Supreme Court Dismisses Review Pleas on Mineral Royalty Levy

In September 2024, Supreme Court rejected petitions seeking review of its earlier verdict, upholding the states' authority to levy royalties on minerals, allowing them to tax mining land retrospectively.

Key Points

SC Upholds States’ Power to Levy Royalties: The Supreme Court, in an 8:1 ruling led by Chief Justice D Y Chandrachud, reaffirmed that states can impose royalties on mineral extraction, clarifying that these royalties are not considered taxes.
Dismissal of Review Petitions: A review petition was dismissed by the majority of the bench, which found no errors in the original ruling.
Retrospective Application of Taxation: The court allowed the ruling to have a retrospective effect, enabling states to collect tax arrears from mining companies dating back to April 1, 2005, without imposing penalties or interest.
Centre’s Concern on Economic Impact: The Centre sought a review, arguing that retrospective tax collection could negatively impact the mining sector and ultimately burden the common man. However, the Supreme Court dismissed the petitions, maintaining its original verdict.
Implications for the Mining Sector: This decision could lead to significant financial liabilities for mining companies, as states are now empowered to demand past tax dues, potentially increasing costs for consumers.
Historical Context: The 25^th July 2024 judgment that upheld the state's right to levy royalties on minerals marked a pivotal moment in India's legislative framework governing mineral extraction and state taxation rights.