Rajasthan High Court
Hindustan Zinc Limited vs The State Of Rajasthan ... on 2 February, 2023
Bench: Ashok Kumar Gaur
[2023/RJJP/001258]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Civil Writ Petition No.18805/2022
Hindustan Zinc Limited, Registered Office At Yashad Bhawan,
Swaroop Sagar Road, Udaipur through its Authorized Signatory
and Associate General Manager (Legal) and Head Legal, Kumar
Ankit S/o Shri Manvendra Kumar, Aged About 36 Years.
----Petitioner
Versus
1. The State Of Rajasthan, Through The Secretary,
Department Of Mines And Geology, Government Of
Rajasthan, Secretariat, Jaipur.
2. The Director, Minies And Geology, Government Of
Rajasthan, Directorate Of Mines, Khanij Bhawan, Udiapur.
3. The Mining Engineer, Department Of Mines And Geology,
Ajmer.
4. The Ajmer District Mineral Foundation Trust, Through Its
Member Secretary.
----Respondents
For Petitioner(s) : Mr.Uday N. Tiwary, Adv. with
Mr.Akshay Singh, Adv.
For Respondent(s) : Mr.R.P. Singh, AAG with Mr.Jaivardhan
Singh Shekhawat, Adv., Mr.Aditya
Singh, Adv. Mr.Chandra Vikram Singh,
Adv., Mr.Lakshya Dadhich, Adv.
HON'BLE MR. JUSTICE ASHOK KUMAR GAUR
Order
02/02/2023
The matter comes up for considering the interim relief,
prayed by the petitioner-Company, in the instant case, for staying
the effect and operation of impugned demand order dated
22.11.2022.
Heard learned counsel for the parties.
Learned Additional Advocate General Mr.R.P. Singh
[2023/RJJP/001258] (2 of 7) [CW-18805/2022]
appearing for the respondents-State has filed reply to the writ
petition as well as to the stay application.
Learned counsel for the petitioner-Company Mr.Uday N.
Tiwary has made following submissions:-
1. The similar issue as raised in the present writ petition, relating
to payment of interest on amount of District Mineral Foundation
Trust ('DMFT') is pending before the Principal Seat at Jodhpur i.e.
in the case of Hindustan Zinc Limited Vs. State of Rajasthan
& Ors. in S.B. Civil Writ Petition No.11954/2021 and therein,
interim order has also been passed on 21.09.2021, after hearing
both the sides. Further, in another S.B. Civil Writ Petition
No.18921/2022 (Hindustan Zinc Limited Vs. State of
Rajasthan & Ors.) the Principal Seat at Jodhpur has again
passed an interim order on 05.01.2023, after hearing both the
sides.
2. The impugned demand notice relating to demand of royalty
amount and interest thereon, cannot be made by the respondents,
as Section 9-B of the Mines and Minerals (Developments and
Regulation) Act, 1957 (hereinafter 'the Act of 1957')
nowhere prescribes the power to levy interest on the amount
which is required to be paid by way of contribution/fund to the
District Mineral Foundation Trust.
3. The State Government though has enacted the District
Mineral Foundation Trust Rules, 2016 (hereinafter 'the
DMFT Rules of 2016'), however, the said Rules do not apply to
the petitioner, as the petitioner-Company is engaged in excavating
major minerals and further, even as per the DMFT Rules of 2016,
[2023/RJJP/001258] (3 of 7) [CW-18805/2022]
there is no power conferred to levy interest on the outstanding
amount of royalty.
4. The Central Government has enacted the Mines and Minerals
(Contribution to District Mineral Foundation) Rules, 2015
(hereinafter 'the Rules of 2015') and as per Rule 2(b) of the
Rules of 2015, every holder of a mining lease is required to pay an
amount @30% of the royalty, in terms of the second schedule to
the said Act of 1957 in respect of mining lease granted before 12 th
January, 2015.
Learned counsel for the petitioner-Company submitted
that even the Central Rules, nowhere prescribes the levy of
interest on the royalty being not paid.
5. Learned counsel for the petitioner-Company submitted
that reliance placed by the respondents-State to levy interest is
not covered under Rule 49 of the Minerals (Other than Atomic
and Hydro Carbons Energy Minerals) Concession Rules,
2016 (hereinafter 'the Mineral Concession Rules of 2016'),
as no sum is due to the State Government and if at all anything is
due, the same can be deposited to the District Mineral Foundation
Trust, which is an independent body.
6. Learned counsel submitted that in absence of any
statutory provision for levying interest, the State is not
empowered to levy any interest on arrears of royalty.
Learned counsel places reliance on a judgment passed
by the Apex Court in the case of Shree Bhagwati Steel Rolling
Mills Vs. Commissioner of Central Excise and Another
reported in [(2016)3 SCC 643].
[2023/RJJP/001258] (4 of 7) [CW-18805/2022]
Learned counsel, on the basis of above submissions,
submitted that the petitioner-Company has a prima facie case in
its favour and further, the petitioner-Company has already
deposited their royalty but demand of interest for a period of
17.09.2015 to 31.05.2016 is prima facie illegal.
