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Tata Steel Limited Through Its Chief Legal and Compliance Mrs Meena Lall Vs. Union of India Through the Secretary Ministry of Coal and Ors - Court Judgment

LegalCrystal Citation
CourtJharkhand High Court
Decided On
AppellantTata Steel Limited Through Its Chief Legal and Compliance Mrs Meena Lall
RespondentUnion of India Through the Secretary Ministry of Coal and Ors
Excerpt:
1 in the high court of jharkhand at ranchi w.p. (c) no. 2176 of 2015 with w.p. (c) no. 2184 of 2015 with w.p. (c) no. 2185 of 2015 in w.p. (c) no. 2176 of 2015) & (in w.p. (c) no. 2184 of 2015 tata steel limited. … … petitioner versus 1. union of india, through the secretary, ministry of coal, new delhi.2. the secretary, ministry of mines, government of india, new delhi.3. the state of jharkhand, through the chief secretary, ranchi.4. the secretary, department of mines & geology, government of jharkhand, ranchi.5. assistant mining officer, ramgarh.6. district mining officer, ramgarh. … … respondents in w.p. (c) no. 2185 of 2015 tata steel limited. … … petitioner versus 1. union of india, through the secretary, ministry of coal, new delhi.2. the secretary, ministry of mines,.....
Judgment:

1 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (C) No. 2176 of 2015 With W.P. (C) No. 2184 of 2015 With W.P. (C) No. 2185 of 2015 In W.P. (C) No. 2176 of 2015) & (In W.P. (C) No. 2184 of 2015 Tata Steel Limited. … … Petitioner Versus 1. Union of India, Through the Secretary, Ministry of Coal, New Delhi.

2. The Secretary, Ministry of Mines, Government of India, New Delhi.

3. The State of Jharkhand, Through the Chief Secretary, Ranchi.

4. The Secretary, Department of Mines & Geology, Government of Jharkhand, Ranchi.

5. Assistant Mining Officer, Ramgarh.

6. District Mining Officer, Ramgarh. … … Respondents In W.P. (C) No. 2185 of 2015 Tata Steel Limited. … … Petitioner Versus 1. Union of India, Through the Secretary, Ministry of Coal, New Delhi.

2. The Secretary, Ministry of Mines, Government of India, New Delhi.

3. The State of Jharkhand, Through the Chief Secretary, Ranchi.

4. The Secretary, Department of Mines & Geology, Government of Jharkhand, Ranchi.

5. Assistant Mining Officer, Dhanbad.

6. District Mining Officer, Dhanbad. … … Respondents -------- CORAM : HON’BLE MR. JUSTICE H.C. MISHRA HON’BLE MR. JUSTICE PRAMATH PATNAIK HON’BLE MR. JUSTICE Dr. S.N. PATHAK -------- For the Petitioner : M/s. Abhishek Manu Singhvi, Sr. Advocate Punit D. Tyagi, Advocate Amit Bhandari, Advocate Avirat Kumar, Advocate Indrajit Sinha, Advocate Ganesh Pathak, Advocate For the State : M/s. Ajit Kumar, Advocate General Kumar Sundaram, J.C. to A.G. Chanchal Jain, J.C. to A.G. Master Akash, J.C. to A.G. For the Union of India : M/s. Rajiv Sinha, A.S.G.I. Madan Prasad, C.G.S. Niraj Kumar -------- 2 C.A.V. on 14.12.2017 Pronounced on 10.01.2018 H.C. Mishra,J.:- Heard, Mr. Abhishek Manu Singhvi, learned Sr. Counsel for Tata Steel Limited, Mr. Ajit Kumar, learned Advocate General for the State of Jharkhand and Mr. Rajiv Sinha, learned Assistant Solicitor General of India, for the Union of India.

2. In all these writ applications the petitioner Tata Steel Limited, has challenged the vires of Rules 64-B and 64-C of the Mineral Concession Rules, 1960, praying for the following reliefs:- (i) An appropriate writ, order or direction declaring Rules 64-B and 64-C of the Mineral Concession Rules, 1960 as unconstitutional and ultra vires Section 9 of the Mines and Mineral (Development & Regulation) Act, 1957; (ii) An appropriate writ, order or direction declaring Rules 64-B and 64-C of the Mineral Concession Rules, 1960 as ultra vires Section 13 of the Mines and Mineral (Development & Regulation) Act, 1957; (iii) An appropriate writ, order or direction declaring Rules 64-B and 64-C of the Mineral Concession Rules, 1960 as discriminatory and in violation of Article 14 of the Constitution of India for creating artificial classification not based on any intelligible differentia by providing differential treatment in levy of royalty between coal put through a washing process within the leased area and coal put through a washing process outside the leased area; (iv) A further writ, order or direction declaring that charging of royalty on “processed mineral” as contemplated by Rule 64-B of the Mineral Concession Rules, 1960 is beyond the ambit and purview of Section 9 of the Mines and Minerals (Development & Regulation) Act, 1957 and ultra vires and unenforceable; (v) A further writ, order or direction declaring that charging of royalty on “sale of processed mineral” as contemplated by Rule 64-C of the Mineral Concession Rules, 1960 is beyond the ambit and purview of Section 9 of the Mines and Minerals (Development & Regulation) Act, 1957 and ultra vires and unenforceable; (vi) In the alternative to prayer (iv) and (v), an appropriate writ, order or direction declaring that, in any event, Rules 64-B and 64-C of the Mineral Concession Rules, 1960 inserted by the Central Government, Ministry of Mines have no applicability to hydrocarbons such as coal and lignite. Apart from the aforementioned main reliefs in all these writ applications, the petitioner Tata Steel Limited has also challenged the various demand notices issued by the District Mining Officer, Hazaribag / Ramgarh / Dhanbad, raising demands of additional royalty in accordance with Rules 64-B and 64-C of the Mineral Concession Rules, 1960.

