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Supreme Court Upholds Power Of States To Levy Tax On Mineral-Bearing Lands
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By an 8-1 judgment, the top court also declared that royalty charged on mining is not a tax, but a form of contractual payment made by the minors to the Centre for extraction of minerals.
Therefore, the bench, headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud, held that states were well within their rights to impose extra levy and surcharge on such mineral rights.
At the same time, the majority judgment clarified that the central government has the right under the Union List to impose limitations, including a prohibition, on the states’ power to tax mineral rights through a parliamentary law.