# MINERAL AREA DEVELOPMENT AUTHORITY ETC v. M/S. STEEL AUTHORITY OF INDIA AND ORS

- **Citation:** [2011] 4 S.C.R. 19
- **Court:** Supreme Court of India
- **Decided:** 2011-03-30
- **Case number:** Civil Appeal Nos.4056-64 of 1999
- **Bench:** S.H. Kapadia, K.S. Radhakrishnan, Swatanter Kumar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mineral-area-development-authority-etc-v-m-s-steel-authority-of-india-and-ors-27603
- **Pages:** 6

## Headnote

Reference to larger Bench:
Mines and minerals - Royalty- Nature of- Tax on lands
and buildings and on mineral rights - Conflict between
decision rendered by five judge Bench of Supreme Court and
decision delivered by seven Judge Bench of Supreme Court
A
B
c
- Questions of law framed which need consideration by the
D
larger bench - Request for reference to the Bench of nine
Judge - Matter directed to be placed on the administrative
side before the Chief Justice for appropriate orders - Mines
and Minerals (Regulation and Development) Act, 1950- ss.2,
9, 15(3) - Constitution of India, 1950 - Seventh schedule, List
E
I, Entry 54; List II, Entries 49, 50.
State of West Bengal v. Kesoram Industries Ltd. and Ors.
(2004) 10 SCC 201; India Cement Ltd. and Ors. v. State of
Tamil Nadu and Ors. (1990) 1 SCC 12; M.P. V.
Sundararamier and Co. v. State of Andhra Pradesh (1958) 1
SCR 1422; Central Board of Dawoodi Bohra Community and
Anr. v. State of Maharashtra. and Anr. (2005) 2 SCC 673 -
referred to.
Case Law Reference:
(2004) 1 o sec 201
(1990) 1 sec 12
(1958) 1 SCR 1422
referred to
referred to
referred to
19
Para 5
Para 5
Para 9
F
G
H
A
20
SUPREME COURT REPORTS
[2011) 4 S.C.R.
(2005) 2 sec 673
referred to
Para 11
CIVIL APPELLATE/ORIGINAL JURISDICTION : Civil
Appeal Nos. 4056-4064 of 1999.
From the Judgment & Order 22.3.1999 of the High Court
B of Judicature at Patna, Ranchi Bench Ranchi, in CWJC No,
1885, 178, 2251, 2252, 1783, 2915of1994 (R), 3113of1993
& 269 & 268 of 1994 (R).
WITH
C C.A. Nos. 4710-4721, 4722-4724of1999, 1883 of 2006, T.P.
(C) No. 722 of 2006, C.A. Nos. 4745, 4990, 4991, 4992, 4993
of 2006, TP (C) No. 951 of 2006, C.A. Nos. 5649, 5599 of
2006, 378, 665, 1180 of 2007, TP (C) Nos. 481, 906 of 2007,
C.A. Nos. 3400, 3401, 3402, 3403 of 2008, 2055, 2174 of
D 2009, 6498, 6137 of 2008, SLP (C) No. 26160 of 2008, C.A.
E
Nos. 6499, 6497, 7397 of 2008, 96, 97, 98 of 2009, SLP Nos.
3849 of 2006, 763, 15900 of 2007, TP (C) Nos. 613, 626 of
2009, C.A. Nos. 4478, 4479 of 2010 & SLP (C) No. 4191 of
2011.
Vivek K. Thanka Parag P. Tripathi, T.S. Doabia, ASG,
Rakesh Dwivedi, K.K. Venugopal, Mahabir Singh, S.K.
Bagaria, S.B. Upadhyay, Bhaskar, P. Gupta, Ajit Kumar Sinha,
P. Sadasivan Nair, Dipankar Gupta, Nagendra Rai, R.F.
F Nariman, A.K. Ganguli, Shambhu Prasad Singh, H. N. Salve,
Dr. Abhishek Manu Singhvi, Ajit Kumar Sinha, Mahabir Singh,
Shail Kumar Dwivedi, AAG, Aparesh Kumar Singh, Tapesh
Kumar Singh, Preetika Dwivedi, Sansriti Pathak, Gopal
Pathak, Ma. Pooja Dhar, Gopal Sankaranarayana, Radha
G Shyam Jena, Gp. Capt. Karan Singh Bhati, Rashid, Aishwarya
Bhati, Pawan Upadhyay, Rajesh R. Dubey, Anisha Upadhyay',
Sharmila Upadhyay, Praveen Kumar, Bharat Sangal, Alka
Singh, Akshat Shrivastava, P.P. Singh, lnderjeet Yadav, Anip
Sachthey, Mohit Paul, Shagun Matta, Syed Shahid Hussain
H Rizvi, D.K. Pradhan, Ashok Kumar Gupta-I, T.G. Narayanan
•
•
MINERAL AREA DEVELOPMENT AUTHORITY ETC. v. 21
STEEL AUTHORITY OF INDIA AND ORS.