3. The petitioner Tata Steel limited is a Company incorporated under the Companies Act and is engaged in manufacture of iron and steel having its steel plant at Jamshedpur, in the State of Jharkhand. The petitioner is having mining lease over two collieries in the Districts of Ramgarh and Dhanbad. In the District 3 of Ramgarh the collieries of the Tata Steel are “West Bokaro Colliery” whereas in the District of Dhanbad, it is having “Jharia group of collieries”. Admittedly both these group of collieries are the captive collieries of the Tata Steel limited, meaning thereby, that the coal extracted in these collieries are used after its necessary washing and beneficiation only for the purpose of the manufacture of steel at its steel plant at Jamshedpur, whereas the middlings, tailings, rejects, de-shale etc., generated during the washing process, are partly used as fuel in the petitioner’s own power plants situated within some of the collieries and partly sold to the consumer after obtaining necessary permission from the concerned authorities. It may be stated that the coal extracted directly from the mines are known as run-of-mines coal, or ROM coal, and we are informed that ROM coal may either be Washery Grade-IV Coal, or any of the higher grades, up to Steel Grade. We are also informed that in all the collieries of the petitioner Tata Steal Limited, the ROM coal extracted directly from the colliery are the Washery Grade-IV Coal and by the process of washing they are made Washery Grade-III Coal, Washery Grade-II Coal, Washery Grade-I Coal, Steel Grade-1I Coal, and ultimately Steel Grade-1 Coal. Steel Grade coal are used in the manufacture process of iron and steel. In the process of washing the middlings, tailings and rejects are also produced, which are used by the petitioner in its power plants situated in the collieries, and some of them are also sold to end users after obtaining permission from the concerned authority. The process of extracting coal from the mines creates the liability of making the payment of royalty to the State in view of Section 9 of the Mines and Mineral (Development and Regulation) Act, 1957 (hereinafter referred to as the "MMDR Act”) and Rules 64-B and 64-C of the Mineral Concession Rules, 1960. Section 9 of the MMDR Act reads as follows:- "9. Royalties in respect of mining leases.- (1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub- lessee from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub– lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral. (2-A) …………………… (3) ……………………" 4 Similarly Rules 64-B and 64-C of the Mineral Concession Rules, 1960 read as follows:- "64-B. Charging of royalty in case of minerals subjected to processing- (1) In case processing of run-of–mine is carried out within the leased area, then, royalty shall be chargeable on the processed mineral removed from the leased area. (2) In case run-of-mine mineral is removed from the leased area to a processing plant which is located outside the leased area, then, royalty shall be chargeable on the unprocessed run-of-mine mineral and not on the processed product. 64-C. Royalty on tailings or rejects. – On removal of tailings or rejects from the leased area for dumping and not for sale or consumption, outside leased area such tailings or rejects shall not be liable for payment of royalty; Provided that in case so dumped tailings or rejects are used for sale or consumption on any later date after the date of such dumping, then, such tailings or rejects shall be liable for payment of royalty. The Journey So Far 4. For the purpose of the present case the journey started with the filing of a writ application by the National Coal Development Corporation Limited (hereinafter referred to as the "NCDC”), a company wholly owned by the Government of India and carrying out extensive mining operations in coal throughout the Country. For carrying out of the mining operations, large number of workmen had been engaged and it was customary in the mining industry that such workers within the mining area drew coal for their own domestic consumption also on which no royalty was paid by the company, or charged by the States. Sometimes around the year 1970, the Mining Officer of Talcher Circle started initiating proceedings under the Orissa Public Demands Recovery Act for realization of the arrears of royalty on coal consumed by the workmen. The petitioner NCDC disputed the maintainability of the certificate proceedings before the Orissa High Court and the Hon’ble Orissa High Court in National Coal Development Corporation Ltd. Vs. State of Orissa and Ors., reported in AIR1976Ori 159, held as follows :- “Removal from the seam in the mine and extracting the same through the pit’s mouth to the surface satisfy the requirement of Section 9 in order to give rise to liability for royalty.” This decision of the Orissa High Court was upheld by the Hon’ble Supreme Court of India in Civil Appeal No. 807 of 1976 filed by the NCDC, by its order reported in (1998) 6 SCC480 as also in State of Orissa and Ors. Vs. Steel Authority of India Ltd., reported in (1998) 6 SCC476 and in Central Coalfields Ltd. Vs. State of Jharkhand & Ors., reported in (2015) 6 SCC220 Thus, the NCDC was made liable to make payment of royalty even on the coal supplied to the workmen for domestic consumption, till 12.9.1972, when there was an 5 amendment in Section-9 of the MMDR Act, bringing sub-section 2A therein, by Act 56 of 1972, making exemption from payment of royalty in respect of any coal consumed by workmen engaged in any colliery, provided that such consumption by any workman did not exceed 1/3rd of a ton per month.

5. Prior to this, Tata Steel (TISCO as it then was), was also of the opinion that in accordance with provisions of Section 9 of the MMDR Act they were liable to pay royalty on the tonnage of washed coal, i.e., after the ROM coal is removed from the washery and after its beneficiation process. A writ petition was also filed by the TISCO in Patna High Court being C.W.J.C. No. 1 of 1984(R), in which, by Judgment dated 07.08.1990 the Patna High Court held that TISCO was liable to pay royalty on the tonnage of washed or beneficiated coal, in the following words :- “From the plain reading of Section 9(2) of the Act, it is clear that royalty is payable on the coal removed from the leased area and so long it is not removed, no royalty is payable. In view of the fact that coal is removed from the leased area, only after it is washed, the petitioner is liable to pay royalty on the weightage of that coal.”

6. This position in law continued till the year 1998, when the decision of the Hon'ble Supreme Court came in State of Orissa and Ors., Vs. Steel Authority of India Limited, reported in (1998) 6 SCC476 whereby the law was made clear “that removal from the seam in the mine and extracting the same though the pit’s mouth to the surface satisfy the requirement of Section 9 in order to give rise to liability for royalty." As such, after this clarification in the position of law, the TISCO was again paying royalty on ROM coal only, i.e., on the tonnage of ROM coal as it was after its extraction from the mine, and before the same was subjected to beneficiation process in the washery.

7. It appears that consequent to the aforesaid decision of the Hon’ble Supreme Court in SAIL's case, Rules 64-B and 64-C were introduced in the Mineral Concession Rules, 1960, vide notification dated 25.09.2000, prescribing in Rule 64-B that "In case processing of run-of–mine is carried out within the leased area, then, royalty shall be chargeable on the processed mineral removed from the leased area" and that "In case run-of-mine mineral is removed from the leased area to a processing plant which is located outside the leased area, then, royalty shall be chargeable on the unprocessed run-of-mine mineral and not on the processed product." Rule 64-C prescribed for charging royalty in case the tailings or rejects are used for sale or consumption. Tata Steel Limited, however, continued to pay the royalty on the ROM coal only, in spite of insertion of Rules 64-B and 64-C in the Mineral Concession Rules. In or about the year 2007 and onwards, the impugned demand notices were raised by the District Mining Officer, Ramgarh / Hazaribag / Dhanbad, demanding royalty on the tonnage of washed coal. 6 8. The petitioner Tata Steel Limited initially challenged the legality and vires of Rules 64-B and 64-C of the Mineral Concession Rules, before this Court in the Writ Applications, W.P.(C) No. 2995 of 2008, W.P.(C) No. 2999 of 2008, W.P.(C) No. 1504 of 2009, W.P.(C) No. 1505 of 2009, which were heard together and disposed of by a Division Bench of this Court by the Judgment reported in (2014) 4 AIR Jhar 513, upholding the vires of Rules 64-B and 64-C of the Mineral Concession Rules, and holding that the petitioner Tata Steel was liable to pay royalty in terms of Section 9 of the MMDR Act on processed mineral / clean coal / steel grade coal and other grades of coal which is removed from the leased area of the petitioner to its own steel plant at Jamshedpur, as per Section 9 read with Second Schedule of the MMDR Act read with Rule 64-B(1) of the Mineral Concession Rules. The petitioner Tata Steel was also found liable to pay royalty on the middlings, tailings, rejects, de-shale which are partly used in the petitioner’s power plant as fuel and partly sold to the consumers, as per Section 9 of the MMDR Act read with Second Schedule with proviso to Rule 64-C of the Mineral Concession Rules. The petitioner Tata Steel was held liable to pay differential royalty on clean coal, middlings, tailings, rejects, for the period to which the demand notices related and was also not held entitled to any refund of royalty.

