Karnataka High Court
Sri Sai Keshava Enterprises vs The State Of Karnataka on 7 January, 2021
Author: Chief Justice Shetty
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF JANUARY, 2021
PRESENT
THE HON'BLE MR.ABHAY S. OKA, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE S. VISHWAJITH SHETTY
WRIT PETITION NO.8851 OF 2020 (GM-MM-S)
C/W
WRIT PETITION NO.9103 OF 2020 (GM-MM-S)
IN W.P. NO. 8851 OF 2020
BETWEEN
1. SRI SAI KESHAVA ENTERPRISES
SF NO.110/3B1, 110/4,5,6,7
MARUDHANAPALLI VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR RAMAIAH CHANNAKESHAVA
2. THIRUMALA BLUE METALS
SF NO.94/1D,1E,1H,1I,1J,1L,IN,2C,
BUKKASAGARAM VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR BUKKASAGARAM VENKATASWAMY RANGAPPA
3. SRI LAKSHMI VENKATESHWARA BLUE METAL
SF NO.87/1, B S THIMMASANDRAM VILLAGE,
SHOOLAGIRI TALUK, KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR ARMUGAM KUMAR
-2-
4. SRI MALLESHWARAM BLUE METALS
SF NO.714/2-A, ALUR VILLAGE,
HOSUR TALUK,
KRISHNAGIRI DISTRICT, TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR KRISHNAPPA SRINIVASAN
5. STONEMARK ENGINEERING PRIVATE LIMITED
SF NO.68/1,3A,3B,3C ADUVANAPALLE VILLAGE,
HOSUR VILLAGE,
KRISHNAGIRI DISTRICT, TAMIL NADU-635001
REPRESENTED BY ITS DIRECTOR,
MR NARAYANASWAMY SIVAKUMAR
6. AB ROCK PRODUCTS
SF NO.775,
KAMANDHODDI VILLAGE, SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT, TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR RATHINAM BAKYAKUMAR
7. SRI LAKSHMI VENKATESHWARA BLUE METAL UNIT-1
SF NO 97/2 AND 98/1A2;BS THIMMASANDRAM VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT, TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR BOLLAPPA RADHAKRISHNA
8. SHRI CHENNAI MINES
SF NO.213/1, ALUR VILLAGE, HOSUR TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
P SUBRAMANI
9. KMP BLUE METALS
SF NO.255, PT, CHENNAPALLI VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR MUGESAN SENTHIKUMAR
10 . ANAND GRANITE WORKS (BLUE METALS)
SF NO.733/2, 735/6 AND 733/1,
PANCHAKSHIPURAM VILLAGE,HOSUR TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
-3-
REPRESENTED BY ITS PARTNER
MR BIDAPPA GOWDAPPA
11 . SAKTHI BLUE METALS
SF NO.155/4A, 155/5 AND 155/3E,
BUKKASAGARAM VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
12 . V V GRANITE (STONE CRUSHER UNIT-1)
SF NO.714/1, 2; 717, 719, 720 PT, 728 PT,
ACHETI PALLI, MATHIGIRI VILLAGE
HOSUR TALUK
KRISHNAGIRI DISTRICT
REPRESENTED BY ITS PARTNER
MR GUNDUR RAMASWAMY ANANDBABU
13 . INRA BLUE METAL
SF NO.124/3, 125/2 (PART)
VENKATESAPURAM VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR GURUSAMY ELANGO
14 . SRI SANJEEVANI BLUE METALS
SF NO.280/2A, 278/2C, 279/1B,
PEDDA MADAGONDAPALLI VILLAGE,
DENKANIKOTTAI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR CHANDRAPPA SRINIVASA MOORTHY
15 . S A B M BLUE METALS
SF NO.215/1A1B, ALUR VILLAGE,
HOSUR TALUK, KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR MARAPPA LOKESHKUMAR
16 . SSV BLUE METALS
SF NO.359, 367/1-A, 367/1-B, MUGALUR VILLAGE,
HOSUR TALUK,
-4-
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR MUTHAPPA SARVESH
17 . R K BLUE METALS
SF NO.49/6PT, 7PT,
VENKATESAPURAM VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR DUDDUKURI RAVIKUMAR
18 . SARVAH INFRA PVT LTD
SF NO.70/1E, MIDITHEPALLI VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR DUDDUKURI RAVIKUMAR
19 . P VENKATA REDDY ROUGH STONE QUARY
SF NO.457 (PART-2) HOSAPURAM VILLAGE,
DENKANI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR P NAGARAJ REDDY
20 . A V S TECH BUILDING SOLUTIONS
SF NO.317, PART, 318/2, AND 319/1,
DRRAVENDIRAM VILLAGE,
DENKANI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR S SRINIVASAN
21 . A V S TECH BUILDING SOLUTIONS INDIA PVT LTD
SF NO.661/2, 661/1, 661/1A,1C AND 2A1,
THORAPALLIAGRAHARAM VILLAGE,
HOSUR TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER MR S SRINIVASAN
-5-
22 . BHARAT BLUE METALS
SF NO.216/1 AND 2, BUKKASAGARAM VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR B T NAGARAJ REDDY
23 . S V BLUE METALS
SF NO.268/4, 5B, 6 AND 7,
VENKATESAPURAM VILLAGE, HOSUR TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR NAGARAJA REDDY
24 . SREE LAKSHMI BLUE METALS
SF NO.38/4C, 41/1B, SUBBAGIRI VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR P VENKATA REDDY
25 . FINE SANDS LLP
SF NO.99/2A, 99/2B, 99/2C, 99/2D,
VENKATESAPURAM VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR B SRINIVASA REDDY
26 . SRI PARVATHAMMA GRANITES
SF NO.185/1, 185/3, JAGIRKARUPALLI VILLAGE,
