Centre Moves SC Against Verdict on Mineral Taxation Rights

New Delhi: The Centre on Tuesday informed the Supreme Court that it has filed a curative petition challenging the nine-judge bench ruling which, by an 8:1 majority, held that the legislative power to tax mineral rights rests with the states.

Appearing for the Centre before a bench of Justices Vikram Nath and Sandeep Mehta, Solicitor General Tushar Mehta said, “We have filed a curative petition with all seriousness.”

Last year, the apex court had dismissed review pleas against its July 25, 2024 verdict.

In that landmark ruling, a nine-judge Constitution Bench headed by then Chief Justice D.Y. Chandrachud held that Parliament does not have the legislative competence to tax mineral rights under Entry 54 of List I of the Constitution, which pertains to regulation of mines and mineral development by the Centre. However, it added that Parliament could legislate to impose “limitations” on the States’ power to levy such taxes.

In her dissent, Justice B.V. Nagarathna held that royalty was in the nature of a tax or exaction and that the Centre did have the power to levy it.

On August 14 last year, in a major win for mineral-rich states, the apex court allowed them to recover royalty and tax dues on mineral rights and mineral-bearing lands, worth thousands of crores, from the Centre and mining companies for the period beginning April 1, 2005.

The court ruled that the dues would be paid in instalments over 12 years starting April 1, 2026. It also directed that interest and penalties on demands raised for the period before July 25, 2024 would stand waived for all assessees.