9. This decision of this Court was challenged by Tata Steel in the Hon’ble Supreme Court of India in Civil Appeal Nos. 2938-39 and 2940-41 of 2015, which were heard along with Civil Appeal Nos. 303 and 304 of 2004, and all these Civil Appeals were decided by the Hon’ble Supreme Court of India by the common Judgement reported in (2015) 6 SCC193 in the following terms:- “77.1. The decision rendered in SAIL is confined to its own facts and to the minerals dolomite and limestone. The decision does not deal with removal of a mineral from the leased area but deals with consumption within the leased area. 77.2. The unreported decision of this Court in Central Coalfields Ltd. approves the law laid down by the Orissa High Court in National Coal Development Corpn. Ltd. to the effect that removal of coal from the seam in the mine and extracting it through the pit-head to the surface satisfies the requirements of Section 9 of the MMDR Act in order to give rise to a liability for royalty. This view was earlier approved by this Court in National Coal Development Corpn. Ltd. 77.3. In view of the insertion of Rule 64-B and Rule 64-C on 25.9.2000 in the Mineral Concession Rules, the levy of royalty on coal has now been postponed from the pit-head to the stage of removal of the coal (whether unprocessed or ROM coal or whether beneficiated coal). 77.4. In view of the decision in Central Coalfields Ltd. the entitlement of TISCO and Tata Steel to refund of royalty from 10.8.1998 to 25.9.2000 is recognized. For the period from 25.9.2000 onwards, 7 TISCO is obliged to pay royalty as per Rule 64-B and Rule 64-C of the Mineral Concession Rules. 77.5. Tata Steel, like TISCO is liable to pay royalty on coal with effect from 25.9.2000 in terms of Rule 64-B and Rule 64-C of the Mineral Concession Rules. 77.6. The constitutional validity or the vires of Rule 64-B and Rule 64- C of the Mineral Concession Rules has not been adjudicated upon. It is open to Tata Steel either to revive these appeals limited to this question or to challenge the constitutionality and vires of these Rules through a separate challenge." In paragraph 72 of this Judgment, the Supreme Court has mentioned as follows:-

“72. We may mention that the learned counsel for Tata Steel had reserved his right to challenge the constitutionality of Rule 64-B and Rule 64-C of the MCR should his interpretation of the law be not accepted, namely, that royalty on coal is chargeable on the extracted tonnage at the pit-head. Since we have not accepted this interpretation post the insertion of Rule 64-B and Rule 64-C in the MCR, we leave it open to Tata Steel to challenge the constitutionality of these Rules by reviving these appeals to this limited extent or by initiating fresh proceedings.”

10. In view of the liberty given in paragraph 72 of the aforesaid decision, the Tata Steel again filed I.A. No. 1 of 2015 in Civil Appeal No. 303 of 2004, I.A. Nos. 5-6 of 2015 in Civil Appeal Nos. 2940-2941 of 2015 and I.A. Nos. 9-10 of 2015 in Civil Appeal Nos. 2938-2939 of 2015, making two prayers as follows:- (i) to permit the applicant to revive the appeals in terms of the judgement dated 17.03.2015; and (ii) to permit the applicant to file a separate petition before the High Court to question the vires or validity of Rules 64-B and 64-C of the Mineral Concession Rules, 1960. The Hon’ble Supreme Court disposed of the aforesaid I.As. by order dated 8th May, 2015, in the following terms:- “We are not inclined to grant the first prayer. However, we permit the applicants to file a separate petition before the High Court, if so desire, to question the vires or the validity of Rule 64B and 64C of the Mineral Concession Rules, 1960 in accordance with law.”

11. Thus, in view of the liberty granted by the Hon’ble Supreme Court of India, these are the second round of litigation initiated by the petitioner Tata Steel challenging the vires of Rules 64-B and 64-C of the Mineral Concession Rules. Submissions of the respective parties 12. Mr. Abhishek Manu Singhvi, learned Sr. Counsel for the petitioner submits that Rule 64-B and 64-C of the Mineral Concession Rules, is ultra-vires Section 9 of the MMDR Act as also Article 14 of the Constitution of India, so far 8 as it relates to coal only. So far the other minerals are concerned, there is no challenge to these Rules and as such, the submissions of learned Sr. Counsel is mineral specific, i.e., qua coal only. Learned Senior Counsel has drawn our attention towards the detailed process by which the coal is extracted from the womb of the mother earth and is made useable for the purpose of manufacturing iron and steel. It is pointed out by learned Sr. Counsel that when the ROM coal is extracted from the mines of Tata Steel, it is Washery Grade-IV Coal having ash contents of more than 30%. This coal may be used as it is, for different purposes, but for making it viable for use in iron and steel industry, it has to be made Steel Grade-II or Steel Grade-I coal, and this target is achieved only by washing the coal in the washery. No chemical process is undergone therein and in the process undergone in washery, the ROM coal, i.e., Washery Grade-IV coal, first becomes Washery Grade-III coal, with ash contents up to 26 %, then again it becomes Washery Grade-II coal with ash contents up to 22 %, after further washing process it becomes Washery Grade-I coal with ash contents up to 20% and after further processing it becomes Steel Grade-II coal having ash contents up to 17% and finally Steel Grade-I coal having ash contents up to 14%. It is pointed out by learned Sr. Counsel, and not disputed by the respondents, that in the process the weight of coal increases. Thus, a ROM coal which might be weighing 100 tons just after extraction from the mines may weigh more than 110 tones or about 112 tones after the target is achieved of Steel Grade-I coal and this may be due to the absorption of moisture while undergoing the process. It is submitted by learned Senior Counsel that the rate of royalty of all the grades of coals, i.e., Washery Grade-IV coal, Washery Grade-III coal, Washery Grade-II coal, Washery Grade-I coal, Steel Grade-II coal and Steel Grade-I coal are different and is in ascending order. Learned Sr. Counsel accordingly, submits that the petitioner, which extracted Washery Grade-IV coal, if it is required to make the payment of royalty on Washery Grade-IV coal, it shall be liable to make the payment of royalty of the lesser amount, both rate wise and weight wise, but as the quality of the coal is improved to the next higher grade the royalty shall be more both weight wise as well as rate wise. As such, when the Washery Grade-IV coal is finally made Steel Grade-I coal, the royalty is much higher on the Steel Grade-I coal, both due to the enhancement in the grade and due to the increase in its weight in washing process, which may be due to absorption of moisture.

