Bombay High Court
M/S. Vijay Constructions vs State Of Maharashtra And Ors on 18 July, 2017
Bench: T.V. Nalawade
WP No. 3015, 3248/2000
1
IN THE HIGH COURT AT BOMBAY
APPELLATE SIDE, BENCH AT AURANGABAD
WRIT PETITION NO. 3015 OF 2000
M/s. Vijay Constructions,
(a registered Partnership Firm),
through its General Power of
Attorney Holder/Authorised
signatory Shri. Kantilal Nayar,
Age 61 years, Occu. Business,
R/o. At/post Yedashi,
Tq. and Dist. Osmanabad. ....Petitioner.
Versus
1. The State of Maharashtra
1A. The Advocate General,
State of Maharashtra,
Office of Bombay High Court
Building, Fort,
Mumbai - 400 032.
2. The Ministry of Revenue,
through its Secretary,
Govt. of Maharashtra,
Mantralaya,
Mumbai - 400 032.
3. The Additional Commissioner,
Aurangabad Division,
Aurangabad.
4. The Collector,
Collectorate Premises,
Osmanabad,
Dist. Osmanabad.
5. The Tahsildar,
Osmanabad,
Tq. and Dist. Osmanabad. ....Respondents.
Mr. R.M. Sharma, Advocate for petitioner.
Mrs. P.V. Diggikar, A.G.P. for respondent/State.
::: Uploaded on - 19/07/2017 ::: Downloaded on - 20/07/2017 00:21:51 :::
WP No. 3015, 3248/2000
2
WITH
WRIT PETITION NO. 3248 OF 2000
Shri. Sham s/o. Mangaldas Manwani,
Age 39 years, Occu. Contractorship,
R/o. Shakti Appartment, Vasmat Road,
Parbhani, Dist. Parbhani. ....Petitioner.
Versus
1. The State of Maharashtra
Through Secretary
Revenue and Forest Department,
Mantralaya, Mumbai-32.
2. The District Collector and
District Magistrate, Hingoli,
Dist. Hingoli.
3. The Tahasildar,
Aundha Nagnath,
Tq. Aundha Nagnath,
Dist. Hingoli. ....Respondents.
Mr. J.N. Singh, Advocate for petitioner.
Mrs. P.V. Diggikar, A.G.P. for respondent/State.
CORAM : T.V. NALAWADE AND
SANGITRAO S. PATIL, JJ.
RESERVED ON : 19/06/2017.
DECIDED ON : 18/07/2017.
JUDGMENT :
. In both the proceedings, the power of State
Government to collect royalty in respect of minor minerals and
also the power to impose penalty on the persons who have
committed default in making the payment of royalty is
challenged. In brief, it is the contention of the petitioners that in
view of the provisions of Mines and Minerals (Development and
WP No. 3015, 3248/2000
Regulation) Act, 1957 (hereinafter referred to as 'the Act' for
short) and the Rules framed thereunder, the Maharashtra State
has no power to collect the royalty. In both the proceedings,
notices issued by the respondent, State/Government for
recovery of royalty and penalty amount are challenged and relief
of quashment of those orders made by the revenue authority
are claimed. Additional relief of setting aside of the order of
seizure of the truck for recovery of such amount made against
the petitioner of the first proceeding is also claimed. Both the
sides are heard.
2) The petitioner from Writ Petition No. 3015/2000 is
having stone crusher and it collects mining material for this
stone crusher from various persons. It is the case of petitioner
that it pays royalty on such minor minerals. This petitioner has
no land or quarry and so, the petitioner purchases and collects
minor minerals from others.
3) It is the case of petitioner from Writ Petition No.
3015/2000 that it is in construction business also and it
undertakes the construction of Government projects etc. It is
contended that under the Government policy and the contract,
WP No. 3015, 3248/2000
the petitioner is entitled to get refund of the royalty amount and
this circumstance also needs to be considered in his favour.
4) In August 1994, the Officers of revenue authority
visited the site where the stone crusher of the petitioner from
Writ Petition No. 3015/2000 is functioning. The Officers noticed
that there was unaccounted minor mineral at this site and even
in the account of stone crusher, there was much quantity of
minor minerals in respect of which royalty was not paid. Show
cause notice was then issued in September 1995 and the
petitioner was asked as to why the royalty amount of
Rs.45,150/- and penalty of Rs.8,19,956/- should not be
recovered from the petitioner. As no show cause was shown,
recovery order was made. Then the petitioner filed review
application. After considering the contentions of the petitioner
and the record of royalty receipts, review application was
decided on 16.3.1996 and the amount of royalty was reduced to
Rs.37,100/- and the amount of penalty was also reduced to
Rs.7,10,862/-. This order made by the Collector, revenue
authority was challenged by filing appeal before the Divisional
Commissioner by the petitioner under the provisions of the
Maharashtra Land Revenue Code, 1966 (hereinafter referred to
WP No. 3015, 3248/2000
as 'the Code' for short). The appeal came to be dismissed. It is
the contention of the petitioner from this petition that the
decision is now challenged before the Government, before the
Hon'ble Minister and the said proceeding is still pending. It is
also the contention of the petitioner that even when the Minister
has granted stay to the recovery of amount, coercive action is
being taken for the recovery of amount and so, the petitioner is
required to file the present proceeding.
