LexRAOJIBHAI JIVABHAI PATEL AND ORS. ETC. ETC. versus STATE OF GUJARAT AND ORS. ETC. ETC.
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A RAOJIBHAI JIVABHAI PATEL AND ORS. ETC. ETC. v. STATE OF GUJARAT AND ORS. ETC. ETC. DECEMBER 7, 1989 B [E.S. VENKATARAMIAH, CJ. K.N. SINGH, AND c D E F G H N.M. KASLIWAL, JJ.] Mines and Minerals (Regulation and Development) Act 1957/ Gujarat Minor Minerals Rules, 1966: Section 15/Rule 21-Royalty- Levy of by State Government on minor minerals validity of. The Petitioners in these petitions have challenged the validity of a Notification issued by the Government of Gujarat on June 25, 1985 whereby the Gujarat Minor Mineral Rules were amended with effect from I.7.1985. By the said notification, original Rule 21 of the Rules was substituted hy a new Rule 21 which provided that a holder of a quarry lease or any other mineral concession granted under the Rules shall pay royalty in respect of minor minerals provided in .:olumn 2 of the Schedule. It is under this Notification that the rate of royalty in respect of Black trap and Hard Murrum was increased from Rs.4 to Rs. 7 per metric tonne. The validity of Rule 21 as it stood prior to its amendment by the aforesaid impugned notification was considered and upheld by this Court on March 6, 1986 in D.K. Trivedi & Sons & Ors. v. State of' Gujarat & Ors., [1986] I SCR 479. The impugned notification was issued at a time when the Writ Petitions in the aforesaid case were pending in the High Court. The increase in the levy of royalty effected by the impugned notification is now questioned in these petitions. The Petitioners raised the following contentions viz; ( l) That the royalty levied and covered under the Rules should be applied only for mineral development and since the royalty is being treated as part of the consolidated fund of the State and used for other 1 purposes by the State, the levy was bad; and (2) That the impugned notification in question was in contraven- tion of clause (c) of Art. 304 of the constitution. - (3) That the impugned notificatii.11 is discriminatory in character. 406 R.J. PATEL v. STATE OF GUJARAT 407 Dismissing the Writ Petitions, this Conrt, HELD: That Act is no doubt passed for development of minerals but while discharging its functions relating to development, if the State incidentally allows mining to be carried on in the public interest and levies in that connection a tax, it does not mean that the said tax should A be used only for development of minerals and not for other purposes B sanctioned by law. [412B] The India Cement Ltd. etc. v. The State of Tamil Nade etc., [1989] 4 SC-Judgment Today 190. No restriction is being imposed on the freedom of trade of the petitioners by the levy of royalty. The minerals belong to the Govern- ment and if anybody wants to have the right as a lessee to exploit the mines to the exclusion of others and to remove the minerals with a view to making profit, he has to pay a royalty imposed in accordance with law. l412E] In the instant case, the levy is made under a law made by the Central Government. It is not an imposition made by a law made by the State Legislature on which alone, the restriction contemplated under Art. 304(b) applies. [412F] c D If the Executive or the administrative authority acts in an E arbitrary manner, its action would be bad in law and liable to be struck down by the Courts but the possibility of abuse of power or arbitrary exercise of power cannot invalidate the statute conferring the power or the power which has been conferred by it. l413B-C] Since the power exercised is legislative in character, the authority F which is exercising the said power has the power to make Rules equit- able by necessary implication. No express power need be conferred on such subordinate authority in order to make a classification for purposes of implementing the policy of the Act under which the Rules are made. l4ISG) ORIGINAL JURISDICTION: Writ Petition (Civil) Nos. 12676-77 of 1985 etc. etc. (Under Article 32 of the Constitution of India) G _R.F. Nariman, P.H. Parekh, N.N. Keshwani, Mrs. H. Wahi H and R.N. Keshwani for the Petitioners. A B c D E F 408 SUPREME COURT REPORTS I 1989] Supp. 2 S.C.R. G.A. Shah, M.N. Shroff, K.M.M. Khan and T.U. Mehta for the Respondents. The Judgment of the Court was delivered by VENKAT ARAMIAH, CJ. The petitioners in these petitions have questioned the validity of a notification issued by the Govern- ment of Gujarat on June 26, 1985 in exercise of its powers conferred by Section
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