13. Learned Sr. Counsel submits that Section 9 of the MMDR Act nowhere prescribes that royalty shall be chargeable on washed or the processed mineral after beneficiation. Only Rule 64-B of the Mineral Concession Rules prescribes that in case ROM minerals (in this case coal) is subjected to processing within the leased area, then, royalty shall be chargeable on the processed mineral 9 removed from the leased area. Learned Sr. Counsel submits that this is beyond the scope of Section 9 of MMDR Act. Learned Sr. Counsel has also drawn our attention towards Sub-Rule (2) of Rule 64-B of the Mineral Concession Rules, which reads that in case run-of-mine mineral is removed from the leased area to a processing plant which is located outside the leased area, in that case the royalty shall be chargeable on the unprocessed run-of-mine mineral and not on the processed product. Learned Sr. Counsel has pointed out that in Jharia Group of Collieries, Tata Steel has two adjacent collieries, one is Bhelatand A colliery and the other is Sijua colliery. In Sijua colliery there is no washery, whereas in Bhelatand A colliery there is a washery within the leased area. The ROM coal extracted from both these collieries are Washery Grade-IV coal. It is pointed out by learned Sr. Counsel that in Bhelatand A colliery in which as washery is situated, Tata Steel is required to pay royalty on the processed coal, whereas in Sijua colliery where there is no washery and the coal is taken outside the leased area for washing, the royalty is charged only on the ROM coal. It is pointed out that a royalty only on ROM coal shall be chargeable even if the coal extracted from the Sijua colliery is brought to the washery situated in adjacent Bhelatand A colliery. Learned counsel has also pointed out that even if the coal extracted from Bhelatand A colliery is not washed in the washery situated therein and is taken out from the mining leased area to a washery outside, the royalty chargeable shall be only on the ROM coal and not on the processed coal. Learned counsel submitted that this situation is not only bizarre, but also anomalous and absolutely arbitrary, having no connection with the object to be achieved and is accordingly, violative of Article 14 of the Constitution of India. In support of his contention learned Sr. counsel has placed reliance upon the decisions of the Supreme Court of India in Nagpur Improvement Trust & Another Vs. Vithal Rao & Ors., reported in (1973) 1 SCC500 and in State of Uttar Pradesh & Ors. Vs. Deepak Fertilizers & Petrochemical Corporation Ltd., reported in (2007) 10 SCC342 Learned Senior counsel has also placed reliance upon the decision of the Apex Court in State of West-Bengal Vs. Anwar Ali Sarkar, reported in AIR1952SC75 wherein it has been held that the classification permissible must be based on some real and substantial distinction bearing a just and reasonable relation to the objects sought to be attained and cannot be made arbitrarily and without any substantial basis, and that the classification should never be arbitrary, artificial or evasive. In order to pass the test, two conditions must be fulfilled, namely, (i) that the classification must be founded on intelligible differentia which distinguishes those that are grouped together from others, and (ii) that the differentia must have a rational relation to the object sought to be achieved by the Act. Placing reliance on these decisions, learned Sr. Counsel 10 submitted that Rules 64-B and 64-C of the Mineral Concession Rules is based on arbitrary classification having no nexus to the object sought to be achieved, and are fit to be struck down being violative of Article 14 of the Constitution of India as also ultra vires Section 9 of MMDR Act read with Second Schedule.

14. As the main contention of the learned counsels for the respondents is the maintainability of these writ applications, being barred by res-judicata, as the issues involved in these cases, have already been decided by this Court, between the same set of parties, it is submitted by learned Sr. Counsel for the petitioner that these writ applications are quite maintainable and cannot be dismissed on the ground of maintainability only. Learned Sr. Counsel has submitted that these writ applications are not hit by the principle of res-judicata, in as much as, while deciding the matter reported in (2015) 6 SCC193 the Hon’ble Supreme Court of India in paragraph 72 clearly mentioned that the Tata Steel had reserved its right to challenge the constitutionality of Rule 64-B and Rule 64-C of the Mineral Concession Rules, and the Apex Court left it open to the Tata Steel to challenge the constitutionality of these Rules either by reviving those appeals before the Supreme Court itself, or by initiating the fresh proceedings. Upon the I.As. filed by the Tata Steel to revive the appeals or to give liberty to file separate petitions before the High Court to question the vires and validity of Rules 64-B and 64-C of the Mineral Concession Rules, the Hon’ble Supreme Court gave the liberty to Tata Steel to file separate petition before the High Court, to question the vires or the validity of Rule 64B and 64C of the Mineral Concession Rules. Thus, there is no question of these appeals being barred by the principles of constructive res-judicata. Learned Sr. Counsel further pointed out that by order dated 22.3.2017 passed in these applications, the matter has been referred to the Full Bench only taking into consideration the situation that since the matter has already been decided by a co-ordinate Division Bench of this Court which still has the binding force, it may not be appropriate for a Division Bench to take a contrary view if so required, and accordingly, the Division Bench referred the matter to the Larger Bench. As such this Larger Bench is not at all bound by the decision taken by the Division Bench and can take a contrary view. Learned Sr. Counsel accordingly, submitted that there is no force in the submissions of learned counsels for the State as also the Union of India challenging the maintainability of these applications.

15. Learned Advocate General, arguing for the State of Jharkhand submitted that Tata Steel had earlier filed W.P.(C) No. 2995 of 2008, W.P.(C) No. 2999 of 2008, W.P.(C) No. 1504 of 2009 and W.P.(C) No. 1505 of 2009, for the same very reliefs in this Court. In these writ applications also the vires of Rules 64-B and 64-C of the Mineral Concession Rules were squarely under 11 challenge and the same contentions were raised in those writ applications also. Those writ applications have finally been adjudicated by a Division Bench of this Court in which it has been held that provisions of Rules 64-B and 64-C of the Mineral Concession Rules neither violate any Clause of Article 14 of the Constitution of India, nor are they ultra-vires to the provisions of Section 9 of the MMDR Act read with Second Schedule. It is submitted that the said decision of this Court has been upheld by the Supreme Court of India by its decision reported in (2015) 6 SCC193 and no portion of the judgement rendered by the High Court was interfered with, or set aside by the Apex Court. To the contrary, the Apex Court held as follows:-

"7. The complexities of chargeability, computation and levy of royalty on different minerals have now been simplified, clarified and standardized with the insertion of Rule 64-B and Rule 64-C of the MCR with effect from 25.09.2000.

