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Jharkhand collected in time. Odisha did not.

Both States were operating under the same judgment - the nine-judge Constitution Bench ruling in Mineral Area Development Authority v. Steel Authority of India (2024), which held 8:1 that States possess the constitutional power to tax mineral rights and mineral-bearing land, and that royalty is not a tax. A follow-up order allowed retrospective recovery from April 2005, staggered over twelve years. On paper, every mineral-rich State stood to gain. In practice, the gain depended on how fast each State's machinery moved. Jharkhand moved fast enough to bank its collections. Odisha, whose recovery legislation was still tied up in litigation, did not -and its claim, reportedly exceeding ₹1 lakh crore, has effectively been erased by Section 9D of the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, passed by Parliament in three days this August.

Section 9D bars States from taxing mineral rights or mineral-bearing land except within conditions the Centre prescribes, and the detailed Rules will come under Section 13. Section 9D also applies to past i.e if the state had not collected the tax before the amendment, it can no longer recover that money. But, if the state had already collected the money, it can keep it.

On this backdrop, on 20th August, Congress General Secretary Jairam Ramesh said that Karnataka, Kerala and Telangana had prepared a “joint petition” challenging the MMDR Amendment Act and would approach the Supreme Court “within 10 days.” The challenge has since been filed, bringing the federal question into the Court's docket. The significance of the challenge, however, lies in the route by which a State can bring such a challenge before the Supreme Court. Article 131 is the Supreme Court's original-jurisdiction mechanism for disputes involving States and the Union-but whether that jurisdiction extends to a State's challenge to the validity of a Central law is the matter of concern before it ever reaches the question pertaining to the validity of the amendment.

Can a State Even Get Into Court to Ask?

Even if we assume that the retrospective part of Section 9D is constitutionally vulnerable, a prior question has to be answered first: does a State have a working procedural route to bring the challenge at all? The route is Article 131, the Supreme Court's original jurisdiction over Centre-State disputes, and, practically, the only route open to a State as a government, since Article 32 exists for persons whose fundamental rights are violated, not governments asserting fiscal claims.

Here the law is not actually uncertain but it is demonstrably split across binding, on-point authority. In State of Karnataka v. Union of India, in 1977, a seven-judge bench heard Karnataka's suit against a Central Commission of Inquiry; Justice P.N. Bhagwati's opinion took an expansive view, holding it is sufficient if the suit concerned a question on which the "existence or extent" of a legal rights of the state are in question- thereby accepting that Article 131 can be used to hear a dispute involving state's legal rights. But in 2011, a two-judge bench in State of Madhya Pradesh v. Union of India (2011) went the other way. Madhya Pradesh had challenged provisions of Parliamentary enacted Madhya Pradesh Reorganisation Act,2000 as violating Article 14 through an Article 131 suit; The court held that a challenge to the constitutional validity of Central legislation is simply not an "appropriate forum" question for Article 131 - the correct route was Article 32 or 226.

Again, in 2014 in the case of State of Jharkhand v. State of Bihar(2015) - an Article 131 suit over apportionment of pension-liabilities under the Bihar Reorganisation Act, 2000 was in question. Bihar raised precisely this objection, relying on the 2011 ruling. The Bench declined to follow it, recording their inability to agree, but since their bench was of equal strength to the 2011 bench, they could not simply overrule it. They referred this question to a larger bench.

In 2020, Kerala filed an original suit against the Citizenship Amendment Act and contested on the ground of violations of Articles 14, 21 and 25 under Article 131. But when Kerala filed this, the threshold question was already in sub judice with a larger bench; Kerala's suit falls within that same zone of unsettled law rather than having generated a fresh referral of its own. Neither reference appears to have been resolved as a distinct matter.

The position, therefore is not clear .The states' challenge to Section 9D's retrospective clause runs into an unresolved question. So, the procedural question comes first; the constitutional validity of the retrospective clause comes second.

Assuming the Door Opens: What's Actually at Stake

Let's say, for the sake of argument, that a State does get past this jurisdictional hurdle. What would it actually be fighting about once it's inside the courtroom? Section 9D isn't really one law-it's two, bundled under a single label, and only one of them is genuinely on shaky ground.

The first part restricts the states' power to impose the levies in future. This part is on solid footing, because MADA itself had already said that the existing Sections 9, 9-A, 25 of MMDR Act already empower Parliament to place limits on the states' taxing power in this area by law. So when Section 9D adds a similar limit for the future, Parliament isn't inventing a new power - it's simply using one the Supreme Court had shown the green light for.

The real trouble is in the second part. This is the part that reaches backward in time and wipes out money that MADA had already said States were rightfully owed. And this is where things get shaky, because the legal principle usually used to defend this kind of retrospective law simply wasn't built for a situation like this.

The governing authority on legislative validation is the Constitution Bench decision in Shri Prithvi Cotton Mills v. Broach Borough Municipality (1969): a legislature may validate a tax a court declared illegal, but only by removing the actual defect identified - not by simply declaring the judgment non-binding.

Every case in that line shares one feature: the legislature cures something a court found invalid. But, Section 9D's retrospective clause does the opposite. MADA did not find the States' power defective for the pre-amendment period, it affirmed the power and built a twelve-year mechanism for recovery. But, Section 9D removes not a defect but the consequence of a levy already confirmed by MADA. In simple terms, the court said “the levy is valid and can be recovered,” while Section 9D says “the levy may be valid, but the amount already held recoverable cannot now be recovered if it was not collected.”

The closest analogy is the Court's jurisprudence on vested and accrued rights. In The state of Maharashtra & Ors v. Prism Cement Limited & Anr (2025) the Court held that tax exemptions already accrued cannot be retrospectively withdrawn unless in presence of unambiguous legislative language expressly saying so. In The Punjab State Cooperative Agricultural Development Bank Ltd. v. Registrar, Cooperative Societies(2022), it was held that the government cannot take away the pension benefits retrospectively from the retired employees who were already receiving and this violates Articles 14 & 21. Even though the story is different from that of section 9D- but the basic principle is same i.e once something has been legally recognized & given effect, the government cannot retrospectively take it away without proper justification.

The Centre's Case, and Where It Runs Out

There is a good reason for applying Section 9D to the future in prospective manner. A uniform rule promoting stability and predictability. But, there is a significant difference between saying that States cannot impose the levy in the future and saying that they cannot recover money that was already legally due to them. It is therefore quite difficult to understand why a State should lose money it was legally entitled to recover merely because it was slower in completing the recovery process.

Therefore, before deciding whether Parliament could retrospectively extinguish what MADA confirmed States were owed, the Supreme Court may first have to decide whether a State can challenge it at all. That question, already referred to a larger Bench, now acquires immediate significance as Karnataka, Kerala and Telangana have approached the Court against the 2026 amendment. The outcome may shape the future course of these litigations.

Author is a LL.M. Scholar of Constitutional & Administrative Law at Gujarat National Law University. Views are personal.

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