DENKANKOTTAI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR C VENKATADRI
27 . TEJA BLUE METALS
SF NO.1/3B AND 8/B,
DORIPALLI VILLAGE,
SHOOLAGIRI TALUK, KRISHNAGIRI DISTRICT
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR K VENKATESH MOORTHY
-6-
28 . SRI THIRUMALAIVASAN BLUE METALS
SF NO.49/6 AND 7 (PART)
VENKATESAPURAM VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR V KAVIYARASU
29 . ASWINI BLUE METALS
SF NO.641, 642/2A AND 644/1,
GOBANAPALLI VILLAGE,
HOSUR TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR N R PRAMODE REDDY
30 . ANGALAPARAMESWARI BLUE METAL
SF NO.1236/2, KAMANDHODDI VILLAGE,
HOSUR TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR ABDUL AZEEZ
31 . SOORYA BLUE METALS
SF NO.232/4, SANAMAVU,
RAYAKOTTAI, HOSUR,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR S R SAMPANGI
32 . ARADHANA GRANITE WORKS CRUSHER UNIT
SF NO.271/1A AND 1B,
VENKATESAPURAM VILLAGE,
HOSUR TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR M GOPALAPPA
33 . SRI BALAJI BLUE METALS
SF NO.216/1A, ALUR VILLAGE,
HOSUR TALUK,
KRISHNAGIRI DISTRICT,
-7-
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR R R ANAND REDDY
34 . MAHALAKSHMI BLUE METALS UNIT II
SF NO.892/1, 892/2A, 900/1,
KAMANDHODDI VILLAGE,
SHOOLAGIRI TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS OWNER
MR MADHU SRINIVASAN
35 . SEVEN HILLS BLUE METALS
SF NO.257,
MUGALUR VILLAGE, HOSUR TALUK,
KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER,
MR C VENKATADRI
36. ELUMALAI SRINIVASA BLUE METALS
SF NO.128/1,
5 AND 2B(PT) KAMANDODDI VILLAGE,
SHOOLAGIRI TALUK, KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY ITS PARTNER
MR M BHARANITHARAN
37 . SRI MAHALAKSHMI BLUE METAL UNIT -1
SF NO.306, 309/1,2,3,310,312 BERIKAI VILLAGE,
HOSUR TALUK, KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY IT'S OWNER
MR SRINIVASAN NARAYANAN
38 . GPT BLUE METALS
SF NO.270/1,2,3,4, THUPPUGANAPALLI VILLAGE,
SHOOLAGIRI TALUK, KRISHNAGIRI DISTRICT,
TAMIL NADU-635001
REPRESENTED BY IT'S OWNER
MR G PERUMAL
...PETITIONERS
(BY SHRI. ARVIND KULOOR KAMATH, SENIOR COUNSEL
FOR SHRI ANAND MUTTALLI, ADVOCATE)
-8-
AND
1. THE STATE OF KARNATAKA
REPRESENTED BY ITS CHIEF SECRETARY,
VIDHANA SOUDHA,
DR B R AMBEDKAR VEEDHI,
BENGALURU-560001
2. DEPARTMENT OF COMMERCE
AND INDUSTRIES (MINES)
REPRESENTED BY ITS SECRETARY,
VIKASA SOUDHA,
GOVERNMENT OF KARNATAKA,
DR B R AMBEDKAR VEEDHI,
BENGALURU-560001
3. DEPARTMENT OF MINES AND GEOLOGY
REPRESENTED BY ITS DIRECTOR,
KHANIJA BHAVAN,
RACE COURSE ROAD,
BENGALURU-560001
...RESPONDENTS
(BY SHRI PRABHULING K. NAVADGI, ADVOCATE GENERAL
ALONG WITH SHRI VIKRAM HUILGOL, HIGH COURT
GOVERNMENT PLEADER)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA, PRAYING TO STRIKE DOWN
RULE 42 (7) OF THE KARNATAKA MINOR MINERAL
CONCESSION RULES 1994 INSERTED BY WAY OF AN
AMENDMENT NOTIFIED IN THE SPECIAL GAZETTE DATED
30.06.2020 BEARING REFERENCE NO.C1 115 MMN 2019
(ANNEXURE-A) AS UNCONSTITUTIONAL AND ULTRA VIRES
THE MINES AND MINERALS (REGULATION AND
DEVELOPMENT) ACT 1957 (CENTRAL ACT 67 OF 1957) BY WAY
OF WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER
APPROPRIATE WRIT, ORDER OR DIRECTION AND ETC.,
IN W.P. NO. 9103 OF 2020
BETWEEN
1. KARNATAKA TIPPER LORRY OWNERS ASSOCIATION
NMR COMPLEX
CANARA BANK BUILDING,
2ND FLOOR, ANEKAL ROAD
ATTIBELE ANEKAL TALUK
-9-
BENGALURU-562107
REPRESENTED BY ITS GENERAL SECRETARY
SRI V ANNAIAH REDDY
2. M/S V G S COMPANY
NMR COMPLEX
CANARA BANK BUILDING
2ND FLOOR ANEKAL ROAD
ATTIBELE, ANEKAL TALUK
BENGALURU-562107
REPRESENTED BY ITS PROPRIETOR
SRI R GOPAL REDDY
3. M/S S V T ENTERPRISES
NO.14, JANAPRIYA LAYOUT
2ND CROSS, BEGUR ROAD,
NEAR BOMMANAHALLI
BENGALURU-560068
REPRESENTED BY ITS PROPRIETOR
SRI A RENUKAPPA
4. M/S POOJA ENTERPRISES
NO.216, BEHIND SHAN SUNDAR BUILDING
ANEKAL ROAD ATTIBELE
BENGLAURU-562107
REPRESENTED BY ITS PROPRIETOR
SRI V ANNAIAH REDDY
5. M/S AMG BUILDERS MATERIALS SUPPLIERS
NO.7, KATHA NO.65/7
BEGUR HOBLI, SINGASANDRA
PARAPPANA AGRAHARA BENGALURU-560100
REPRESENTED BY ITS PROPRIETOR
SRI B ANTHONY
6. M/S B G R TRADERS
SY NO.182/12
BIKKANAHALLI VILLAGE
NEAR EXIDE GATE
INDUS INTERNATIONAL SCHOOL ROAD,
BILAPURA, SARJAPURA HOBLI
BENGALURU-562125
REPRESENTED BY ITS PROPRIETOR
SRI G VENKATASWAMY REDDY
7. M/S S V T ENTERPRISES
NO.15, SVT ENTERPRISES
SARJAPURA, THYAVAKANAHALLI
- 10 -
BENGALURU-562125
REPRESENTED BY ITS PROPRIETOR
SRI G LOKESHA
8. M/S S L V ENTERPRISES
NO.182/22, BIKANAHALLI
NEAR INDUS INTERNATIONAL SCHOOL ROAD
BILAPURA SARJAPURA HOBLI
BENGALURU-562125
REPRESENTED BY ITS PROPRIETOR
SRI G B HARISH.