68. A plain reading of Rule 64-B of the MCR, with which we are presently concerned, clearly suggests that the leased area mentioned therein has reference to the boundaries of the leased area given to a leaseholder. Sub- rule (1) provides that if ROM mineral is processed within the boundaries of that leased area, then royalty will be chargeable on the processed mineral removed from the boundaries of the leased area. However, if ROM mineral is removed without processing from the boundaries of the leased area then in terms of sub-rule (2) royalty will be chargeable on the unprocessed ROM mineral. Rule 64-B of the MCR is silent about removal of a mineral from the mine/pit-head but which is not removed from the boundaries of the leased area. This is a clear pointer that royalty is to be paid by the leaseholder only on removal of the mineral from the boundaries of the leased area. This simplification and clarification takes care of some of the different and difficult situations that we have referred to above, namely, the stage of charging royalty on coal at the pit-head or post-beneficiation, the stage of charging royalty on iron ore at the pit-head or post beneficiation, the stage of charging royalty on dolomite and limestone at the pit-head or after the removal of waste and foreign matter and of course the stage of charging royalty on other minerals such as copper, gold, lead and zinc amongst others.

69. Similarly, Rule 64-C of the MCR relates to royalty on tailings or rejects. As far as Tata Steel is concerned, its computation given in the Convenience Volume indicates that royalty is paid and payable on middlings and tailings. Rule 64-C of the MCR makes it clear that royalty is payable on rejects when they are sold or consumed after being dumped. This will take care of situations such as that pertaining to silver, as mentioned in the affidavit of the Union of India.

70. There is nothing to indicate in Rule 64-B and Rule 64-C of the MCR that coal has been put on a different pedestal from other minerals mentioned in the MMDR Act read with the Second Schedule thereto. It is, therefore, difficult to accept the view canvassed by the Union of India that these Rules “may not be particularly applicable on coal minerals.” That apart, the stand of the Union of India is not definite or categorical 12 (“may not be”). In any event, we are not bound to accept the interpretation given by the Union of India to Rule 64-B and Rule 64-C of the MCR as excluding only coal. On the contrary, in NMDC this Court has observed that these Rules are general in nature, applicable to all types of minerals, which includes coal. The expression of opinion by the Union of India is contrary to the observations of this Court.

71. Therefore, on a plain reading of Rule 64-B and Rule 64-C of the MCR, we are of the opinion that with effect from 25.9.2000 when these Rules were inserted in the MCR, royalty is payable on all minerals including coal at the stage mentioned in these Rules, that is, on removal of the mineral from the boundaries of the leased area. For the period prior to that, the law laid down in Central Coalfield Ltd. will operate, as far as coal is concerned, from 10.8.1998 when SAIL was decided, though for different reasons." 16. Learned Advocate General submitted that having thus held the validity of Rules 64-B and 64-C of the Mineral Concession Rules, by the Apex Court, nothing remains to be decided by this Court and these writ applications are barred by the principles of constructive res-judicata, as all the issues involved in the present writ applications, between the same parties, have already been decided by this Court in the earlier writ applications and the decision of this Court having been upheld by the Hon’ble Supreme Court in its decision reported in (2015) 6 SCC193 17. Learned Advocate General, arguing for the State of Jharkhand further submitted that the constitutional validity of Rules 64-B and 64-C of the Mineral Concession Rules cannot be questioned only on the ground that the classification is not proper. In this connection the law has been laid down by the Apex Court in M/s. Murthy Match Works & Others Vs. The Assistant Collector of Central Excise & Another, reported in (1974) 4 SCC428 wherein it has been held as follows:-

“18. Another proposition which is equally settled is that merely because there is room for classification it does not follow that legislation without classification is always unconstitutional. The Court cannot strike down a law because it has not made the classification which commends to the Court as proper. Nor can the legislative power be said to have been unconstitutionally exercised because within the class a sub-classification was reasonable but has not been made.” (Emphasis supplied). In this connection learned Advocate General has also placed reliance upon the decision of the Apex Court in Union of India & Others Vs. Nitdip Textile Processors Private Limited & Another, reported in, (2012) 1 SCC226 wherein it has been held as follows:-

"7. It is now well settled by a catena of decisions of this Court that a particular classification is proper if it is based on reason and not purely arbitrary, caprice or vindictive. On the other hand, while there must be a reason for the classification, the reason need not be a good one, and it is immaterial that the statute is unjust. The test is not wisdom but good faith 13 in the classification. It is too late in the day to contend otherwise. It is time and again observed by this Court that the legislature has a broad discretion in the matter of classification. In taxation, “there is a broader power of classification than in some other exercises of legislation”. When the wisdom of the legislation while making classification is questioned, the role of the courts is very much limited. It is not reviewable by the courts unless palpably arbitrary. It is not the concern of the courts whether the classification is the wisest or the best that could be made. However, a discriminatory tax cannot be sustained if the classification is wholly illusory. *** *** *** 66. To sum up, Article 14 does not prohibit reasonable classification of persons, objects and transactions by the legislature for the purpose of attaining specific ends. To satisfy the test of permissible classification, it must not be “arbitrary, artificial or evasive” but must be based on some real and substantial distinction bearing a just and reasonable relation to the object sough to be achieved by the legislature. The taxation laws are no exception to the application of this principle of equality enshrined in Article 14 of the Constitution of India. However, it is well settled that the legislature enjoys very wide latitude in the matter of classification of objects, persons and things for the purpose of taxation in view of inherent complexity of fiscal adjustment of diverse elements. The power of the legislature to classify is of wide range and flexibility so that it can adjust its system of taxation in all proper and reasonable ways. Even so, large latitude is allowed to the State for classification upon a reasonable basis and what is reasonable is a question of practical details and a variety of factors which the court will be reluctant and perhaps ill-equipped to investigate.

