H. R. S. MURTHY versus COLLECTOR OF CHITTOOR AND ANOTHER

Citation: [1964] 6 S.C.R. 666 · Decided: 04-02-1964 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed

Cited by 8 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

666 
SUPREME COURT REPORTS 
1964 
of sales-tax by fixing upon the actual situation of the goods 
Than Singh 
within the Province at 1the date of the contract, for the 
.. 
.. 
v.f 
T 
purposes of levying tax on sales. The Legislature has thereby 
... qJt:o. 
o 
axes 
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not overstepped the limits of its authority : The Tata Iron 
Shah J. 
& Steel Company Ltd. v. The State of Bihar('). No argu-
ment has therefore been advanced before us to support the 
plea of unconstitutionality. 
1964 
February, 4 
All the appeals fail and are dismissed with costs. One 
hearing fee. 
Appeals dismissed. 
H. R. S. MURTHY 
v. 
COLLECTOR OF CHITTOOR AND ANOTHER 
(P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, K. c. DAS 
GUPTA, J. C. SHAH AND N. RA.TAGOPALA AYYANGAR JJ.) 
Mining Lease-Notice of demand for payment of land cess-Validity-
Land cess, if recoverable as an arrear of land revenue-If a tax 
on mineral rights-Expression ''Royalty'', 1ne1111ing of-If include.s 
royalty payable under a mining lease-Madras District Boards Act 
(Mad. Act No. XIV of 1920), ss. 78 and 79-Mines and Minerals 
(Regulation and Development) Act, (Lill of 1948), and Act LXV/l 
of [957, Entry 49 of the State List. 
Under the terms of a mining lease the lessee worked the mines and 
won iron ore in a tract of land in a village in Chittor district and bound 
himself to pay a dead rent if he used the leased land for the extraction 
of iron ore, to pay a royalty on iron ore if it Were used for extraction 
of iron and in addition to pay a surface rent in respect of the surface 
area occupied or used. The lessee working the mines extracted ore 
and marketed it. After separation from Madras in 1953, the District 
of Chittoor became part of the Andhra State. In 1955 a demand was 
made for the payment of land cess under ss. 78 and 79 of the Madras 
District Boards Act and including in the computation of the 
''annual 
rent value", the amounts payable to Government in each year under 
the mining lease both as surface rent and royalty. On challenge to the 
validity of this notice by the lessee, the High Court quashed the notices. 
(I) [19S8] S.C.R. !3S5. 
6 S.C.R. 
SUPREME COURT REPORTS 
After this decision the lessee died. 
On March 10, 1955, two notices 
1964 
were issued to the appellant demanding payment of cess for the years H. R. s. Murthy 
1952-54 and 1955-57 respectively and threatening coercive proceed-
v. 
ings, for their recovery in the event of non-compliance. 
Impugning 
Collector of 
the validity of the earlier notices of demand, the appellant filed a writ 
Chittoor 
petition in the 
High 
Court and 
a 
similar 
petition challenging 
the validity of the notice of demand for the later period. Pending 
these petitions a ·further notice of demand for payment of cess for the 
years 1958-59 was served on the appellant in August 29, 1960 and to 
obtain a similar relief in respect of this notice and the proceedings for 
recovery thereof, the appellant filed a writ petition in this Court and 
contended: (I) that the expression "royalty" under s. 79(1) ·does not 
signify royalty as commonly understood but is confined to the rent 
payable for the beneficial use of the surface of the land; (2) assuming 
that royalty in the sense mentioned in point No. l is within ss. 78 and 79, 
of the Act, the provision imposing the land cess quoad royalty under 
the mining leases must be held to be repealed by the Central Acts of 
1948 and 1957; (3) is the land cess demanded by the impugned notices 
dated March 10, 1958 and August 29, 1960 recoverable as an arrear 
of land revenue under the law? (4) s. 221 of the Act which made the 
provision for the recovery of sums due as taxes had, by reason of the 
changes effected in the rules, ceased to be applicable to the recovery 
of land cess under s. 78. 
Held: (i) Where the land is held On lease, as in the present case, 
the lease amount is specifically referreU to in s. 79 of the Act as one 
of the components for the complltation of the annual rent value. 
It i1 
therefore obvious that 'royalty' which follows the expression 'lease 
amount' is something other than the return to the lessor or licenser for 
the use of the land surface and represents as it normally connotes the 
payment made for the materials or minerals won from the land. 
(ii) There is no connection between the regulation and development 
of mines and minerals dealt with in the Central Acts and the levy and 
collection of land cess under ss. 78 and 79 of the Act. There is 
the

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