...PETITIONERS
(BY SHRI BHAT GANAPATHY NARAYAN, ADVOCATE)
AND
1. THE STATE OF KARNATAKA
REPRESENTED BY ITS CHIEF SECRETARY
VIDHANA SOUDHA
DR B R AMBEDKAR VIDHI
BENGALURU-560001
2. THE PRINCIPAL SECRETARY
DEPARTMENT OF COMMERCE AND
INDUSTRIES (MINES)
VIKASA SOUDHA
DR B R AMBEDKAR VIDHI
BENGALURU-560001
...RESPONDENTS
(BY SHRI PRABHULING K. NAVADGI, ADVOCATE GENERAL
ALONG WITH SHRI VIKRAM HUILGOL, HIGH COURT
GOVERNMENT PLEADER)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
STRUCK-DOWN THE IMPUGNED NOTIFICATION DATED
30.06.2020 PUBLISHED IN THE GAZETTE NOTIFICATION
BEARING SL.NO.CI 115 MMN 2019, PROVISION OF RULE 42,
SUB-CLAUSE 7 OF KMMC RULES, 1994, AMENDED 2020,
ISSUED BY THE 2ND RESPONDENT AS PER ANNEXURE-L AND
ETC.,
THESE PETITIONS, HAVING BEEN HEARD AND
RESERVED, COMING ON FOR PRONOUNCEMENT OF ORDER,
THIS DAY, THE CHIEF JUSTICE MADE THE FOLLOWING:
- 11 -
ORDER
The main issue involved in these writ petitions is:
"Whether the State Legislature has legislative
competence to enact sub Rule (7) of Rule 42 of the
Karnataka Minor Mineral Concession Rules, 1994,
authorizing collection of entry fee from a person
who transports certain category of minor minerals
from other States with valid transit permit to the
State of Karnataka?"
2. The challenge in these petitions under Article 226 of the
Constitution of India is to the constitutional validity of sub-rule
(7) of Rule 42 of the Karnataka Minor Mineral Concession
Rules, 1994 (for short, 'the said Rules of 1994'). Sub-rule (7)
of Rule 42 which was incorporated by the Karnataka Minor
Mineral Concession (Amendment) Rules 2020 (for short, 'the
Amendment Rules of 2020') reads thus:
"42 (7): Transportation of processed building
stones from other States: An amount of
rupees seventy per metric ton shall be collected
from the person who transports the processed
building stone materials like aggregates or jelly,
size stone, boulders, M-sand and other varieties
from other States with valid permit."
3. The petitioners are carrying on the business of stone
crushing and manufacture of M-sand in Krishnagiri District of
the State of Tamil Nadu. The petitioners claim that they have
obtained requisite permits and approvals from the Government
of Tamil Nadu for operating manufacturing plants and have
- 12 -
been carrying on such operations for last more than ten years.
It is their case that they have obtained quarrying lease from the
Government of Tamil Nadu after participating in bidding
process. The petitioners, after obtaining transit permits, are
transporting the finished goods to other States including the
State of Karnataka.
4. The challenge to sub-rule (7) of Rule 42 is firstly on the
ground that the provisions of Section 15 of the Karnataka
Mines and Minerals (Development and Regulation) Act, 1957
(for short, 'the said Act of 1957') do not empower the State
Government to frame the Rules for imposing levy of fees for
movement of licensed goods from other States. The second
contention is that sub-rule (7) of Rule 42 (for short "the
impugned Rule") is violative of Article 301 of the Constitution of
India. It is urged that it imposes illegal restraints on the inter-
state trade. It is also contended that the exercise of power by
the State Government for framing such a Rule is not in
accordance with Article 265 of the Constitution of India.
SUBMISSIONS OF THE PETITIONERS:
5. Shri. Arvind Kuloor Kamath, the learned Senior Counsel
appearing for the petitioners submitted that the field of
transportation of minerals and the regulation of mining is
- 13 -
already occupied by the said Act of 1957 which is a law made
by the Parliament. He pointed out that under the said Act of
1957, a power has been conferred on the States to frame
Rules only in accordance with Sections 15 and 23-C thereof.
It is pointed out that the State Government has already
established various check-posts in the State right from the year
1994 for controlling unauthorized transportation and
unauthorized quarrying. The copies of the notifications for
establishing such check-posts have been placed on record. It
is submitted that the impugned sub-rule (7) of Rule 42 does not
prescribe the object and nature of the levy, and simply states
that a sum of rupees seventy per metric ton is payable by non-
State transporters. It is not described as a fee. The learned
counsel also invited our attention to the stand taken by the
State Government in its statement of objections. He submitted
that the impugned Rule is not covered by the legislative power
of the State either under Section 15 or under Section 23-C of
the said Act of 1957.
6. The learned Senior Counsel appearing for the petitioners
submitted that the power of the State Government to make a
law for the levy of fees in accordance with Entry-66 of List-II in
the seventh Schedule of the Constitution of India can be
- 14 -
exercised only to make a plenary law and not for exercising
power of delegated legislation. He pointed out that neither
Section 15 nor Section 23-C of the said Act of 1957 permit the
State Government to levy the fees for recovering the expenses
relating to setting up of infrastructure for checking illegal
transportation.
7. He submitted that going by the averments made in the
statement of objections filed by the State Government, the
impugned fees is collected for recovering the expenses
incurred for setting up infrastructure of check-posts.