Nair, K.N. Madhusoodanan, Sunil Kumar Jain, Parmatma
A
Singh, Vanita Bhargava, Ajay Bhargava, Nitin Mishra (for
Khaitan & Co.) S.K. Verma, E.C. Agrawala, Ashok Kumar
Singh, Sunil Dogra (for Lawyer's Knit & Co.), P.V. Yogeswaran,
U.A. Rana, Devina Sehgal (for Gagrat & Co.), Ruby Singh
Ahuja, Sridhar Potarju, Gaichangpou Gangmei, Guntur
B
Prabhakar, Kuna! Verma, Prashant Kumar (for AP & J
Chaambers), Gopal Prasad, Anupam Lal Dass, A. Bhavan
Singh, Ajay Aggarwal, Kanika Gomber, Rajan Narain, Manu
Nair, Kirat Singh, Tanuj Bhushan, Adit Pujari (for Suresh A.
Shroff & Co.), Abhishth Kumar, Rakesh K. Sharma, Prashant
C
Jha, Manjula Gupta, Vaibhav, Punam Kumari, Prem Sunder
Jha, Lyna Perira, Manjula Gupta, Prashant Jha, Syed Shaid
Hussain Rizvi, D.K. Pradhan, Manik Karanjawala, Praveen
Kumar, Sunil Kumar Jain, Aneesh Mittal Parmatma Singh,
Aakansksha Munjhal, Shally Bhasin Maheshwari, E.C.
0
Agrawala, Bharat Sangal, R.R. Kumar Vernika Tomar, Alka
Singh, B. Vijayalakshmi Menon, Gaurav Kejriwal, Jatinder
Kumar Bhatia, Ashutosh

## Text

•
[2011] 4 S.C.R. 19
MINERAL AREA DEVELOPMENT AUTHORITY ETC.
v.
M/S. STEEL AUTHORITY OF INDIA AND ORS.
(Civil Appeal Nos.4056-64 of 1999)
MARCH 30, 2011
[S.H. KAPADIA, CJI, K.S. RADHAKRISHNAN AND
SWATANTER KUMAR, JJ.]
Reference to larger Bench:
Mines and minerals - Royalty- Nature of- Tax on lands
and buildings and on mineral rights - Conflict between
decision rendered by five judge Bench of Supreme Court and
decision delivered by seven Judge Bench of Supreme Court
A
B
c
- Questions of law framed which need consideration by the
D
larger bench - Request for reference to the Bench of nine
Judge - Matter directed to be placed on the administrative
side before the Chief Justice for appropriate orders - Mines
and Minerals (Regulation and Development) Act, 1950- ss.2,
9, 15(3) - Constitution of India, 1950 - Seventh schedule, List
E
I, Entry 54; List II, Entries 49, 50.
State of West Bengal v. Kesoram Industries Ltd. and Ors.
(2004) 10 SCC 201; India Cement Ltd. and Ors. v. State of
Tamil Nadu and Ors. (1990) 1 SCC 12; M.P. V.
Sundararamier and Co. v. State of Andhra Pradesh (1958) 1
SCR 1422; Central Board of Dawoodi Bohra Community and
Anr. v. State of Maharashtra. and Anr. (2005) 2 SCC 673 -
referred to.
Case Law Reference:
(2004) 1 o sec 201
(1990) 1 sec 12
(1958) 1 SCR 1422
referred to
referred to
referred to
19
Para 5
Para 5
Para 9
F
G
H
A
20
SUPREME COURT REPORTS
[2011) 4 S.C.R.
(2005) 2 sec 673
referred to
Para 11
CIVIL APPELLATE/ORIGINAL JURISDICTION : Civil
Appeal Nos. 4056-4064 of 1999.
From the Judgment & Order 22.3.1999 of the High Court
B of Judicature at Patna, Ranchi Bench Ranchi, in CWJC No,
1885, 178, 2251, 2252, 1783, 2915of1994 (R), 3113of1993
& 269 & 268 of 1994 (R).
WITH
C C.A. Nos. 4710-4721, 4722-4724of1999, 1883 of 2006, T.P.
(C) No. 722 of 2006, C.A. Nos. 4745, 4990, 4991, 4992, 4993
of 2006, TP (C) No. 951 of 2006, C.A. Nos. 5649, 5599 of
2006, 378, 665, 1180 of 2007, TP (C) Nos. 481, 906 of 2007,
C.A. Nos. 3400, 3401, 3402, 3403 of 2008, 2055, 2174 of
D 2009, 6498, 6137 of 2008, SLP (C) No. 26160 of 2008, C.A.
