SC allows mineral-rich states to recover royalty & tax dues since 2005 from Centre

Rejects Centre’s prospective plea

In a historic victory for mineral-rich states, the Supreme Court of India on Wednesday allowed these states to recover from the Centre and mining companies, including Public Sector Undertakings (PSUs), royalty and tax dues on mineral rights and mineral-bearing lands. These dues, amounting to thousands of crores of rupees, date back to April 1, 2005, and will be recoverable over a period of 12 years.

The verdict, pronounced on Wednesday by a nine-judge Constitution bench led by Chief Justice DY Chandrachud, follows a majority 8:1 ruling on July 25 that affirmed states’ legislative power to tax mineral rights. This decision effectively overturned previous interpretations that had placed this authority with the Parliament. Chief Justice Chandrachud, speaking on behalf of the bench, rejected arguments from the Centre and mining companies, including Public Sector Undertakings (PSUs), who sought to apply the July 25 verdict only prospectively. The bench, comprising Justices Hrishikesh Roy, Abhay S Oka, BV Nagarathna,

JB Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma, and Augustine George Masih, noted the significant financial implications of their decision.