Therefore, it is only a compensatory fee and not a regulatory
fee. Hence, the contention of the State Government that the
levy of such fee is a regulatory cannot be accepted and the test
of quid pro quo would apply and the burden is on the State
Government to establish that the service has been rendered to
the petitioners.
8. He further submitted that there is no correlation between
the class of persons to whom the object of the said Rule
applies and the class of persons who have to pay the fee. He
submitted that the alleged object of recovery of fee is to check
illegal transportation of minerals both from within and outside
the State. Therefore, the fees cannot be charged only from
- 15 -
those who are transporting the minerals from outside the State.
He would, therefore, submit that Article 14 of the Constitution is
violated. He also submitted that the impugned levy of fee is
violative of Article 301 of the Constitution of India. In support
of his submissions, the learned counsel relied upon the
following decisions:
i) State of Gujarat and others -vs- Jayeshbhai
Kanjibhai Kalathiya and others1
ii) Vam Organic Chemicals Ltd and another -vs-
State of U.P. and others2
iii) Sri Sri Sri K.C. Gajapati Narayan Deo and
others -vs- State of Orissa3
iv) Ashok Kumar Alias Golu -vs- Union of India
and others4
v) Welfare Association, A.R.P., Maharashtra and
another -vs- Ranjit P. Gohil and others5
SUBMISSIONS OF THE ADVOCATE GENERAL:
9. Shri. Prabhuling K. Navadgi, the learned Advocate
General opposed the petitions by making detailed submissions.
He invited the attention of the Court to the stand taken in the
statement of objections. The learned Advocate General
submitted that the said Act of 1957 has been enacted under
entry 54, List-I of seventh Schedule. In the said Act of 1957,
(2019) 16 SCC 513
(1997) 2 SCC 715
AIR 1953 SC 375
(1991) 3 SCC 498
(2003) 9 SCC 358
- 16 -
the subject of minor minerals is reserved for the State
Governments. Inviting our attention to Section 4 (1A)
incorporated in the said Act of 1957 by the Act 38 of 1999 with
effect from 18th December 1999, he urged that no person is
entitled to transport, store or cause to be transported or stored
any minerals otherwise than in accordance with the provisions
of the said Act of 1957 and the Rules made thereunder. He
pointed out that under clause (g) of sub-section (1A) of Section
15, the State Government is empowered to frame the Rules for
fixation and collection of rent, royalty, fees, dead rent, fines or
other charges. He pointed out that there is a general rule
making power vested in the State Government as
contemplated by sub-section (1A) of Section 15 as well as
clause (o) of sub-section (1A) of Section 15. He urged that
Section 23-C of the said Act of 1957 confer powers on the
State Government to make Rules for preventing illegal mining,
transportation and storage of minerals. He submitted that
regulation of mines and minerals is a field of legislation
available to the State Government. He submitted that in view
of enactment of Section 15, the whole of the field relating to
minor minerals came within the jurisdiction of the central
legislature and no scope was left for the State Governments to
make plenary legislation. He submitted that the powers under
- 17 -
Section 15 conferred on the State Governments to make Rules
relating to minor minerals is very wide.
10. The learned Advocate General also relied upon a
decision in the case of Vam Organic Chemicals (supra). He
also relied upon a decision of the Apex Court in the case of
Sandur Manganese and Iron Ores Ltd -vs- State of
Karnataka and others6.
11. He invited our attention to Section 23-C of the said Act of
1957 and submitted that the scope of Section 23-C is not
limited only to prevent illegal mining, but it also includes
prevention of illegal transportation as well as illegal storage of
the minerals. He submitted that Section 23-C empower the
State Governments to make Rules for establishing check-posts
for checking minerals under transit. Section 23-C also enables
the State Government to frame the Rules for checking and
searching of minerals during transit and to deal with the
matters which are required to be dealt with for the purpose of
prevention of illegal mining as well as transportation and
storage of minerals. He urged that in view of Section 23-C,
the jurisdiction is conferred only on the State Government to
deal with the subject of prevention of illegal mining. He
(2010) 13 SCC 1
- 18 -
submitted that illegal mining is not confined to the State of
Karnataka and therefore, it is necessary to prevent illegally
excavated minerals from being brought into the State of
Karnataka. It is the concern of the State of Karnataka to
prevent illegally excavated minerals entering into the territory of
the State of Karnataka. He pointed out that the additional
documents produced on record will show that there are several
instances of transit passes issued by the other State
Governments being tampered and there are also instances of
transport of minerals from other States without obtaining valid
permits. He pointed out that the fee specified under the
impugned sub-rule (7) of Rule 42 is for the service rendered
and it is pointed in the statement of objections as to how
amount of Rs.70/- per metric ton levied as per the impugned
sub-rule (7) of Rule 42 is being used. He submitted that
Annexure R1 to the statement of objections shows co-relation
between the fees collected and the services being rendered.
He submitted that there is every justification for setting up of
the check-posts for preventing the entry of illegally mined
minerals into the territory of the State of Karnataka and
therefore, the levy of fees is justified.
- 19 -
12. Relying upon a decision of the Apex Court in the case of
State of H.P and others -vs- Shivalik Agro Poly products
and others7, he submitted that nature and distinction between
tax and fee has reached vanishing point. He would, therefore,
urge that there is a broad co-relation established between the
fee collected and the service being rendered for the purpose of
primary object of preventing illegal mining and the element of
quid pro quo in the strict sense is not a sine qua non for levy
of a fee. He submitted that fixation of fee and collection of
fines under clause (g) of sub-section (1) of Section 15 of the
said Act of 1957 would be in furtherance of clause (g) of sub-
section (1) of Section 23-C of the said Act of 1957.
13. Referring to the arguments of the petitioners based on
the infringement of Article 301 and 304 of the Constitution, he
urged that the decision of the Apex Court in the case of State
of Gujarat (supra) will have no application, as it was a case of
total prohibition on the entry of the goods into a State. He
submitted that the levy of Rs.70/- per metric ton does not
create the trade barrier in the State.