5) It appears that in Writ Petition No. 3015/2000, by
making interim order on 2.8.2000, this Court directed the
respondent to hand over the custody of the seized truck of the
petitioner, subject to condition of payment of royalty which was
due and the royalty which would become due in future. Thus,
indirectly this Court granted stay to the order of revenue
authority by which the petitioner was directed to pay the
penalty.
6) The petitioner of Writ Petition No. 3248/2000 is the
owner of the land and in that land by doing mining activity, the
petitioner is collecting the minor mineral for his stone crusher. It
is the case of the petitioner that he has been paying the royalty
WP No. 3015, 3248/2000
regularly. It is the grievance of the petitioner that the rate of the
royalty is increased illegally by the respondent/State and the
increase in rate is illegal as the rate was changed before
completion of four years from the date when the previous rate
was fixed. In this case, demand notices dated 10.11.1999,
22.2.2000, 18.3.2000 and 22.6.2000 are mentioned for
challenging them. They are in respect of different periods. The
orders of recovery of royalty amounts are not challenged by this
petitioner before the Commissioner or the Government as
provided by the Code and the petitioner has directly come to
this Court.
7) In both the proceedings, the respondent/State has
filed reply. It is contended that the orders are issued under the
provisions of the Code. It was submitted for the State that when
the orders are made by the revenue authority under the Code,
they need to be challenged by filing proper proceeding like
appeal or revision as provided under the Code and the petition is
not tenable. It was submitted for the State that factual aspects
are involved in the matters as specific quantities are mentioned
by the revenue authorities in notices and on the basis of rate
fixed of royalty, notices are issued and unless there is record
WP No. 3015, 3248/2000
with the petitioner to show that royalty is paid, the other
challenge like the challenge to power of the respondent/State is
not possible. In view of the provisions of the Code and also
Central Act, this Court holds that there is much force in the
contentions made by the respondents. Though the challenge to
the power of the State Government is available in writ petition,
for challenging the demand notices, the petitioners ought to
have approached the revenue authorities by filing appeal or
revision as provided under the Code. Though there is this
circumstance, this Court is considering that aspect also in the
present matters as the matters are pending for more than 17
years and indirectly, the petitioners are benefitted due to
pendency of the present proceedings.
8) So far as the law point raised by the petitioners with
regard to the power of the State Government to recover the
royalty is concerned, this Court has no hesitation to observe that
this point is no more res-integra. The learned counsels for the
petitioners are placing reliance on one order made by the Apex
Court by which the decision given by the Apex Court in the past
is referred to the larger bench. But there is no force on this
ground. This Court has carefully gone through the two cases of
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the Apex Court reported as (1990) 1 SCC 12 [India Cement
Ltd. and Ors. Vs. State of Tamil Nadu and Ors.] decided by
the seven Hon'ble Judges of Apex Court and the case reported
as (2004) 10 SCC 201 [State of W.B. Vs. Kesoram
Industries Ltd. and Ors.] decided by five Hon'ble Judges of
Apex Court. Careful perusal of the observations made by the
Apex Court and the law laid down in these two cases show that
the power of the State Government to make Rules for recovery
of royalty in respect of minor minerals was never under
challenge and the Apex Court has also not held that the State
Government has no such power. In the case reported as 2006
(3) Mh.L.J. 529 [Ajit Majur Kamgar Sahakari Sanstha Vs.
State of Maharashtra and Ors.], this Court has laid down that
the powers of the State Government under the Code are not
inconsistent with the provisions of the Act, Central Act
mentioned above. In the Code only the procedure is given for
the recovery of royalty. Thus, the provisions of both the Central
Act and the Code were considered by this Court in the case cited
supra.
9) This Court has gone through the provisions of the
Act and the Code. Section 15 of the Act shows the power of the
WP No. 3015, 3248/2000
State Government to recover royalty and to make Rules in this
regard. This power includes the power to enhance the
royalty/dead rent once in three years. The power is also given
for fixing fine/penalty. The provision of section 48 (7) of the
Code shows that when there is illegal mining activity, the
penalty not exceeding a sum determined at three times the
market value of the minerals can be recovered. The power to
seize and confiscate the minor minerals which are extracted
illegally is there with the State Government. Under the Code,
the Government can recover such amount as revenue amount
and for that, both the movable and immovable property can be
seized. Thus, the Code only gives the procedure for recovery of
amount and the power is given in the Act itself.
10) The learned counsels for the petitioners are placing
reliance heavily on the circumstance that in the case reported as
2011 AIR SCW 2617 [Mineral Area Development Authority
etc. Vs. Steel Authority of India and Ors.], the bench of
three Hon'ble Judges of Apex Court has referred some points to
larger bench. The bench has observed that the decision of Apex
Court given by five Hon'ble Judges in the case of State of W.B.
