ULTRA TECH CEMENT LTD. versus STATE OF MAHARASHTRA & ANR.

Citation: [2011] 11 S.C.R. 613 · Decided: 27-09-2011 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

(2011) 11 S.C.R. 613 
ULTRA TECH CEMENT LTD. 
A 
(EARLIER ULTRATECH CEMCO LTD.) 
V. 
STATE OF MAHARASHTRA & ANR. 
(Civil Appeal No. 864 of. 2005) 
SEPTEMBER 27, 20·11 
B 
[R.V. RAVEENDRAN, A. K. PATNAIK AND SUDHANSU 
JYOTI MUKHOPADHAYA, JJ.] 
MINERAL CONCESSION RULES, 1961: 
c 
r. 27 (1) (d) - Mining lease ...; Lessee from the State 
Government - Demand for Zilla Parishad Gess (ZP cess) and 
Gram Panchayat Gess (GP cess) - Held: Where a particular 
cess is /eviab/e under an enactment, and the contract says 
that the lessee is liable to pay such cess leviab/e under that D 
enactment, but the enactment exempted a specified class of 
persons (to which the lessee belongs) from paying the said 
cess, the State Government cannot make the lessee liable 
to pay the said cess on the ground that under the contract 
entered under a different eneactment, the lessee is liable to 
E 
pay such cess - In the instant case, since the assessee being 
a lessee from the Government is by virtue of s. 151 of Zita 
Parishads and Panchayat Samitis Act, 1961 is exempt from 
paying GP cess under the Act, cess cannot be levied in terms 
of a contract- Similarly, as the lessee is, under clause V/1(1) 
F 
of the /ease deed, exempt from land revenue, it is not liable 
to pay GP cess - Thus, the lessee is not liable to pay ZP cess 
or GP cess to the State Government under the lease deed -
However, it is made clear that if ZP cess and GP cess become 
payable by the assessee by virtue of any amendment to the 
G 
provisions of the respective enactments under which such 
cesses are leviable, then the lessee may have to pay the 
same - Maharashtra Zita Parishads and Panchayat Samitis 
Act, 1961 - s. 151(1) - Bombay Gram Panchayats Act, 1958 
613 
H 
614 
SUPREME COURT REPORTS 
[2011] 11 S.C.R. 
A - s. 127 (1) - Maharashtra Land Revenue Code, 1966 - s. 
64. 
WORDS AND PHRASES: 
Expression 'assessable' and 'cess assessable on land' 
8 - Explained. 
The appellant, under the lease deed dated 12.2.1980, 
was granted a lease by the State Government for mining 
limestone. It approached the High Court challenging the 
demand for payment of Zila Parishad Cess (ZP cess) and 
c Gram Panchayat. Cess (GP cess) on the ground that s. 
151 (1) of the Maharashtra Zilla Parishads and Panchayat 
Samitis Act, 1961 exempted the lessees from the State 
Government from payment of ZP cess and as per s. 64 
of the Maharashtra Land Revenue Code, 1966, read with 
0 Clause Vll(1) of the lease deed, it was not liable to pay 
the GP cess also. The High Court declined to interfere. 
Allowing the appeal, the Court 
HELD: 1.1 Where a particular cess is leviable under 
an enactment, and the contract says that the lessee is 
E liable to pay such cess leviable under that enactment, but 
the enactment exempted a specified.class of persons (to 
which the lessee belongs) from paying the said cess, the 
State Government cannot make the lessee liable to pay 
the said cess on the ground that under the contract 
F entered under a different enactment, the lessee is liable 
to pay such cess. [para 7] [621-E·F] 
1.2 It Is evident from the provision of s.151 (1) of the 
Maharashtra Zilla Parishads Act that a 'lessee from the 
state government' is not liable to pay ZP cess under the 
G said provision. The ZP cess can be levied only in terms 
of and under the Zilla Parishads Act and cannot be levied 
by the State Government, under the "terms of a contract. 
[para 7) [621-D] 
H 
1.3 It is significant to note that the State Government 
ULIKA lt:t;H t;t:MENT LTD. (EARLIER ULTRATECH CEMCO 615 
LTD.) v. STATE OF MAHARASHTRA 
has stipulated in the lease that the mining lessee shall A 
pay ZP cess assessable on the land. It has not used the 
words 'an amount equivalent to ZP cess that could be or 
may be assessed on the land.' The word 'assessable' 
means liable to be assessed. The effect of clause V(4) of 
the lease deed providing that the mining lessee shall pay B 
'ZP cess assessable on the land' is this: if it is liable to 
be paid under the Zilla Parishads Act, that should be paid 
by the lessee and payment thereof is a term of the lease; 
and if the lessee is not liable to pay ZP cess in view of 
the exemption under the ZP Act, it is not payable. [para 6 c 
and 8) [620-E; 622-C) 
1.4 There is yet another indication that what is 
required to be paid is ZP cess, only if it is leviable under 
Zilla Parishads Act. Clause V(4) provides that the mining 
lessee shall pay "cesses assessable on the land (ZP and
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