Why taxing mining companies retrospectively is a retrogressive step

States would do well to exercise the discretion that the Supreme Court has given them to leaven the impact of a judgment that benefits them immensely

With its judgment upholding the states’ powers to tax mineral rights but with retrospective effect from April 1, 2005, the Supreme Court has simultaneously strengthened the principles of fiscal federalism but imposed heavy financial liabilities on mining companies. The July 25 ruling, by a nine-judge Bench headed by the chief justice of India, would have ended a 35-year-old saga involving over 80 petitions, were it not for a ruling on August 14 turning down the Centre’s and mining companies’ submission for prospective application to prevent financial chaos. According to the industry, private and public-sector miners could take