14. He submitted that those who are quarrying minor
minerals outside the State of Karnataka are required to pay
(2004) 8 SCC 556
- 20 -
entry fee at the time of entering the territory of the State of
Karnataka. In the like manner, those who are doing quarrying
operations in the State of Karnataka are require to pay royalty
and dead rent to the State.
15. Relying upon a decision of this Court rendered in the
case of V.S. Lad and Sons vs. The State of Karnataka and
others8, he submitted that the scope of Section 23-C is laid
down in the said decision. He would, therefore, submit that
the provision of sub-rule (7) of Rule 42 is constitutionally valid
and no interference is called for.
REPLY OF THE PETITIONERS TO THE SUBMISSIONS OF
THE STATE GOVERNMENT:
16. The learned Senior Counsel briefly replied to the
submissions of the learned Advocate General. He reiterated
that the rule making power under Section 15 of the said Act of
1957 cannot be extended for regulating transportation of legally
excavated minerals in other States. Based on the decision of
the Apex Court in the case of State of Gujarat and others -
vs- Jayeshbhai Kanjibhai Kalathiya (supra), he submitted
that the State Government has no power to make a law to
regulate the lawfully excavated minerals. He urged that the
ILR 2011 KAR 1333 (WP.No.24103/2010, decided on 19.11.2010)
- 21 -
power to levy any financial imposition has to be express and
cannot be implied by drawing an inference. He submitted that
the impugned levy is a financial imposition which itself operates
as barrier for inter-state trade resulting in violation of Article
301 of the Constitution.
CONSIDERATION OF SUBMISSIONS: RULE MAKING
POWER UNDER SECTION 15 AND 23-C OF THESAID ACT
OF 1957:
17. We have given careful consideration to the submissions
made across the Bar. We have already quoted the impugned
sub-rule in paragraph 2 above. We may note here that as per
the preamble to the said Rules of 1994, the same have been
made in exercise of the powers conferred on the State under
Section 15 of the said Act of 1957. The said Act of 1957
applies to all minerals except mineral oils. Minor minerals are
defined in clause (e) of Section 3 of the said Act of 1957.
Sections 5 to 13 (both inclusive) of the said Act of 1957 are not
applicable to the minor minerals. Sub-section (1) of Section 4
of the said Act of 1957 lays down that no person should
undertake any reconnaissance, prospecting or mining
operations in any area, except in accordance with the terms
and conditions of a reconnaissance permit or a prospective
licence or, as the case may be, a mining lease granted under
- 22 -
the provisions of the said Act of 1957 and the rules made
thereunder. Under sub-section 1A of Section 4, it is provided
that no person shall store or cause to be transported or stored
any mineral otherwise than in accordance with the provisions
of the said Act of 1957 and the rules made thereunder. Under
sub-section (1) of Section 4A, the Central Government is
empowered to prematurely terminate such prospecting licence
or mining lease. Sub-Section (2) of Section 4A confers a
power on the State Government to make premature
termination of prospecting licence or mining lease in respect of
minor minerals.
18. Section 15 of the said Act of 1957 which confers powers
on the State Government of rule making in respect of the minor
minerals reads thus:
"15. Power of State Governments to make
rules in respect of minor minerals.--(1) The
State Government may, by notification in the
Official Gazette, make rules for regulating the
grant of quarry leases, mining leases or other
mineral concessions in respect of minor minerals
and for purposes connected therewith.
(1-A) In particular and without prejudice to the
generality of the foregoing power, such rules may
provide for all or any of the following matters,
namely:--
(a) the person by whom and the manner in
which, applications for quarry leases, mining
- 23 -
leases or other mineral concessions may be
made and the fees to be paid therefor;
(b) the time within which, and the form in which,
acknowledgement of the receipt of any such
applications may be sent;
(c) the matters which may be considered where
applications in respect of the same land are
received within the same day;
(d) the terms on which, and the conditions
subject to which and the authority by which
quarry leases, mining leases or other mineral
concessions may be granted or renewed;
(e) the procedure for obtaining quarry leases,
mining leases or other mineral concessions;
(f) the facilities to be afforded by holders of
quarry leases, mining leases or other mineral
concessions to persons deputed by the
Government for the purpose of undertaking
research or training in matters relating to
mining operations;
(g) the fixing and collection of rent, royalty, fees,
dead rent, fines or other charges and the time
within which and the manner in which these
shall be payable;
(h) the manner in which rights of third parties
may be protected (whether by way of
payment of compensation or otherwise) in
cases where any such party is prejudicially
affected by reason of any prospecting or
mining operations;
(i) the manner in which rehabilitation of flora and
other vegetation, such as trees, shrubs and
the like destroyed by reason of any quarrying
or mining operations shall be made in the
same area or in any other area selected by
the Stale Government (whether by way of
reimbursement of the cost of rehabilitation or
otherwise) by the person holding the
quarrying or mining lease;
- 24 -
(j) the manner in which and the conditions
subject to which, a quarry lease, mining lease
or other mineral concession may be
transferred;
(k) the construction, maintenance and use of
roads, power transmission lines, tramways,
railways, aerial ropeways, pipelines and the
making of passage for water for mining
purposes on any land comprised in a quarry
or mining lease or other mineral concession;
(l) the form of registers to be maintained under
this Act;
(m) the reports and statements to be submitted by
holders of quarry or mining leases or other
mineral concessions and the authority to
which such reports and statements shall be
submitted;
(n) the period within which and the manner in
which and the authority to which applications
for revision of any order passed by any
authority under these rules may be made, the
fees to be paid therefor, and the powers of
the revisional authority; and
(o) any other matter which is to be, or may be
prescribed.
(2) Until rules are made under sub-section (1), any
rules made by a State Government regulating the
grant of quarry leases, mining leases or other
mineral concessions in respect of minor minerals
which are in force immediately before the
commencement of this Act shall continue in force.
(3) The holder of a mining lease or any other
mineral concession granted under any rule made
under sub-section (1) shall pay royalty or dead
rent, whichever is more in respect of minor
minerals removed or consumed by him or by his
agent, manager, employee, contractor or sub-
lessee at the rate prescribed for the time being in
- 25 -
the rules framed by the State Government in
respect of minor minerals:
Provided that the State Government shall not
enhance the rate of royalty or dead rent,
whichever is more in respect of any minor mineral
for more than once during any period of three
years.