Learned counsel for the petitioner submitted that as far
as liability of the petitioner-Company to pay the principal amount
of DMFT amounting to Rs.15,21,732/- is concerned, the
petitioner-Company is prepared to deposit the same under the
protest, subject to reconciliation.
Learned counsel for the petitioner submitted that if any
outstanding principal amount will be required to be paid by the
petitioner-Company, the same would be paid within a period of
four weeks.
Per contra, learned AAG for the respondents-State
Major R.P. Singh has made following submissions:-
1. The plea taken by the petitioner that the interest cannot be
levied on outstanding royalty, may not be accepted by this Court,
as the State Government has been authorized to recover the
interest of any sum due to the Government.
Learned AAG submitted that the composition of District
Mineral Foundation Trust consists of different Trustees and the
members of the Trust are Government Officials and other
members of the Legislative Assembly/Zila Pramukh and as such,
the State has power to recover the interest, which has not been
paid to the petitioner-Company.
2. The DMFT Rules of 2016 does not make any distinction for
recovery of royalty as well as interest on major or minor minerals
[2023/RJJP/001258] (5 of 7) [CW-18805/2022]
and as such, the fund is required to be transferred to the statutory
trust.
Learned AAG submitted that the Hyper-technical distinction
is made by the petitioner-Company between the Trust and Govt.
The Act of 1957 prescribes under Section 9-B or under the DMFT
Rules of 2016, the Government is the Authorized body to recover
any sum due including the interest on non-payment of royalty.
3. Admittedly, the petitioner-Company has not paid the royalty
from 17.09.2015 to 31.05.2016 and the State has all the powers
to impose interest on such an outstanding amount.
4. The payment of interest in the eventuality of not making
contribution to the District Mineral Foundations, has already been
dealt with by the Apex Court in the case of Federation of Indian
Mineral Industries and Others Vs. Union of India & Another
reported in [(2017)16 SCC 186].
Learned AAG submitted that admittedly the petitioner-
Company has not made the full contribution to the District Mineral
Foundation and as such, the Apex Court has permitted to make
the contribution with interest @ 15% per annum from the due
date.
5. The order dated 21.09.2021 passed by the Principal Seat at
Jodhpur in the case of Hindustan Zinc Limited Vs. State of
Rajasthan & Ors. in S.B. Civil Writ Petition No.11954/2021,
has also imposed a condition by directing the petitioner-Company
to deposit a sum of Rs.100 Crores and learned AAG further
submits that if this Court is inclined to pass any interim order, a
proper condition may be imposed by directing the petitioner-
Company to discharge its statutory liability and the sum
[2023/RJJP/001258] (6 of 7) [CW-18805/2022]
outstanding, is required to be deposited by the petitioner-
Company.
I have considered the submissions made by learned
counsel for the parties and perused the material available on
record.
This Court, prima-facie, finds that Section 9-B of the
Act of 1957 has permitted the State Government to establish a
trust as a non-profit body to be called as the District Mineral
Foundation and as per sub-Section (6) of Section 9-B, the holder
of a mining lease who has already been granted such lease before
the Amendment Act, 2015 is required to pay additional royalty in
terms of second schedule of the Act.
This Court further finds that the Central Government
has enacted the Rules of 2015 and amount of contribution is to be
paid to the District Mineral Foundation in respect of major
minerals, by asking the holder of a mining lease to pay 30% of the
royalty.
This Court also prima-facie finds that the State
Government has framed the DMFT Rules of 2016 and the said
Rules apply to all the minerals.
This Court finds that the respondents-State has taken
recourse to Rule 49 of the Mineral Concession Rules of 2016 and
the State claims that the amount in question is due to the State
Government and as such, the impugned order issued by them is
justified.
This Court finds that the Apex Court in the case of
Shree Bhagwati Steel Rolling Mills (supra), has reiterated the
law that an interest can be levied and charged on delayed
[2023/RJJP/001258] (7 of 7) [CW-18805/2022]
payment of tax, if the statute that levy and charges tax makes a
substantive provision on that behalf.
The objection raised by learned AAG for the
respondents-State Mr.R.P. Singh that the Apex Court has already
permitted the levy of interest in the case of Federation of
Indian Mineral Industries (supra), the issue before the Apex
Court was with respect to the creation of DMFT either by the State
or by the Central Government and further the State Governments
were given power to issue notification by creating the trust.
The matter requires consideration.
This Court, as an interim measure, directs that no
coercive action will be taken against the petitioner-Company in
pursuance of impugned order dated 22.11.2022.
This Court makes it clear that in case, the writ petition
of the petitioner would be dismissed, in such an eventuality the
petitioner-Company would not claim any equity and it would be
required to pay the amount, as has been demanded in the
impugned order.
List this case on 13.03.2023 for final disposal, at orders
stage.
(ASHOK KUMAR GAUR), J
Himanshu Soni/7
Powered by TCPDF (www.tcpdf.org)
