LexINDIA CEMENT LTD. versus STATE OF TAMIL NADU ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A INDIA CEMENT LTD. v. STATE OF TAMIL NADU ETC. OCTOBER 25, 1989 B [E.S. VENKATARAMIAH, CJ, SABYASACHI MUKHARJI, c I D E RANGANATH MISRA, G.L. OZA, ·B.C. RAY, K.N. SINGH AND S. NATARAJAN, JJ.] Madras Panchayats Act, 1958: Sections 115 and 116---Mining lease-Levy of cess on royalty-Held ultra vires. Constitution of India, 1950: Stventh Schedule List II-Entries 23, 49 & 50--Levy of cess on royalty in respect of mining lease- Sections 115 & 116 of Madras Panchayats Act 1958-Held illegal and ultra vi res. Mineral Concession Rules, 1960: Levy of cess in respect of min- ing leases-Sections 115 and 116 Madras Panchayats Act 1958-Held illegal and ultra vires. The appellant company nsed to manufacture cement and was granted mining lease for limestone and kankar by the Government of Tamil Nadu in accordance with the Mineral Concession Rules, 1960. The royalty was fixed under the Mines and Minerals (Regulation & Development) Act, 1957 which is a Central Act by which the control of mines and minerals had been taken over by the Central Government for the regulation and development of minerals. F Suh-section 1 of section 115 of the Madras Panchayats Act, 1958 enjoins that there shall be levied in every panchayat development block, .. - a local cess at the rate of 45 paise on every rupee of land revenue payable to the Government in respect of any land for every fasli. An explanation. to the said section was added, and was deemed always to have been incorporated by the Tamil Nadu Panchayats (Amendment G and Miscellaneons Provisions) Act, 1964. In this explanation a fiction was created whereby even the royalty payable had been included within the definition of "land revenue". The appellant filed a writ petition in the High Court challenging the competence of the State legislature to levy cess on royalty. A learned H Single_ Judge dismissed the writ petition holding that the cess levied 692 .. • - • INDIA CEMENT v. STATE OF TAMIL NADU 693 under section 115 of the Madras panchayats Act was a tax on land and, A as snch, fell nnder Entry 49 of the State List of Schednle VII of the Constitution. The Division Bench dismissed the appellant's appeal and held that local cess authorised by section 115 was not land revenne but was a charge on the land itself, and section 115 merely quantified the basis of the quantum of land revenue. The learned Single Judge, as well as the Division Bench, relied on the decision of this Court in H. R. S. B Murthy v. Collector of Chittoor, [1964] 6 SCR 666. Before this Court, it was contended on behalf of the appellant that the levy of cess on royalty in this case was nothing but a tax on royalty and was therefo~e ultra vires the State legislature. On the other hand, it was contended that the cess in the present case was a levy in respect of land and could be justified or sustained either under entry 49, 50 or 45 C of List II of the 7th Schedule to the Constitution. It was further submit- ted that the cess having been realised on the basis of the decision of this Court in "H.R.S. Murthy" case, if at all, the Court shall declare the said cess on royalty to be ultra vires prospectively. Allowing the appeal, this Court, HELD: (E.S. Venkataramiah, CJ, Sabyasachi Mukharji, Ranga- nath Misra,· B.C. Ray, K.N. Singh and S. Natarajan, JJ.-per Sabyasachi Mukharji, J.) D E (1) Conrts of law are enjoined to gather the meaning of the Con- stitution from the language used, and although one shonld interpret the words of the Constitution on the same principles of interpretation as one applied to an ordinary law but these very principles of interpreta- tion compel one to take into account the nature and scope of the Act which requires interpretation. It has to be remembered that it is· a F Constitution that requires interpretation. Constitution is the mecha- nism under which the laws are to be made and not merely an Act which declares what the law is to be. [704B-C] The Attorney General for the State of New South Wales v. The Brewery Employees Union of New South Wales, [1908] 6 CLR 469, G referred to . (2) A Constitution must not be construed in any narrow or pedantic sense, and construction most beneficial to the widest possible amplitude of its powers, must be adopted. A broad and liberal spirit should inspi!"e those whose duty it is to interp~et the Constitution, but H A B c D E F G H 694 SUPREME COURT REPORTS [1989] Supp. 1 S.C.R.
Excerpt shown. Read the full judgment & AI analysis in Lexace.