(4) Without prejudice to sub-sections (1), (2) and
sub-section (3), the State Government may, by
notification, make rules for regulating the
provisions of this Act for the following, namely--
(a) the manner in which the District Mineral
Foundation shall work for the interest and
benefit of persons and areas affected by
mining under sub-section (2) of Section 9-B;
(b) the composition and functions of the District
Mineral Foundation under sub-section (3) of
Section 9-B; and
(c) the amount of payment to be made to the
District Mineral Foundation by concession
holders of minor minerals under Section 15-A.
(underlines supplied)
19. Thus, sub-section (1) of Section 15 of the said Act of
1957 confers power on the State Government to make rules for
regulating the grant of quarrying leases, mining leases or other
minerals concession and allied purposes. Clause (g) of sub-
section (2) of Section 15 confers rules making power on the
State Government for fixing and collection of rent, royalty, fees,
dead rent, fines or other charges and the time within which and
the manner in which they shall be payable.
- 26 -
20. Sub-section (1) of Section 23-C which was incorporated
in the said Act of 1957 by the Act No. 38 of 1999 with effect
from 18th December, 1999 reads thus:
"23-C. Power of State Government to make
rules for preventing illegal mining,
transportation and storage of minerals.--(1)
The State Government may, by notification in the
Official Gazette, make rules for preventing illegal
mining, transportation and storage of minerals
and for the purposes connected therewith.
(2) In particular and without prejudice to the
generality of the foregoing power, such rules may
provide for all or any of the following matters,
namely:--
(a) establishment of check-posts for
checking of minerals under transit;
(b) establishment of weighbridges to
measure the quantity of mineral being
transported;
(c) regulation of mineral being transported
from the area granted under a
prospecting licence or a mining lease
or a quarrying licence or a permit, in
whatever name the permission to
excavate minerals, has been given;
(d) inspection, checking and search of
minerals at the place of excavation or
storage or during transit;
(e) maintenance of registers and forms for
the purposes of these rules;
(f) the period within which and the
authority to which applications for
revision of any order passed by any
authority be preferred under any rule
made under this section and the fees
to be paid therefor and powers of such
- 27 -
authority for disposing of such
applications; and
(g) any other matter which is required to
be, or may be, prescribed for the
purpose of prevention of illegal mining,
transportation and storage of
minerals".
(underlines supplied)
21. The Apex Court had an occasion to deal with the
provisions of Section 23-C of the said Act of 1957 in the case
of Gujarat and others -vs- Jayeshbhai Kanjibhai Kalathiya
(supra). The appeals before the Apex Court arose out of a
decision of the Gujarat High Court wherein the challenge was
to Rule 44-BB as inserted by the Gujarat Minor Mineral
(Amendment) Rules 2010 and Rule 71 of the Gujarat Minor
Mineral Rules, 1966. Rules 44-BB and 71 which are quoted in
paragraphs 2 and 3 of the said decision read thus:
"44-BB: No movement of sand shall be allowed
beyond the border of the State. In case any
vehicle is found transporting sand to the
neighbouring State, even with authorised royalty
pass or delivery challan, it shall be treated as
violation of the Act and the Rules made
thereunder and the penal provisions as specified
therein shall be applicable.
71. Prohibition to transport sand beyond
border.--No movement of sand shall be allowed
beyond the border of the State. In case, any
vehicle is found transporting sand to the
neighbouring State even with authorised royalty
pass or delivery challan, it shall be treated as
violation of the Act and the rules made thereunder
- 28 -
and the penal provisions, except compounding, as
specified therein shall be applicable."
The Gujarat High Court struck down the aforesaid rules
as ultra vires on the ground that the rule making power of the
State Government does not empower and cannot be stretched
to empower the State Government to make rules directly
prohibiting the movements of minerals so as to impinge upon
the freedom guaranteed by Article 301 of the Constitution.
22. As can be seen from the said two Gujarat Rules, it
appears that there was a complete prohibition imposed on
transportation of the sand from the State of Gujarat to the
neighboring States even with authorized royalty pass or
delivery challan. The said two rules prohibited the movement
of sand beyond the border of the State of Gujarat. In the
statement of object and reasons it was stated that new
provision has been made with a view to prevent illegal mining.
The Apex Court noted in paragraph 9 of the said Judgment that
the impugned rules were framed in exercise of power conferred
under Section 23-C of the said Act of 1957. Paragraphs 10
and 11 of the decision of the Apex Court are relevant which
read thus:
"10. A perusal of Sections 15 and 23-C in relation
to the aforesaid discussion would clearly suggest
- 29 -
that the power of the State Government to make
rules is restricted to:
10.1. making rules for grant of quarry leases,
mining leases or other mineral concessions in
respect of minor minerals and for the purposes
connected therewith; and
10.2. making rules for preventing illegal mining,
transportation and storage of minerals and for the
purposes connected therewith.
11. In the aforesaid context, the question arose
before the High Court as to whether in exercise of
such powers delegated by the legislature upon the
State Government, could the State Government
make a rule to the effect that the sand which is a
minor mineral would not be allowed to be taken
beyond the borders of the State of Gujarat and
making such movement as punishable offence.
According to the High Court, delegation of powers
to the State Government under the aforesaid
provisions does not include or envisage restriction
on inter-State trade, commerce and intercourse
which shall be free. Thus, the impugned rules are
held to be ultra vires the provisions of Sections 15
and 23-C of the MMDR Act. They are also held to
be violative of Article 301 of the Constitution".
23. While dealing with the submissions, the Apex Court
formulated two questions which are quoted in paragraphs 34.1
and 34.2 which read thus:
"34.1. Whether the impugned Rules framed by
the State of Gujarat as a delegate of Parliament
are beyond the powers granted to it under the
MMDR Act? In other words, whether the
impugned rules are ultra vires Sections 15, 15-A
and 23-C of the MMDR Act?
- 30 -
34.2. Whether the impugned Rules are violative
of Part XIII of the Constitution of India?
