Odisha HC to hear miners' plea on stamp duty

Levy burden on miners pegged at Rs 50,000 crore if govt order implemented

The miners have prayed to the court to quash the Indian Stamp (Odisha Amendment) Act, 2013, which allows the Odisha government to collect stamp duty on lapsed mining leases

A swarm of petitions filed in the state high court challenging the state government’s order to shut down 57 iron ore, manganese, coal, chromite and bauxite mines over non-payment of stamp duty is set to come up for hearing on Tuesday.

“About 15 miners filed writs today and another 15 are likely to file by the end of the day. All cases are listed to be heard on Tuesday,” said Aditya Das, a counselor representing some of the companies.

Those who have approached the court include public sector undertakings such as Steel Authority of India Ltd and Mahanadi Coalfields, a Coal India subsidiary. They are joined by big private miners like Tata Steel, EMIL, Rungta Mines, Jindal group and mining lobby body Federation of Indian Mineral Industries (Fimi).

They have prayed the court to quash the Indian Stamp (Odisha Amendment) Act, 2013, which allows the Odisha government to collect stamp duty on lapsed mining leases, currently operating under the deemed extension clause of the Mining Concession Rule, 1960.

Armed with this amended Act, the government had asked the miners to deposit the stamp duty due by July 9, failing which their mines would be shut down.  

According to Prabodh Mohanty, spokesperson of East Zone Miners association, the total levy burden on the miners, if the order is implemented, would come to about Rs 50,000 crore.

“Neither the Mines and Minerals Development and Regulation (MMDR) Act nor the Mineral Concession Rule (MCR) has any provision for forcible closure of mines for non-payment of stamp duty. Even the amended stamp duty act of the government does not prescribe for such action. At best, the government can collect the dues as arrears under Odisha Public Demand Recovery (OPDR) Act in case of non-payment”, said a miner who has filed a case.

Mine owners argue that it is wrong to collect stamp duty on lapsed mining leases when the applications for lease renewal are pending before the government. “The stamp duty is collected on an instrument. When the lease agreement has not been renewed, how can the government ask for stamp duty. This is unconstitutional apart from the unreasonable high rate fixed for stamp duty,” said R K Sharma, director general of Fimi.

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. “This is about seven times of what is being collected in Goa”, pointed out an aggrieved mine owner.

The Odisha government had effected changes to the Act in April this year, with the idea that while miners were able to excavate minerals without renewal of lease because of the deemed extension clause, the state government was not getting revenue towards stamp duties, sometimes for decades, due to the notoriously slow process of forest department clearances required for lease renewal.