E
Nos. 6499, 6497, 7397 of 2008, 96, 97, 98 of 2009, SLP Nos.
3849 of 2006, 763, 15900 of 2007, TP (C) Nos. 613, 626 of
2009, C.A. Nos. 4478, 4479 of 2010 & SLP (C) No. 4191 of
2011.
Vivek K. Thanka Parag P. Tripathi, T.S. Doabia, ASG,
Rakesh Dwivedi, K.K. Venugopal, Mahabir Singh, S.K.
Bagaria, S.B. Upadhyay, Bhaskar, P. Gupta, Ajit Kumar Sinha,
P. Sadasivan Nair, Dipankar Gupta, Nagendra Rai, R.F.
F Nariman, A.K. Ganguli, Shambhu Prasad Singh, H. N. Salve,
Dr. Abhishek Manu Singhvi, Ajit Kumar Sinha, Mahabir Singh,
Shail Kumar Dwivedi, AAG, Aparesh Kumar Singh, Tapesh
Kumar Singh, Preetika Dwivedi, Sansriti Pathak, Gopal
Pathak, Ma. Pooja Dhar, Gopal Sankaranarayana, Radha
G Shyam Jena, Gp. Capt. Karan Singh Bhati, Rashid, Aishwarya
Bhati, Pawan Upadhyay, Rajesh R. Dubey, Anisha Upadhyay',
Sharmila Upadhyay, Praveen Kumar, Bharat Sangal, Alka
Singh, Akshat Shrivastava, P.P. Singh, lnderjeet Yadav, Anip
Sachthey, Mohit Paul, Shagun Matta, Syed Shahid Hussain
H Rizvi, D.K. Pradhan, Ashok Kumar Gupta-I, T.G. Narayanan
•
•
MINERAL AREA DEVELOPMENT AUTHORITY ETC. v. 21
STEEL AUTHORITY OF INDIA AND ORS.
Nair, K.N. Madhusoodanan, Sunil Kumar Jain, Parmatma
A
Singh, Vanita Bhargava, Ajay Bhargava, Nitin Mishra (for
Khaitan & Co.) S.K. Verma, E.C. Agrawala, Ashok Kumar
Singh, Sunil Dogra (for Lawyer's Knit & Co.), P.V. Yogeswaran,
U.A. Rana, Devina Sehgal (for Gagrat & Co.), Ruby Singh
Ahuja, Sridhar Potarju, Gaichangpou Gangmei, Guntur
B
Prabhakar, Kuna! Verma, Prashant Kumar (for AP & J
Chaambers), Gopal Prasad, Anupam Lal Dass, A. Bhavan
Singh, Ajay Aggarwal, Kanika Gomber, Rajan Narain, Manu
Nair, Kirat Singh, Tanuj Bhushan, Adit Pujari (for Suresh A.
Shroff & Co.), Abhishth Kumar, Rakesh K. Sharma, Prashant
C
Jha, Manjula Gupta, Vaibhav, Punam Kumari, Prem Sunder
Jha, Lyna Perira, Manjula Gupta, Prashant Jha, Syed Shaid
Hussain Rizvi, D.K. Pradhan, Manik Karanjawala, Praveen
Kumar, Sunil Kumar Jain, Aneesh Mittal Parmatma Singh,
Aakansksha Munjhal, Shally Bhasin Maheshwari, E.C.
0
Agrawala, Bharat Sangal, R.R. Kumar Vernika Tomar, Alka
Singh, B. Vijayalakshmi Menon, Gaurav Kejriwal, Jatinder
Kumar Bhatia, Ashutosh Kumar Sharma, Gunnam
Venkateswara Rao, B.S. Banthia, Vikas Upadhyay, Rishabh
Sancheti, Sunita Sharma, Rekha Pandey, Asha G, Nair, D.S.
Mahra, V.K. Verma, Dharmendra Kumar Sinha, Ashwarya
E
Sinha, Ambhoj Kumar Sinha, Satyajit A. Desai, Prashant R.
Dahat, Somanath Padhan, Ashid Khan, Rajneesh Bhaskar,
· Jyoti Tripathi, Atul Jha, Rajesh Srivastava, Ram Naresh Gupta,
Abhishek Gupta, Milind Kumar, Kanku Gupta, Gaurav Jain,
Abha Jain, G.N. Reddy, V. Pattabhiram, Nandini Sen, D.P.
F
Mukherjee, Anip Sachthey, Mohit Paul, Shagun Matta for the
appearing parties.