24. The Apex Court also considered its earlier Judgment in
the case of State of Tamil Nadu -vs- M.P.P. Kavery Chetty9.
In paragraph 42 while dealing with the said judgment, the Apex
Court held thus:
"42. It is in this context the words "transportation"
and "storage" in Section 23-C are to be interpreted.
Here the two words are used in the context of
"illegal mining". It is clear that it is the transportation
and storage of illegal mining and not the mining of
minor minerals like sand which is legal and backed
by duly granted licence, which can be regulated
under this provision. Therefore, no power flows
from this provision to make rule for regulating
transportation of the legally excavated minerals".
(underlines supplied)
Hence, the Apex Court held that the words
'transportation' and 'storage' used in Section 23-C of the said
Act of 1957 are in the context of illegal mining and not the
mining of minor minerals like sand which is legal and backed
by duly sanctioned licence. Hence, the Apex Court specifically
held that there is no power vesting in the State under Section
23-C of the said Act of 1957 to make a rule for regulating
transportation of lawfully excavated minerals.
(1995) 2 SCC 402
- 31 -
25. A careful perusal of the impugned sub-rule in the present
petitions shows that it deals with only transportation of
processed building stone materials from other States with a
valid permit. It provides for levy of amount of Rs.70/- per
metric ton from the person who transports processed building
stone material as mentioned in the impugned sub-rule from
other States to State of Karnataka with a valid permit. Thus,
the impugned sub-rule provides for levy of a charge at the rate
of Rs.70/- per metric ton of processed minerals transported
from other States which is legally excavated. Thus, the levy
made under the impugned sub-rule is on transport of lawfully
excavated building stone from other States to State of
Karnataka.
26. Clause (a) sub-section (2) of Section 23-C provides for
framing of Rules for establishment of check-posts for checking
of minerals under transit. As far as the regulation of transport
of minerals is concerned, the rule making power is under
clause (c) of sub-section (2) of Section 23-C. Clause (c) is
about regulation of minerals being transported from the area
granted under a prospecting licence or a mining lease or a
quarrying licence or a permit. Thus, clause (c) authorizes
framing of rules for transportation of lawfully excavated
- 32 -
minerals from the lands within the State. Obviously, clause (a)
refers to establishment of check-posts for the purposes of
checking the instances of illegal excavation and/or illegal
transportation of minerals within the State. The State
Government does not get the authority under Section 23-C of
the said Act of 1957 to make rules for the regulation of
transport of legally excavated minerals from other States.
The impugned sub-rule expressly authorizes the State
Government to collect a sort of an entry fee at the rate of
Rs.70/- per metric ton from a person who transports legally
excavated minerals from the other States.
27. In its statement of objections, firstly, the State
Government has relied upon the provisions of Section 15 for
supporting the impugned sub-rule. Clause (g) of sub-section
(2) of Section 15 confers a rule making power for making Rules
for fixing and collection of rent, royalty, fees, dead rent, fines or
other charges. Obviously, clause (g) refers to collection of
royalty, fees, dead rent, fines or other charges on the minor
minerals excavated within the State. This provision does not
confer on the State Government a rule making power to make
rules for collection of royalty, fees, dead rent, fines or other
charges on the minor minerals lawfully excavated within other
- 33 -
States. Clause (o) of sub-section (1) of Section 15 authorises
rule making in respect of a matter which is to be prescribed or
may be prescribed. Clause (f) of Section 2 of the said Act of
1957 define the word "prescribed", as prescribed by rules.
Therefore, clause (o) can be invoked for rule making when
there is a rule prescribing the subject matter on which rules can
be framed. Even sub-section (1) of Section 15 confers an
authority to make rules for regulating grant of quarrying leases,
mining leases and other mineral concessions in respect of
minor minerals and the purposes connected therewith. This
power can be exercised for dealing with mining or quarrying
inside the State of Karnataka. This provision does not
authorize the State Government to make rules concerning
minor minerals lawfully excavated in the other States. It is
pertinent to note here that provision of Section 23-C does not
apply only to minor minerals, but it applies to all categories of
minerals. Therefore, the provisions of both Section 15 and
Section 23-C do not authorize the State Government to make
rules for regulating the minerals lawfully excavated in other
States.
28. In paragraph five of the statement of objections, the
State Government has derived support from Section 23-C for
- 34 -
justifying introduction of the impugned sub-rule. The
averments made in paragraphs 6 to 9 of the statement of
objections are relevant which read thus:
"6. In Karnataka, the entire system of issue of
mineral dispatch permits to lease holders within
the State is technology based and certain
adequate safeguards are put in place to ensure
that illegal transportation of quarried material is
minimized to the maximum extent. However, it
was noticed that there was large-scale movement
of mineral from outside the State and that there is
no proper mechanism to supervise the
activity/movement, resulting in serious difficulties
in identifying illegally quarried mineral from
outside the State. The permits issued in other
States are, generally, paper-based and the
entries pertaining to the movement of the goods
are left to be filled up by the permit holder. It has
been the experience of the State that the same
permits/transmit passes would be used
repeatedly. Once the vehicle enters into the
State, there is no method to track the movement
of material or if the minor mineral is already
delivered to the consignee. Since there is no
unified mechanism and each State follows its own
method in respect of issuance of permits, it has
proved to be extremely difficult to distinguish
between legally transported material and illegally
transported material as based on the same
permits, multiple trips were being carried out.
From the transit passes produced by the
petitioners themselves as Annexures to the writ
petition, it is demonstrable that identification and
supervision of the movement of vehicles from
outside the State without the necessary protocols
is a very difficult task, which hinders the State's
efforts in prevention of illegal transport of minor
mineral and giving scope for illegal quarrying
within the State.
- 35 -
7. In this regard, it is submitted that, in order to
check the illegal transportation of Minerals from
outside the State of Karnataka into the State, and
also to verify the permits and ensure that there is
no illegal transport of minor mineral within the
State based on permits/transit passes issued
outside the State, the State is in the process of
dedicated check posts and weigh-bridges at
various locations in the State. Presently, the
Government has established one check-post in
Attibele near the Tamil Nadu-Karnataka border,
and is in the process of setting up more check-
posts and weigh bridges.
