Miners relieved as HC stays Odisha stamp duty order

The HC stayed operations of Indian Stamp (Odisha amendment) Act 2013 and consequential actions taken thereafter

In a major blow to the state government, the Odisha High Court, in its interim order, has stayed the operations of the Indian Stamp (Odisha amendment) Act, 2013, and the consequential actions taken thereafter.

This has brought cheers to scores of mine owners, who had gone to the court challenging the state government’s recent order asking the miners, who were running their mines under deemed extension (a provision allowing them to operate after the expiry of the lease period), to pay the stamp duty at revised rate by July 9 or face closure.  

“The division bench, consisting of Chief Justice C Nagappan and Justice I Mohanty, has passed the interim order staying the operations of the act, the rules and all the circulars, especially, the circular letter dated July 3, 2013,  directing the subordinate officials to stop mining operation if the revised stamp duty is not paid by July 9,” said VVS Rao, counsel for a Kolkata based miner.

“Prima facie, the HC has come to the conclusion that the state act is quite repugnant to the Stamp Act and also encroaches into the Mines and Minerals. (Development and Regulation) Act, 1957,” he added.

After listening to the arguments of both sides, the court felt that the matter deserves to be judicially reviewed and stayed the operations of the act and the consequential actions which has been taken so far, said Gopal Subramaniam, counsel representing some of the companies.

The HC has also directed the state government to file its counter in four weeks time.

Out of total 600 mines in the state, applications for lease renewal of 329 mines are now pending for disposal. Of them, 59 mines are running under deemed extension provision of Mineral Concession Rule.

As many as 37 miners, affected by the state government’s new stamp duty order had approached the court for relief. They had prayed for annulment of the Indian Stamp (Odisha Amendment) Act, 2013, which allowed the Odisha government to collect stamp duty on lapsed mining leases operating under deemed extension at an enhanced rate.

As per the amended act, a miner who has applied for renewal of lease for 20 years has to pay about Rs 140 crore as stamp duty for lifting each million tonne of iron ore. According to Prabodh Mohanty, spokesperson of East Zone Miners association, the total levy burden on the miners, if the order was implemented, would have come to about Rs 50,000 crore.

Those who had filed cases in the court included public sector undertakings such as Steel Authority of India Ltd and Mahanadi Coalfields, a Coal India subsidiary. They were joined by big private miners like Tata Steel, Essel Mining, Rungta Mines, KJS Ahluwalia, Jindal group and mining lobby body Federation of Indian Mineral Industries (Fimi).