The following Order of the Court was delivered
ORDER
Having heard the matter(s) for considerable length of time,
we are of the view that the matter needs to be considered by
the Bench of Nine Judges. The questions of law to be decided
G
H
•
22
SUPREME COURT REPORTS
[2011] 4 S.C.R.
A by the larger Bench are as follows:
1.
Whether 'royalty' determined under Sections 9/
15(3) of the Mines and Minerals (Regulation &
Development) Act, 1957 (Act 67 of 1957, as
B
amended) is in the nature of tax?
2.
Can the State Legislature while levying a tax on land
under Entry 49 List II of the Seventh Schedule of the
Constitution adopt a measure of tax based on the
value of the produce of land? If yes, then would the
c
Constitutional position be any different insofar as
the tax on land is imposed on mining land on
account of Entry 50 List II and its interrelation with
Entry 54 List I?
D
3.
What is the meaning of the expression "Taxes on
mineral rights subject to any limitations imposed by
Parliament by law relating to mineral development"
within the meaning of Entry 50 of List II of the
Seventh Schedule of the Constitution of India?
E
Does the Mines and Minerals (Regulation &
Development) Act, 1957 contain any provision
which operates as a limitation on the field of
legislation prescribed in Entry 50 of List II of the
Seventh Schedule of the Constitution of India? In
F
particular, whether Section 9 of the aforementioned
Act denudes or limits the scope of Entry 50 of List
II?
4.
What is the true nature of royalty I dead rent payable
on minerals produced I mined I extracted from
G
mines?
5.
Whether the majority decision in State of West
Bengal v. Kesoram Industries Ltd. and Ors, (2004)
10 sec 201, could be read as departing from the
H
law laid down in the seven Judge Bench decision
•
MINERAL AREA DEVELOPMENT AUTHORITY ETC. v.
23
STEEL AUTHORITY OF INDIA AND ORS.
in India Cement Ltd. and Ors. v. State of Tamil
A
Nadu and Ors., (1990) 1 SCC 12?
6.
Whether "taxes on lands and buildings" in Entry 49,
List II of the Seventh Schedule to the Constitution
contemplate a tax levied directly on the land as a
B
unit having definite relationship with the land?
7.
What is the scope of the expression "taxes on
mineral rights" in Entry 50, List II of the S~venth
Schedule to the Constitution?
c
8.
Whether the expression "subject to any limitation
imposed by Parliament by law relating to mineral
developmenf' in Entry 50, List II refers to the subject
matter in Entry 54, List I of the Seventh Schedule
to the Constitution?
D
...
9.
Whether Entry 50, List II read with Entry 54, List I
of the Seventh Schedule to the Constitution
constitute an exception to the general scheme of
Entries relating to taxation being distinct from other
E
Entries in all the three Lists of the Seventh Schedule
to the Constitution as enunciated in M.P. V.
Sundararamier & Co. v. State of Andhra Pradesh
& Anr., (1958) 1 SCR 1422 at 1481 (bottom)?
10.
Whether in view of the declaration under Section 2
F
of the Mines and Minerals (Development &
Regulation) Act, 1957 made in terms of Entry 54
of List I of the Seventh Schedule to the Constitution
and the provisions of the said Act, the State
Legislature is denuded of its power under Entry 23
of List II and/or Entry 50 of List II?
G
11.
What is the effect of the expression " ... subject to
any limitation imposed by Parliament by law relating
to mineral development" on the taxing power of the
H
A
B
24
SUPREME COURT REPORTS
[2011] 4 S.C.R.
State Legislature in Entry 50 of List II, particularly
in view of its uniqueness in the sense that it is the
only entry in all the entries in three Lists (Lists I, II
and Ill) where the taxing power of the State
Legislature has been subjected to "any limitation
imposed by Parliament by law relating to mineral
development".
Before concluding, we may clarify that normally the Bench
of five learned Judges in case of doubt has to invite the
C attention of the Chief Justice and request for the matter being
placed for hearing before a Bench of larger coram than the
Bench whose decision has come up for consideration (see:
Central Board of Dawoodi Bohra Community and Anr. v. State
of Maharashtra and Anr. - 2005 (2) SCC 673). However, in
0 the present case, since prima facie there appears to be some
conflict between the decision of this Court in State of West
Bengal v. Kesoram Industries Ltd. & Ors. (supra) which
decision has been delivered by a Bench of five-Judge of this
Court and the decision delivered by seven-Judge Bench of this
Court in India Cement Ltd. and Ors. v. State of Tamil Nadu
E and Ors. (supra) reference to the Bench of nine-Judge is
requested. Office is directed to place the matter on the
administrative side before the Chief Justice for appropriate
orders.
D.G.
Matter referred to larger Bench.
•