8. It is submitted that the purpose of
establishing these check posts is primarily to
ensure that only legally extracted mineral is
permitted to be brought into the State and to
ensure that the permit, once issued, should not
be prone to multiple uses. In other words, these
check-posts ensure that all the mineral that is
being transported into the State has been legally
extracted and that no illegally extracted mineral is
permitted to brought into and sold in the State.
9. It is submitted that in order to maintain these
check-posts, the State is required to incur
significant expenditure, including maintenance of
personnel and infrastructure. It is estimated for
the total cost for deployment of Squad Teams and
maintenance of check-posts in the State, an
annual expense of Rs.15,72,00,000/- is required
to be incurred by the State. It can, therefore, be
seen that the State incurs substantial expenses
for the maintenance of check-posts in order to
ensure that no illegally extracted mineral is
transported in the State. In this background, it is
submitted that the amount of Rs.70/- per metric
ton i.e., being levied under Rule 42 (7) is a
reasonable regulatory fee that is collected in
order to defray the expenses incurred for
maintenance of check-posts and to check the
transportation of illegally extracted mineral into
the State. Therefore, the fee that is levied under
the impugned rule is in the nature of a regulatory
- 36 -
fee that is collected from the transporter of the
specified mineral into the State. A copy of a
chart showing the estimate of expenses that
would be incurred by the State Government in
order to establish check posts and effectively
check the illegal transportation of minerals is
produced as Annexure R-1."
(underlines supplied)
29. It is thereafter contended by the State Government that
various decisions of the Apex Court including the decision in
the case of Vam Organic Chemicals (supra) lay down that
there is no requirement of showing quid-pro-quo or a measure
of exactitude when the State collects any amount by way of
regulatory fees. Only if such a rule making power exists, the
question of going into the nature of levy arises. We have
found that there is no such rule making power conferred on the
State Government. The real question is whether transportation
of lawfully excavated minerals in other States can be regulated
by exercising the rule making powers either under Section
23-C or Section 15. The answer to this question must be in
negative, as held by us earlier.
30. Reliance was placed on the sub-rule (1) of Rule 46 of the
said Rules 1994. Sub-Rule (1) of Rule 46 provides for an
officer empowered by the State Government by notification in
this behalf making entry and carrying out inspection. Rule 43
- 37 -
or 46 has nothing to do with the lawfully excavated minerals
which are brought from other States into the State of
Karnataka. It is contended in paragraph 9 of the statement of
objections filed by the State Government that the fee levied
under the impugned sub-rule is in the nature of a regulatory
fee. The State Government has no rule making power to make
rules providing for recovery of regulatory fee on minerals
lawfully excavated in the other States. Therefore, we need not
go into the question of the nature of fees.
ARGUMENT OF EXECUTIVE POWER:
31. Another argument was canvassed by relying upon a
decision of this Court in the case of V.S. Lad and Sons (supra)
to the effect that the State Government has an executive power
to deal with the subjects envisaged under Section 23-C.
However, Section 23-C will not apply at all to regulating the
entry of minerals lawfully excavated in other States. The
substantial part of the arguments canvassed on behalf of the
State Government is on the issue of quid-pro-quo regarding
co-relation between the fees collected and the services being
rendered. The said argument is relevant provided that there is
a power conferred on the State to make the rules to regulate
the entry of minor minerals lawfully excavated from other
- 38 -
States by levying fee. Such power is not vesting in the State
Government.
ARGUMENT BASED ON ENTRY 66, LIST-II OF SCHEDULE
VII OF THE CONSTITUTION:
32. An argument was also canvassed based on entry 66 in
list-II of seventh schedule of the Constitution. Entry 66 is
about fees in respect of any of the matters in list-II. List-II is
about the Legislative Powers of the State Governments.
Therefore, the State Legislature is empowered to make a
plenary legislation by invoking Entry-66 of List-II. However,
the subject of regulating mining operations outside the State is
not included in entry-66, List-II. Entry-66 is about prescribing
fees in respect of any of the matters in list-II. Entry-23 in List-II
is about 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 field is
occupied by the said Act of 1957 enacted by the Union
Government which does not provide for levy of fees as
provided in the impugned sub-rule. Moreover, the State
Government has not enacted any law in terms of entry-66 of
the said list. Assuming that such a power to levy fee is vested
in the State Legislature by virtue of Entry-66 of List-II, a rule
making power can be exercised provided that a law is enacted
- 39 -
by the State Legislature authorizing such a levy by making
rules. No such law has been enacted.
33. As the State Government has no legislative competence
to make rules for levy of transportation fee or charge on
minerals lawfully excavated in other States, it is not necessary
for us to go into the question of quid pro quo regarding
existence of co-relation between the fees collected and the
services being rendered.
34. Now, coming to other argument canvassed by the
petitioners regarding breach of Article 301 and 304 of the
Constitution, it is not necessary for us to go into the said
argument, inasmuch as, we have held that neither under
Section 15 nor under Section 23-C of the said Act of 1957,
there is a power vesting in the State Government to make rules
for regulating the entry of lawfully excavated minerals from the
other State and to levy the fees on entry of lawfully excavated
minerals from other States into the State of Karnataka.
Therefore, these petitions must succeed. Accordingly, we
pass the following:
ORDER
i) The writ petitions are allowed in terms of the prayer (a)
of writ petition No.8851 of 2020 which reads thus:
- 40 -
(a) Struck down Rule 42 (7) of the Karnataka
Minor Mineral Concession Rules, 1994
inserted by way of an amendment notified
in the Special Gazette dated 30.06.2020
bearing Ref No. C1 115 MMN 2019
(Annexure-A) as unconstitutional and ultra
vires the Mines and Minerals (Development
and Regulation) Act, 1957 (Central Act 67
of 1957) by way of writ in the nature of
certiorari or any other appropriate writ,
order or direction";
ii) There shall be no order as to the costs.
Sd/-
CHIEF JUSTICE
Sd/-
JUDGE
VR
