DISTRICT MINING OFFICER AND ORS. versus TATA IRON AND STEEL CO. AND ANR.

Citation: [2001] SUPP. 1 S.C.R. 147 · Decided: 31-07-2001 · Supreme Court of India · Bench: G.B. PATTANAIK · Disposal: Disposed off

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Judgment (excerpt)

DISTRICT MINING OFFICER AND ORS. 
A 
V. 
TATA IRON AND STEEL CO. AND ANR. 
JULY 31, 2001 
[G.B. PATTANAIK, S.N. PHUKAN AND B.N. AGRAWAL, JJ.] 
B 
Cess and Other Taxes on Minerals (Validation) Act, 1992: 
Sections 2(1), 2(2) and 2(3)-Nature and scope of-Held, validated 
only levy and collection of cess and other taxes imposed under the invalid C 
state laws-But did not confer any right on state to levy, demand or collect 
fresh cess collectable upto 4.4.1991-Recovery of dues even after 4.4.1991 
would contravene provisions of Article 265 as it would amount to imposing 
a tax without any authority of law-Duration of Validation Act being only for 
a specified period and there being no saving clause, it is in the nature of D 
temporary statute-Section 2(3) only provides a limited saving clause for 
recovery of excess tax paid by assessee and does not confer a substantive 
power to levy and collect cess even after expiry of 4. 4.1991--Constitution of 
India, 1950 Article 265. 
Constitution of India, 1950-Article 14 validation Act validating E 
collection already made under the invalid state laws but not authorising fresh 
collection and levy after 4.4.1991-Held, not violative of Article 14--Cess 
and other Taxes on Minerals (Validation) Act, 1992. 
General Clauses Act, 1897-Section 6-Applicability of-Held, not 
applicable to temporary statutes-Cess and Other Taxes on Minerals F 
(Validation) Act, 1992. 
Interpretation of Statutes: 
Legislative intent-Interpretation of-Held, a statute has to be construed 
according to the intent of its makers-True and legal meaning of an enactment 
has to be derived by considering the meaning of the words used in the enactment G 
in the light of the mischief which the enactment intends to remedy. 
Words and Phrases: 
"Imposition and collection" Meaning of in the context of the preamble 
of the Cess and Other Taxes on Minerals (Validation) Act, 1992. 
H 
147 
A 
148 
SUPREME COURT REPORTS [2001] SUPP. I S.C.R. 
In India Cement case and Orissa Cement case, this Court struck down 
various State laws authorising levy on minerals as ultra vires on the ground 
that the States were denuded of their power to levy tax on account of 
declaration made by the Parliament CQntained in Section 2 of the Mines and 
Minerals (Regulation and Development) Act, 1957. In view of the said 
B judgments, State Government became liable to refund cess and other taxes 
causing serious impact on State revenues and to prevent liability of refund, 
the Cess and Other Taxes on Minerals (Validation) Act, 1992 was passed by 
Parliament. Several writ petitions were filed in different High Courts 
challenging the constitutional validity of the said Validation Act Patna High 
Court while upholding the constitutional validity of the Validation Act held 
C that it authorised retention of cess and taxes already collected under the 
invalid state laws but did not authorise fresh recovery of any tax or cess after 
4.4.1991 even if the liability was incurred under the validation laws before 
4.4.1991. Consequently, since the State was restrained from realising any 
demands, the present appeal was filed on behalf of the State of Bihar. 
However, this Court in Kannadasan case upheld the constitutional validity of 
D the Validation Act as well as the right of the State to levy and demand cess 
collectable upto 4.4.1991. Several High Courts following the judgment of this 
Court in Kannadasan case, upheld the right of the State Government to levy, 
demand and collect tax which was collectable upto 4.4.1991. The said 
judgments were also assailed by the assessees in different SLPs and transfer 
E petitions before this Court Review Petitions were also filed by the assessees 
against the judgment of Kannadasan case which were to be disposed of after 
the disposal of present SLPs. 
On behalf of State of Bihar it was contended that the Validation Act 
authorised the State Governments to levy and realise tax which were due up 
F to the date of validation, namely 4.4.1991 and there should not be any embargo 
on the State's power to realise the same notwithstanding the fact that the life 
of the validation was only upto 4.4.1991; that the Validation Act could not be 
held to be a temporary statute and remains as a valid piece of legislation, 
conferring the right to collect and make the levy which would be collectable 
G upto 4.4.1991 and the provisions of General Clauses Act would be applicable; 
that there was no quarrel with the constitution

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