Centre files curative plea against SC ruling on states' power to tax mines

Centre has filed a curative plea in SC challenging the nine-judge verdict that upheld states' powers to tax mineral rights, after earlier bids to limit or review the ruling were rejected

The Union government has filed a curative petition in the Supreme Court challenging last year’s nine-judge bench ruling that affirmed the states’ authority to impose taxes on mining rights and mineral-bearing lands.

  In July 2024, the eight-judge majority affirmed that states have the authority to levy taxes on mineral rights and would not be limited by the Mines and Minerals (Development and Regulation) Act 1957 (MMDR Act). The bench concluded that royalties and dead rent did not fulfil the characteristics of a tax, therefore, did not come under the MMDR Act.

 

The matter was referred to the nine-judge bench in 2011 due to perceived conflicts in previous judgments by five-judge and seven-judge benches in related cases.

   

The court said that royalty payments under the Mines and Minerals (Development and Regulation) Act, 1957, were not in the nature of a tax, and that the power to levy tax on mineral rights rested with state legislatures. A subsequent plea by the Centre seeking to restrict the effect of that ruling to future cases was rejected in August 2024. The court, however, clarified that while states could recover past dues, the claims could not go back earlier than April 1, 2005, and permitted staggered payments by assessees over a 12-year period beginning April 2026. The Union’s review petition against the verdict was dismissed in October 2024.

 

On Thursday, Solicitor General Tushar Mehta informed a bench led by Chief Justice Surya Kant and Justice Joymalya Bagchi that a curative petition has now been filed. He made the submission in response to a counsel’s mention seeking an early hearing of more than 80 pending appeals that were remitted to regular benches after the larger bench’s decision.

 

The solicitor general suggested that the curative petition be heard first. The CJI indicated the matter could be taken up in January 2026.

 

The nine-judge bench that delivered the July 2024 judgment was headed by then Chief Justice D Y Chandrachud and included Justices Hrishikesh Roy, Abhay S Oka, B V Nagarathna, J B Pardiwala, Manoj Misra, Ujjal Bhuyan, S C Sharma, and A G Masih. Justice Nagarathna authored the sole dissent.

 

The majority held that royalty payable under Section 9 of the MMDR Act is a contractual consideration for extraction rights and not a statutory levy in the nature of tax. It reasoned that royalty arises from the lessee-lessor relationship over mineral land, while taxation is a sovereign act for public purposes. Accordingly, the ruling confirmed that state legislatures are competent to impose taxes on mineral rights in addition to royalties prescribed under the central law.

 

Curative petitions are the final remedy where the SC can reconsider a dismissed review petition.