Centre files curative plea in SC over states' right to levy mining cess

The Centre has approached the Supreme Court with a curative plea against the ruling that allowed states to levy a cess on mining lands, warning of international implications and strain on the federal

The Centre on Thursday moved the Supreme Court, challenging its earlier ruling that upheld states' power to levy taxes on mining and related activities. It requested an early listing of the curative petition, citing “international ramifications” and impact on the “federal structure”, reported Bar and Bench.

 

Solicitor General Tushar Mehta mentioned the matter before a Bench of Chief Justice Surya Kant and Justice Joymalya Bagchi, stating: “It is about the distribution of royalty on minerals and every state having the right to decide so. We have moved a curative because every state will have different mineral prices... it has international ramifications. This affects the federal structure.”

 

The Union government’s step comes after the top court last year rejected the Centre’s review petition against an earlier ruling.

 

What did the Supreme Court say?

CJI Kant said he would take a decision on the listing of the plea, adding that he had planned to commence hearings by nine-judge Constitution Benches from January 2026, though the proposal has not yet been discussed with other judges, reported Bar and Bench.

 

What is the case about?

On July 25, 2024, the top court had upheld state governments’ rights to levy a cess on mining lands and quarries while ruling that the royalty paid by mining operators to the Centre was not a tax. Later, a nine-judge Constitution Bench headed by former CJI D Y Chandrachud decided that the judgment would apply retrospectively, although the Centre had pleaded for a prospective implementation.

 

However, in some relief to the mining industry, the court stated that the payment of the cess would be staggered in instalments over 12 years starting April 1, 2026.

 

How does the earlier ruling help states?

The verdict, seen as a major boost for mineral-rich states, held that Parliament does not have the legislative competence to tax mineral rights under Entry 54 of List I of the Constitution, which deals with the Centre’s power to regulate mines and mineral development, reported PTI. The ruling was a setback for the Centre, though it clarified that Parliament could still frame laws imposing “any limitations” on states’ power to levy tax on mineral rights, the report added.

 

On Thursday, the Bench was also informed that following the nine-judge Bench ruling, several individual petitions filed by different states are still awaiting listing for adjudication, PTI reported.

 

Mehta, however, opposed the submission, stating that the Centre has filed a curative petition against the judgment, and these individual matters can only be taken up once the curative plea is decided. “Whether we win or lose… Everything will depend on the outcome of the curative petition,” he said, as quoted by PTI.