Vs. Kesoram Industries Ltd. and Ors. cited supra could be
WP No. 3015, 3248/2000
read as departing from the law laid down by the Hon'ble seven
Judges of the Apex Court in the case of India Cement Ltd. and
Ors. Vs. State of Tamil Nadu and Ors. cited supra. It was
submitted by the learned counsels for the petitioners that in the
present matters, in view of this circumstance present matters
cannot be decided and they need to be kept pending till the
decision of the larger bench of Hon'ble Apex Court comes out. It
was submitted that the previous bench of this Court had made
such order also. This Court expressed that there is nothing in
the order of reference to show that the present matters need to
be stayed and the point involved in the present matters is
involved in the reference matter. This Court has no hesitation to
hold that the present petitioners are intentionally trying to
mislead the Court for getting the time and to create
complications. Careful perusal of the observations made in the
aforesaid case, by which reference is made shows that the point
involved in the present matters of the power of the State
Government to recover the royalty and penalty is not at all
referred by the Apex Court to larger bench. In the two cases
already mentioned viz. State of W.B. Vs. Kesoram Industries
Ltd. and Ors. and India Cement Ltd. and Ors. Vs. State of
Tamil Nadu and Ors. Hon'ble Apex Court considered the point,
WP No. 3015, 3248/2000
"Whether 'royalty' defined under section 9/15 (3) of the Act can
be treated as tax ?" The facts in the case decided by the bench
of Hon'ble seven Judges show that 'cess' was levied on the
royalty amount by using provisions of State legislation. This cess
and also the provisions made by the State Government in the
said Act were under challenge. The seven Judges bench of
Hon'ble Apex Court held that such cess amounts to tax and the
State has no power to levy such cess on royalty amount. The
bench of five Judges of the Hon'ble Apex Court has observed
that the royalty cannot be treated as tax when the seven Judges
bench had mentioned in the decision that it is tax. The bench of
five Judges has given reasoning for making such observations.
This Court does not feel it necessary to go in to that reasoning
as the point is referred to larger bench. The right of the
Government to recover cess may be also under consideration
before the larger bench, but the right of the State Government
to recover the royalty and penalty as mentioned above will not
be under consideration before the larger bench. Thus, there are
no merits on the law point raised in the present matters and it is
clear that the petitioners have raised this point only to see that
they are not made to pay the penalty and additional amount of
royalty. When proceeding is pending in the High Court, the
WP No. 3015, 3248/2000
authorities are reluctant to take action against the persons like
petitioners and this way, the petitioners have misused the
process of law.
11) The learned counsel for petitioner in Writ Petition No.
3248/2000 argued one more point. He submitted that there are
no Rules for fixing rates of minor minerals which can be applied
to the present matter and the rates and rules which were fixed
and made for Vidharbha region are used against the present
petitioner. There is no force in this submission also. Copy of
circular dated 17.1.1994 and copies of notifications of the State
Government dated 1.6.1998, 1.2.2001 are produced. They show
that rates of royalty are revised by the State Government for
entire State. These circular and notifications are not under
challenge. It is already observed that the State Government has
such power. For this reason also, no relief can be granted to the
petitioners.
12) In Writ Petition No. 3015/2000, it was submitted
that the right of the petitioner to get refund of royalty amount in
view of the policy of the State Government in that regard in
favour of the Government contractors needs to be considered. It
WP No. 3015, 3248/2000
can be said that this again involves factual aspect and there is
virtually no record with the petitioner to show that the petitioner
is entitled to get the benefit of that scheme. Specific procedure
is provided for getting that benefit by the State Government and
copy of circular dated 21.2.1983 in that regard is produced by
the State. For getting the benefit of the scheme, application is
required to be moved by mentioning the work undertaken and
the recommendation of the Executive Engineer needs to be
annexed with the application and only after that, the matter can
be considered by the revenue authority. The notices show that
they are of different period and in respect of minerals which
were found on the site of the stone crusher and there is no
record produced to show that in the past mineral mentioned in
account was used for Government project and the mineral found
at the site was to be used for Government project. This
circumstance again shows that this petitioner has tried to create
complications by making submission which has no support of
record.
13) In both the matters, the Court cannot ignore the
point of burden of proof. When there are provisions in the
Central Act and the Code showing that particular procedure
WP No. 3015, 3248/2000
needs to be followed for extraction of minerals even by the
owner of the land, the burden is always on the persons like the
petitioners to show that they had followed that procedure and
they need to give account in respect of minor minerals used by
them and the minor mineral which was found in their custody.
The burden is on them to produce the record of payment of
royalty in respect of said minor minerals. If such record is not
there, there is presumption available against such persons that
they were involved in illegal mining activity and they have not
paid royalty on the minerals in their possession and used by
them. Thus, on facts also, there are no merits in both the
proceedings.
14) In the result, both the proceedings stand dismissed.
Each petitioner is to pay cost of Rs.25,000/- (Rupees twenty five
thousand) to the respondent/State. Interim relief, if given of any
nature, is vacated. Rule is discharged in both the cases.
[SANGITRAO S. PATIL, J.] [T.V. NALAWADE, J.]
ssc/
