no rate of royalty had been prescribed for the brick-earth in any of the rules that held the field like the Mining Concessions (Bihar) Rules 1945. Rule 20 of the 1964 Rules provided that when a lease is granted or renewed royalty shall be charged at the rates specified in Schedule 2. None of the petitioners took any lease. Their use of brick earth was not under any lease. Rule 37 provides penalty for unauthorised extraction and removal of minor minerals, and according to that, notices were given to the petitioners as to why they should not be prosecuted. The rates of royalty given in Schedule 2 cannot have any retrospective application, nor can they be enforced against a person, even after the rules came into force, who did not take a mining lease under the rules. A new rule has now been made for imposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uarry permits in reserved and protected forest area are dealt with under rule 28 with which we are not concerned. The difference between a mining lease and a quarry permit is obvious. Rule 27 lays down that every quarrying permit granted under Rule 25 shall contain a condition that the depth of the pit below the surface shall not ordinarily exceed ten feel. and that for digging pits beyond ten feet, the permit-holder shall obtain the approval of the Competent Officer. A quarry permit, it appears to me, can be in relation to any land which may or may not conic under the definition of 'quarry'. The words any specified land in Rule 25 are with reference to the description of the land which the permit-holder is required to state in his application. I cannot find any justification to challenge the notices calling upon the petitioners to lake quarry permit for extracting brick-earth from the lands which may not have been declared and set apart by the Government as a quarry. 21. The result is that in all these applications, the notices issued by the Assistant Mining Officer calling upon the petitioners to pay royalty for the period 1958 to 1964, on account of brick-earth at t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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