MMDR Act Ousts State's Power Over Taxing Minerals; Limitation Imposed In National Interest : Union Tells Supreme Court [DAY 6]

The Supreme Court on Wednesday (March 12), resumed its 6th day of hearing on the matter pertaining to the imposition of royalties on mining. The Constitution Bench delved into the Constituent Assembly Debates to dissect the legislative intent of Entry 54 List I which gives the Union the powers over the regulation and development of mines and minerals. The Union submitted that the Mines and Minerals (Development and Regulation) Act of 1957 (MMDR) was a manifest extension of the powers under Entry 54 List I. It was highlighted that the MMDR Act was to be seen as the major block of limitation when interpreting 'State's powers on taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development'Appearing for the Union, the Solicitor General (SG) Mr Tushar Mehta drew attention to the Constituent Assembly Debates (CAD) of August 31, 1949, where Entry 52, 53, and 54 in the final constitution, and Entries 65, 64, and 66 in the draft constitution, were debated. Dr. Ambedkar's perspective was highlighted, emphasizing that once the centre obtains jurisdiction over a particular industry (Entry 52 List I), that industry becomes subject to Parliament's jurisdiction in all aspects. “The relevant portion of the debate is as under - Hon'ble Dr. Ambedkar - (referring to Entry 52 List I) My submission is that once the centre obtains jurisdiction over any particular industry as provided for in this Entry, the industry becomes subject to the jurisdiction of the parliament in all its aspects.” The SG contended the similarity of words and thereby a common legislative intent between Entry 52 List I (Industries controlled by Union by Central Law) and Entry 54 List I (Union's Power over Regulation of Mines and Mineral Development). “ My lords please note this is entry 52, similarly worded that industries which are declared by the law made by the Parliament to be in Public Interest…similar to Entry 54 List I” Justice Nagarathna however pointed out a crucial difference, highlighting that Entry 52 involves industries the Union has declared control over, whereas Entry 54 has a broader scope related to the regulation of mines.“ No there is one difference between Entry 52 and 54 List I, Entry 52 it is the industries the control on which the Union has declared. But Entry 54 -' regulation of mines and mineral development to the extent to which such is declared by the Parliament. There is a vital difference.” The SG argued that Entry 54 might have a wider ambit than Entry 52, indicating the significant implications of these constitutional entries on the regulation and development of mines and minerals The CJI intervened, emphasizing that the court has to deal with understanding 'limitations' as mentioned under Entry 50 List II (State's power on taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development). He clarified that when the central government takes control of an industry, it is absolute in all aspects of control. The SG asserted that the question of where the particular limitation (mentioned in Entry 50 List II) lies is inappropriate. He argued that the limitation is imposed by law itself, not under the law and that the existence of law inherently serves as a limitation. “ The limitation is put by law, not under the law. By law, itself is a limitation.” MMDR Act 1957 Is The Limitation Itself - SG Exemplifies With A Chair Metaphor The SG's main contention was that there is no explicit negative provision in the MMDR Act, stating that state legislatures are stripped of power. He argued that such a provision is unnecessary as the negative implication arises from the central government occupying the field. Using the analogy of occupying a chair, he asserted that no additional provision is needed to exclude others. The example was given to explain that the 'limitation' as mentioned under Entry 50 List II need not refer to an expressly prohibiting provision. The existence of the MMDR Act itself was sufficient to limit the state powers under Entry 50 List II. “ There is no negative provision in the MMDR Act, that state legislature is denuded of the power because no legislative drafting would have such a provision. A negative provision is not required. However, that negative provision is implied by occupying the field. Suppose I am sitting on this chair. Mr Singhvi (present next to the SG) cannot sit on this chair as I am occupying it. …so I do not have to say that no Dr Singhvi will not sit here, I already occupy the chair.” Justice Nagarathna interjected, questioning what lies beyond the metaphorical chair. She emphasized that the chair is not exhaustive and that there might be elements beyond it. Implying that one may have to look beyond the ambit of the MMDR Act alone. “ The question is what is beyond the chair? The chair is not exhaustive of everything. There is something beyond the chair” The SG responded by stating that when the...

MMDR Act Ousts State's Power Over Taxing Minerals; Limitation Imposed In National Interest : Union Tells Supreme Court [DAY 6]

Anmol Kaur Bawa

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