SOUTH EASTERN COALFIELDS LIMITED ETC. ETC. versus CENTURY TEXTILES AND INDUSTRY LTD. AND ORS

Citation: [1991] 2 S.C.R. 188 · Decided: 04-04-1991 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Disposed off
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A 
SOUTH EASTERN COALFIELDS LIMITED ETC. ETC. 
v. 
CENTURY TEXTILES AND INDUSTRY LTD. AND ORS. 
APRIL 4, 1991 
B 
[S. RANGANATHAN AND N.M. KASLIWAL JJ.] 
c 
D 
E 
Constitution of India, 1950: Schedule VII List I Entry 54 and List II 
Entries 23, 49, 50 and 66--Mineral areas development-Cess imposi-
tion of-Competency of state Legislature to legislate. 
Articles 142, 246 and 265-Statute declaration of invalidity-
Refund-Whether automatic and inevitable consequence. 
Madhya Pradesh Karadhan Adhiniyam 1982/Madhya Pradesh 
Areas Development Cess Rules 1982-Ss. 8, 9/Rule JO-Mineral Areas 
development-Cess-1mposition of. 
The levy of cess under the Madhya Pradesh Karadhan A.dhini-
yam 1982 is not a valid levy has been held by the Madhya Pradesh High 
Court in Hirata! v. State of M.P., 1986 MPL J/514 and this has been 
confirmed by this Court in its judgment dated April 4, 1991 in the 
appeal preferred by the State of Madhya Pradesh. 
Despite the judgment of the High Court the amounts collected 
from various assessees had not be refunded. The State was continuing 
to collect the cess on the strength of interim orders in an appeal filed in 
this Court. 
F 
The State Government and the Coalfields concerned preferred 
petitions for leave to appeal to this Court. 
Disposing of the appeals, this Court, 
Held: (l) The collection of any cess under the Madhya Pradesh 
G 
Karadhan Adhiniyam 1982 subsequent to the date of the judgment of 
the Madhya Pradesh High Court in Hirala/'s case 1986 MPLJS14 can-
not be upheld. [ l90D I 
(2) The respondents will not be entitled to the refund of any cess 
paid or coUected prior to the date of said judgment. They would, how-
H 
ever, be entitled to the refund of the amounts collected subsequent to 
.. 
-; 
/· 
COALflELDS 1·. CENTURY TEXTILES [RANGANATllAN . .I [ 
189 
that date from the Coalfields or the State, as the case may be, along-
with the interest in cases where there is an interim direction or under-
taking to pay such interest at the dates specified in such direction or 
undertaking. [ 190E) 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 550 I 
of 1990 etc. etc. 
From the Judgment and Order dated 22.8. 1990 of the Madhya 
Pradesh High Court in Misc. P. N. 845 of 1990. 
R.B. Datar, Satish Agnihotri, P.S. Nair, T.G.N. Nair and Shri 
Narain for the Appellant. 
R.F. Nariman, Abbay Sapre, Sandeep Narain and S.K. 
Agnihotri for the Respondents. 
The Judgment of the Court was delivered by 
RANGANATHAN, J. These Civil Appeals and SLPs raise the 
same issues as have been dealt by us in our judgment of even date in 
· Civil Appeal No. 1640 to 1662 of 1986 and connected cases. They arise 
in the following circumstances. 
A 
B 
c 
D 
In the connected judgment referred to above we have held that 
E 
the levy of cess under the Madhya Pradesh Karadhan Adhiniyam, 1982 
(Act 15 of 1982) is not a valid levy, In fact it had been so held by the 
Madhya Pradesh High Court in Hiralal v. State of M.P., [1986) MPLJ 
514. The appeal preferred by the State of Madhya Pradesh has been 
disposed of by us in the connected batch of cases above referred t,o. 
Despite the judgment of the High Court the amounts collected 
from various assessees had not been refunded; on the contrary, .the 
State appears to have continued collecting the cess apparently on the 
strength of the interim orders obtained in one of the above appeals viz . 
F 
., 
C.A. No. 1649/86 though, as pointed out by us in the connected judg-
ment no such modification seems to have been ordered by this Court G 
of the initial orderof 2.5.86. 
In April/May, 1990, some of the assessees filed writ petitions in 
the High Court challenging the continued recovery of the cess and 
asking for the refund of amounts already collected. The respondents 
brought to the notice of the Court the orders of this Court in the 
H 
190 
SUPREME COURT REPORTS 
[1991) 2 S.C.R. 
A earlier matter and ·pleaded that since the collections were being made 
in pursuance of the orders of this Court the writ petitions could not be 
entertained. The High Court rejected the respondent's plea and al-
lowed the writ petitions. The Coalfields concerned and the State Gov-
ernm1:nt have preferred petitions for leave to appeal from the order 
B 
c 
D 
dated 28.7.90 and 22.8.90 in these cases. In one set of these appeals 
leave has been granted by us earlier: C.A. Nos. 5501and5502 of 1990. 
The other SLPs had been listed before us subsequent to our hearing 
the main appeals and it was agreed t
Excerpt shown. Read the full judgment & AI analysis in Lexace.