67. It has been laid down in a large number of decisions of this Court that a taxation statute, for the reasons of functional expediency and even otherwise, can pick and choose to tax some. A power to classify being extremely broad and based on diverse considerations of executive pragmatism, the judicature cannot rush in where even the legislature warily treads. All these operational restraints on judicial power must weigh more emphatically where the subject is taxation. Discrimination resulting from fortuitous circumstances arising out of particular situation, in which some of the tax-payers find themselves, is not hit by Article 14 if the legislation, as such, is of general application and does not single them out for harsh treatment. Advantages or disadvantages to individual assesses are accidental and inevitable and are inherent in every taxing statute as it has to draw a line somewhere and some cases necessarily fall on the other side of the line.” (Emphasis supplied). Placing reliance on these decisions learned Advocate General submitted that these writ applications are not at all maintainable, and in any event, it cannot be held that Rules 64-B and 64-C of the Mineral Concession Rules are either ultra vires Article 14 of the Constitution of India, or Section 9 of the MMDR read with Second Schedule thereto. 14 18. Learned Assistant Solicitor General of India, arguing for the Union of India, has also adopted the arguments of learned Advocate General, and has submitted that legal issue before the Supreme Court was legality to Rules 64-B and 64-C of the Mineral Concession Rules. The decision of this Court on the Constitutionality of these Rules are not at all interfered with by the Supreme Court, rather the Supreme Court has held these Rules to be legal and valid and as such there is no scope to challenge the vires of these Rules in these applications, even though the liberty was granted to the Tata Steel, as prayed for, and as discussed above. It is submitted by learned Assistant Solicitor General of India that not only that these applications are barred by constructive res-judicata, rather these applications are in fact in form of review applications and there is no question of reviewing the decision of this Court which has already been upheld by the Hon’ble Supreme Court of India. Learned Assistant Solicitor General of India, accordingly, also submitted that these applications are not at all maintainable. Reasonings and Findings 19. Having heard learned counsels for the respective parties and upon going through the record, we find that though the Hon’ble Apex Court in its decision reported in (2015) 6 SCC193 has not interfered with the decision of this Court, whereby Rules 64-B and 64-C of the Mineral Concession Rules were held to be constitutionally valid, but the fact remains that the impugned action of levying the royalty on the basis of Rules 64-B and 64-C of the Mineral Concession Rules, has been held to be valid by the Hon’ble Apex Court only in view of existence of these Rules in the statute book and so far as these Rules stand as they are. The Apex Court has clearly stated in the order that the constitutional validity or the vires of the Rules 64-B and 64-C of the Mineral Concession Rules has not been adjudicated upon by the Supreme Court and it also gave the liberty to the petitioner Tata Steel by order dated 8th May, 2015 in Interlocutory Application No. 1 of 2015 and analogous Interlocutory Applications, to file separate petition before the High Court to question the vires or the validity of Rules 64-B and 64-C of the Mineral Concession Rules. By no stretch of imagination it can be said that the said order was passed by the Hon’ble Supreme Court only just by way in order to shift the burden from its Board. If the Hon’ble Supreme Court of India has stated that it has not decided the constitutional validity or the vires of these Rules and has given the liberty to Tata Steel to file a separate application challenging the constitutional validity or vires of these Rules in this Court, we are of the considered view that the question is still open to be decided by the High Court and these applications cannot be said to be hit by the principles of constructive res-judicata. 15 20. These writ applications were admitted by order dated 26.6.2015, by a Division Bench of this Court. At the time of admission detailed arguments were made challenging the maintainability of these applications. The Division Bench overruled all those objections and admitted the cases for a detailed hearing on the issues raised in the writ applications. These writ applications were taken up on 22.3.2017 for hearing before a Division Bench. The Division Bench was conscious of the fact that since the matter had already been decided by a Co-ordinate Bench of this Court which still has the binding force, it shall not be proper for the Division Bench to take a contrary view, if so required, and accordingly, the matter has been referred to the Larger Bench. This is how the matter was heard by us in the Full Bench, so that there may be no constrains in taking the contrary view, if so required. As such the question of constitutional validity and the vires of Rules 64-B and 64-C of the Mineral Concession Rules can very well be decided by this Court once again and if necessary, without being prejudiced by the earlier decision of the Division Bench. As such, we do not find any force in the challenge to the maintainability of these writ applications, either on the ground of principles of constructive res-judicata or on the ground that it shall amount to review the earlier decision of this Court. The contentions of learned counsels for the State of Jharkhand and for the Union of India in this regard, have only to be brushed aside.

21. This brings us to the final stage where we have to decide the constitutional validity and vires of Rules 64-B and 64-C of the Mineral Concession Rules. We have gone through the earlier decision of the High Court as also the decision of the Hon’ble Apex Court, affirming the same. We find from the decision of the High Court that while considering the constitutional validity of Rules 64-B and 64-C of the Mineral Concession Rules, this High Court had taken into consideration all the arguments that have been advanced in the present case. This Court had taken into consideration the different stages in which the ROM coal is beneficiated to the stage of Steel Grade Coal. This Court had also taken into consideration the various decisions cited on the point. This Court had also taken into consideration the decision of the Apex Court in Bharat Coking Coal Limited. vs. State of Bihar & Ors., reported in (1990) 4 SCC557 wherein the Hon’ble Supreme Court held that slurry is coal and removal of slurry from the river bed is a mining operation under Section 3(d) of the Act, which need not be an underground activity only. The constitutional validity of Rules 64-B and 64-C of the Mineral Concession Rules has been upheld by this Court giving the following reasonings:-

“83. The provisions of Rules 64B and 64C have been inserted in the Mineral Concession Rules, 1960 in view of ultramodern technology of 16 coal beneficiation used in coal washeries situated in leasehold areas and the consequent use of all its by-products such as clean coal, middlings, tailings and rejects. Holder of a mining lease enjoys largesse in the form of mining leases. Levy of royalty on minerals is based on the premise that mineral resources are “wasting assets”, “one-crop-product”. The rationale for royalty is that it is a payment to the State Government / mineral rights holder from mineral producer in consideration for the extraction of valuable and non-renewable natural resources. Royalty forms a vital part of a fiscal regime of mining and is an important means of revenue realization for the State Government. It is, therefore, virtually impossible to lose money on the processed mineral and also the by-products which are in the nature of middlings, tailings and rejects including de-shale rejects.

84. Royalty on coal as set out in the Second Schedule to the Act arising out of introduction of Rules 64B and 64C in the Mineral Concession Rules, 1960 only recognizes various categories of mineral removed from the leased area. For instance, in the case of coal, Rules 64B(1) and 64C recognize various categories of mineral exigible to royalty as clean coal, middlings, tailings and rejects coming out from the coal washery situated within the leased area. Rules 64B and 64C are in conformity with the MMDR Act and Second Schedule. We do not find any arbitrariness in the Rules 64B and 64C and we do not find any merit in the contention challenging the vires of Rules 64B and 64C. *** *** *** 111. The State being the owner of the minerals is therefore entitled to charge royalty on the processed mineral if they are removed from the leased area at the rates prescribed under the Second Schedule for such grades and categories of coal, as per prices notified under the Colliery Control Orders from time to time. Therefore, the provisions of rules 64B and 64C neither do appear to violate the equality clause of Article 14 of the Constitution, nor do they appear to be ultra vires to the provisions of the parent Act i.e. Section 9 of M.M.D.R. Act read with the Second Schedule.

