Hyderabad HC upholds cement firms' plea on MDF

Hyderabad: The Hyderabad High Court has stopped Singareni Collieries from collecting contributions for the Mineral Development Foundation (MDF) from cement companies and coal traders, with retrospective effect from January 2015.

The Centre, while amending the Mines and Minerals (Development & Regulation) Act, 1957, had introduced a provision to collect contributions from companies involved in mining to establish MDF at the district-level to take up welfare schemes in mining affected areas.

Accordingly, the TS government notified the MDFs on January 20, 2016, and the director of mines and geology directed the collieries to collect contributions from cement companies and coal traders with retrospective effect from January 2015.

Advocate Sivaraju Srinivas moved petitions on behalf of Birla Cements and Orient Cements before Justice P.V. Sanjay Kumar.

Another advocate, Vedula Srinivas, moved petitions on behalf of 160 coal traders and companies before Justice M.S. Ramachandra Rao.

Counsels contended that the amendment to the MMDR Act stipulated that the contribution was to be collected from the date on which the MDFs were notified (January 20, 2016) and the action of the state government and the Singareni Collieries in collecting them with retrospective effect from January 2015 was contrary to the provision.

Observing that the authorities cannot introduce new taxes with retrospective effect, both the judges granted separate interim orders staying the action and directing all the respondents not to take any coercive steps.

While adjourning the hearing the judges issued notices to respondents directing them to file counter affidavits.