ORISSA CEMENT LTD AND ORS. ETC. ETC versus STATE OF ORISSA AND ORS. ETC. ETC.

Citation: [1991] 2 S.C.R. 105 · Decided: 04-04-1991 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Disposed off

Cited by 8 judgment(s) · cites 28 · see the full citation network in Lexace

Judgment (excerpt)

-\. 
ORISSA CEMENT LTD AND ORS. ETC. ETC. 
v. 
STATE OF ORISSA AND ORS. ETC. ETC. 
APRIL 4, 1991 
[S. RANGANATHAN, N.M. KASLIWAL AND 
S.C. AGRAWAL, JJ.] 
Orissa Cess Act, 1962: Sections 5-7-Constitutional validity of. 
Orissa Cess Rules, 1963: Rule 6A. 
Bengal Cess Act (Act IX of 1880) (As applicable to State of 
Bihar): Sections 4, 5, 6 and 9-Constitutional validity of. 
Madhya Pradesh Upkar Adhiniyam, 1981: Part IV-Section 11-
Constitutional validity of. 
Madhya Pradesh Karadhan Adhiniyam 1982: Part IV-Section 
A 
B 
c 
9-Constitutional validity of. 
D 
Madhya Pradesh Mineral Areas Development Cess Rules, 1982: 
Rule 3 and JO. 
Land Cess-Levy of cess based on royalty derived from mining 
lands-Nature, c~aracter and validity of-State Legislatures-Legisla-
tive competence of-Whether denuded by enactment of Mines and 
E 
Minerals (Regulation and Development) Act, 1957. 
'Royalty'-Whether tax. 
'Land Revenue'-Connotation of. 
Constitution of India, 1950: Seventh Schedule-List I Entries 52 
and 54-List II Entries 5, 18, 23, 45, 49, 50 and 66-State Law-
Central Law-Doctrine of occupied field-State Act encroaching field 
occupied by Central Act-Effect of. 
F 
Articles 142, 246 and 265-Cess-Constitutional invalidity-
Consequences of-Refund of cess whether automatic and inevitable 
consequence-Declaration of invalidity and determination of relief in 
G 
consequence whether two different things-Relief whether discretion of 
Court-Power of Court to mould or restrict the relief-Doctrine of pro-
spective overruling and doctrine of unjust enrichment-Applicability of. 
Article 277;_Essential requirements of the Article-Discussed. 
Practice and Procedure: Undertaking given by "the parties-
H 
105 
106 
SUPREME COURT REPORTS 
I 1991] 2 S.C.R. 
A directions given by Supreme Court-Effect of. 
The States of Orissa, Bihar and Madhya Pradesh levied a cess 
which was based on the royalty derived from mining lands. The cess 
was levied by these States under their respective statutes viz. Orissa 
Cess Act, 1962, Bengal Cess Act, 1880 (as applicable to the State of 
B 
Bihar), Madhya Pradesh Upkar Adhiniyam 1981 and Madhya Pradesh 
Karadhan Adhiniyam, 1982. 
The assessees challenged the constitutional validity of the cess by 
filing various petitions in the High Conrts of Orissa, Bihar and Madhya 
Pradesh. The High Court of Orissa declared the cess unconstitutional 
C 
on the ground that it was beyond the legislative competence of the State 
Legislatures, but rejected the prayer of the assessees for a direction to 
the State to grant refund of the cess collected from the assessees. 
Against the decision of the Orissa High Court the assessees have ftlecl 
appeal in this Court whereas the State of Orissa bas filed a cross. 
appeal. The High Court of Madhya Pradesh also declared the levy of 
D 
cess unconstitutional on the ground that it was beyond the legislative 
competence of the State legislature. Against the decision of the Madhya 
Pradesh High Court the State of Madhya Pradesh has filed an appeal in 
this Court. On the other hand the High Court of Patna dismissed the 
writ petition of the assessee. Against the decision of the Patna High 
Court the assessee has filed an appeal in this Court. 
E 
In appeal to this court, it was contended on behalf of the State of 
Orissa; that (i) the levy of cess being referable to Entries 45, 49 and 50 
of the State List of the Seventh Schedule of the Constitution the 
impugned legislation was within the legislative competence of the State 
legislature; (ii) the limitations imposed in the statute on the modes of 
F 
utilisation of cess supports a view that the cess i~ fee on which the State 
legislature is competent to legislate under Entry 23 read with Entry 66 
of the State List; (iii) since the impugned Act was concerned with the 
raising of funds to enable panchayats and Samitbis to discharge their 
responsibilities of local administration and take steps for proper 
development of the area under their jurisdiction, the impugned legisla-
G 
tion was referable to Entry 5 of State List; and (iv) the enactment of the 
Central Legislation viz. Mines and Minerals (Regulation and Develop-
ment) Act, 1957 bas not denuded the State legislature of its competence 
to enact the impugned legislation since the scope and subject matter of 
the two legislations are entirely different and the impugned State Legis-
lation does not encroach upon the field covered by the Central Legisla-
H 
tion i.e. 1957 Act. 
.I 
ORIS

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