112. A classification is valid on the anvil of Article 14 if the same is based on rational differentia and has a reasonable nexus with the object sought to be achieved. Reference may be made to the judgment in the case of State of West Bengal v. Anwar Ali Sarkar [AIR1952SC75 and in the case of Ram Krishna Dalmia v. Justice S.R. Tendolkar [AIR1958SC538. In the constitution bench decision of the Hon’ble Supreme Court in the case RE: The Special Courts Bill, 1978 (1979) 1 SCC380 the Hon’ble Apex Court introduced as many as thirteen propositions that bear relevance to forensic determination of the validity of a law with reference to equality clause enshrined in Article 14 of the Constitution. Hon’ble Supreme Court in para (72(7)) held that “The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguished those that are grouped together from 17 others and (2) that that differentia must have a rational relation to the object sought to be achieved by the Act. *** *** *** 114. There is no difficulty in answering the first question as the processed mineral itself forms a class in itself as the ROM after processing leads to removal of its impurities and results in various specified categories of mineral i.e. coal in the present case and also middlings, tailings or rejects which are separately consumable for different purposes. Understandably, if the lessee undertakes the beneficiation of ROM coal i.e. its processing, it is intended to improve the quality of the mineral as aforesaid which comes out after the processing and leave impurities aside. ROM coal obviously coming out of the mine apart from containing a particular grade of coal, also contains unsegregated middling, tailings and rejects which without processing, cannot be subjected separately to use and consumption. In such circumstances, for different purposes as being undertaken in the case of processed coal, there is rational differentia for distinguishing the unprocessed ROM mineral coal with that of the processed mineral. *** *** *** 116. As per the proposition of law in the judgment quoted herein above, the State has the power of determining who should be regarded as a class for the purposes of legislation. This power no doubt in some degree is likely to produce some inequality. But the classification must not be arbitrary but must be rational. That is to say, it must only be based on some qualities or characteristics which are found in the things grouped together and not in others which are left out and have a reasonable relation with the object of the legislation. Article 14 forbids class discrimination but does not forbid classification for the purposes of legislation. Classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. The Courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case. The law can set apart the classes according to the needs and exigencies and as suggested by experience. In this light, and the discussions made herein above, by the same reason, classification made under section 64C for levying royalty on tailings and rejects if they are later on used for sale or consumption is also neither arbitrary nor unreasonable. As already discussed, the relevant provisions of Rule 64B and 64C operate within the confines of ingredients of section 9 of the parent Act read with the Second Schedule. It has also been observed by the Hon’ble Supreme Court in the case of N.M.D.C.(Supra) that these rules only clarify the existing position and they are general in nature.”

22. The matter went up to the Supreme Court and the Supreme Court in its decision reported in (2015) 6 SCC193 has again discussed the process undergone by ROM coal in achieving Steel Grade Coal and as regards the process, the Supreme Court has concluded as follows:-

“25. From this, it is quite clear that the beneficiation process, as far as coal is concerned, has two significant consequences – the grade of coal improves (from Washery Grade IV it could improve to Steel Grade1) and 18 the weight of the coal increases [from 100 tonnes of raw ROM coal to 105 tonnes (excluding rejects) of beneficiated coal).” The Hon’ble Apex Court has further continued to hold as follows:-

“56. It is clear therefore that Section 9 of the MMDR Act has to be read and understood in conjunction with the Second Schedule to the MMDR Act. There is a good reason for it, which is that the scheme of the levy of royalty cannot be straitjacketed in view of the variety of minerals to which the MMDR Act applies and for the extraction of which royalty has to be paid.

57. In the case of coal, it has been noted that “Though ROM (coal) is fit for many purposes, it is not fit for the steel industry”, “in case of coal … the entire ROM can be generally made usable” and “it is not necessary that coal produced from a mine should always be subjected to processing. There are various coal mines in the country producing raw coal without any processing…….”. This is to say that ROM coal can generally be used in the raw form without processing and beneficiation is not at all necessary. However, if the raw coal is to be utilized for some specialized purposes it would need beneficiation. *** *** *** 60. In the case of coal, beneficiation is not necessary since ROM coal can be used as it is straight from the pit-head. In the case of iron ore, as noticed in NMDC, waste material is removed from the extracted iron ore and through the beneficiation process the ore is upgraded. The removal of waste material obviously reduces the weight of the iron ore and that is why it saves the cost of transportation as observed in NMDC. However, in the case of coal apart from the fact that beneficiation is not necessary, if the leaseholder does in fact beneficiate the coal, the weight of the beneficiated coal is more than ROM coal as has been noted above. This would, therefore, increase the cost of transportation which is based on the weight of the coal. Under the circumstances, removal of beneficiated coal as against ROM coal might work to the disadvantage of the leaseholder. For this reason, no similarity can be found between coal and iron ore or between coal and dolomite and limestone (apart from the fact that SAIL did not deal with removal from the leased area but consumption within the leased area). *** *** *** 63. What follows from this discussion is that though royalty may have a definite connotation, the rate of royalty, its method of computation and the final levy are different from mineral to mineral. It is for this reason that this Court held in NMDC that the Second Schedule to the MMDR Act has to be read as a part and parcel of Section 9 of that Act. If the general conclusion of SAIL is to be applied across the board without reference to the Second Schedule to the MMDR Act, calculation of royalty on copper, gold, lead, zinc and some other minerals would become impossible.

64. It is quite clear that the issue of computation of royalty on minerals is rather complex and it is best left to the experts in the field and it cannot be painted with a broad brush as has been done in SAIL. That decision must be confined to its own facts with reference to consumption of dolomite and limestone. Since the Second Schedule to the MMDR Act must be read as a part and parcel of Section 9 thereof, the interpretation given in 19 SAIL cannot possibly apply to the computation of royalty for every mineral, as discussed above. *** *** *** 66. In view of the decision of this Court in Central Coalfields Ltd. the issue is no longer res integra and insofar as coal is concerned, its “removal from the seam in the mine and extracting the same through the pit’s mouth to the surface (satisfies) the requirement of Section 9 in order to give rise to liability for royalty.

67. The complexities of chargeability, computation and levy of royalty on different minerals have now been simplified, clarified and standardized with the insertion of Rule 64-B and Rule 64-C of the MCR with effect from 25.9.2000.

68. A plain reading of Rule 64-B of the MCR, with which we are presently concerned, clearly suggests that the leased area mentioned therein has reference to the boundaries of the leased area given to a leaseholder. Sub- rule (1) provides that if ROM mineral is processed within the boundaries of that leased area, then royalty will be chargeable on the processed mineral removed from the boundaries of the leased area. However, of ROM mineral is removed without processing from the boundaries of the leased area then in terms of sub-rule (2) royalty will be chargeable on the unprocessed ROM mineral. Rule 64-B of the MCR is silent about removal of a mineral from the mine / pit-head but which is not removed from the boundaries of the leased area. This is a clear pointer that royalty is to be paid by the leaseholder only on removal of the mineral from the boundaries of the leased area. This simplification and clarification takes care of some of the different and difficult situations that we have referred to above, namely, the stage of charging royalty on coal at the pit-head or post-beneficiation, the stage of charging royalty on iron ore at the pit-head or post beneficiation, the stage of charging royalty on dolomite and limestone at the pit-head or after the removal of waste and foreign matter and of course the stage of charging royalty on other minerals such as copper, gold, lead and zinc amongst others.

69. Similarly, Rule 64-C of the MCR relates to royalty on tailings or rejects. As far as Tata Steel is concerned, its computation given in the Convenience Volume indicates that royalty is paid and payable on middlings and tailings. Rule 64-C of the MCR makes it clear that royalty is payable on rejects when they are sold or consumed after being dumped. This will take care of situations such as that pertaining to silver, as mentioned in the affidavit of the Union of India.

70. There is nothing to indicate in Rule 64-B and Rule 64-C of the MCR that coal has been put on a different pedestal from other minerals mentioned in the MMDR Act read with the Second Schedule thereto. It is, therefore, difficult to accept the view canvassed by the Union of India that these Rules “may not be particularly applicable on coal minerals.” That apart, the stand of the Union of India is not definite or categorical (“may not be”). In any event, we are not bound to accept the interpretation given by the Union of India to Rule 64-B and Rule 64-C of the MCR as excluding only coal. On the contrary, in NMDC this Court has observed that these Rules are general in nature, applicable to all types of minerals, 20 which includes coal. The expression of opinion by the Union of India is contrary to the observations of this Court.

71. Therefore, on a plain reading of Rule 64-B and Rule 64-C of the MCR, we are of the opinion that with effect from 25.9.2000 when these Rules were inserted in the MCR, royalty is payable on all minerals including coal at the stage mentioned in these Rules, that is, on removal of the mineral from the boundaries of the leased area. For the period prior to that, the law laid down in Central Coalfield Ltd. will operate, as far as coal is concerned, from 10.8.1998 when SAIL was decided, though for different reasons.”

23. In view of the law laid down by the Hon’ble Supreme Court of India as above, the question that is required to be looked into is, whether the charge of royalty at the higher rates on the processed coal, (a) due to change in nature of coal in the respective grades from Washery Grade-IV to Steel Grade-1, as also (b) due to gain in weight by the ROM coal in the process of beneficiating, is in any manner beyond the scope of Section 9 of the MMDR Act. According to the latest decision of the Supreme Court on the point, (Para-66 in (2015) 6 SCC193, the requirement of Section 9 of the MMDR Act "is no longer res integra and insofar as coal is concerned, its removal from the seam in the mine and extracting the same through the pit’s mouth to the surface (satisfies) the requirement of Section 9 in order to give rise to liability for royalty.”

24. Indeed it is nowhere stated by the Hon’ble Supreme Court this interpretation of Section 9 of the MMDR Act is for pre - Rules 64-B and 64-C era only, i.e., prior to 25.9.2000, and not for post - Rules 64-B and 64-C era. In other words, the aforesaid interpretation of Section 9 of the MMDR Act is equally applicable to pre as well as post - Rules 64-B and 64-C era.

25. The question what includes a mining process, has been decided by the Apex Court in Bharat Coking Coal Limited. vs. State of Bihar & Ors., reported in (1990) 4 SCC557 The case relates to these very captive collieries of the petitioner Tata Steel Limited. In the process of washing the coal, small particles of coal, commonly known as slurry, escape from the washery, overflow from the plant and the storage ponds of the petitioner, and settle down in raiyati lands and also in the river bed. TISCO, as it then was, claimed the right to collect the slurry escaped from its washery. The State Government did not accept the right of the petitioner and instead, settled the rights of collection of slurry with other persons, on payment of royalty to the State. TISCO filed writ petitions before the High Court challenging the authority of the State Government’s action on the ground that slurry was a mineral being coal and as such its collection and mining was regulated by MMDR Act and the State Government had no authority to grant lease for collection of slurry without the previous sanction of the Central 21 Government. The matter went up to the Hon’ble Apex Court and the Hon’ble Supreme Court held as follows :-

"1. -------------. Section 3 of the Act defines ‘mining operations’ which means any operation undertaken for the purpose of winning any mineral. The expression ‘mine’ is not defined by the Act instead Section 3(i) says that the expression ‘mine’ has the same meaning as assigned to it in the Mines Act, 1952. ‘Mine’ as defined by Section 2(1)(j) of Mines Act, 1952 means any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on and it includes: (xii) “any premises in or adjacent to and belonging to a mine on which any process ancillary to the getting, dressing or preparation for sale of minerals or of coke is being carried on.” The inclusive definition of mine is wide enough to include any premises belonging to a mine where any ancillary process is carried on for preparing the minerals or coke for sale. There is no dispute between the parties that the coal as extracted from the coal mine is crushed into pieces and thereafter it is washed to remove its impurities and ash contents to make the coal fit for sale. After the coal is washed, it assumes the form of coke which is sold to consumers. The washery, wherein the process of washing coal is carried on, for the purpose of preparing the coal for sale is an integral part of a mine as it involves ancillary process. Washery is included within the definition of mine under the Mines Act, 1952. Any waste discharge from the washery carrying small particles of coal in the form of slurry is the waste slime arising from operations carried out in a mine.

24. ------------ the slurry which escapes from the appellant's washeries is mineral and its regulation is within the jurisdiction of the Central Government. -----------------." (Emphasis supplied).

26. In Bhagwan Dass Vs. State of U.P. & Ors., reported in (1976) 3 SCC784 it has been held as follows:-

"3. -------------. It is in the first place wrong to assume that mines and minerals must always be subsoil and that there can be no minerals on the surface of the earth. Such an assumption is contrary to informed experience. In any case, the definition of mining operations and minor minerals in Section 3(d) and (e) of the Act of 1957 and Rule 2(5) and (7) of the Rules of 1963 shows that minerals need not be subterranean and that mining operations cover every operation undertaken for the purpose of “winning” any minor mineral. “Winning” does not imply a hazardous or perilous activity. The word simply means “extracting a mineral” and is used generally to indicate any activity by which a mineral is secured. -----------." (Emphasis supplied).

27. Again in V.P. Pithupitchai & Anr, Vs. Special Secretary to the Govt. of T.N., reported in (2003) 9 SCC534 the law has been further clarified as follows:-

"2. ----------. Minerals need not necessarily be dug out from the earth and what is dug out from the earth need not necessarily be a mineral. ---------." 22 Thus, a plain reading of the law clarified as above, clearly shows that the lifting of even the slurry washed away from a washery and collected in the river bed, or the land of other, is a mining process, and even washery itself is a mine within the definition of mine under the Mines Act. Thus, Rules 64-B and 64-C of the Mineral Concession Rules bring within their fold even such mining operations such as lifting of the processed mineral from even the washery in the leased area, and even the escaped particles of the mineral deposited in the river bed, or in others land. The change in grade of mineral or increases in weight in the beneficiating process are the incidents peculiar to coal only. Such incidents do not happen in connection with other minerals to which Rules 64-B and 64-C of the Mineral Concession Rules also equally apply. Only because of the fact that these circumstances which are peculiar only to coal and affecting the royalty payers engaged in mining of coal only, it cannot be held that that it is hit by Article 14 of the Constitution of India. Indeed this law applies uniformly to all the collieries and all the royalty payers engaged in mining of coal, without any discrimination. The law in this regard is well settled by the Apex Court in Union of India & Others Vs. Nitdip Textile Processors Private Limited & Another, reported in, (2012) 1 SCC226 which is reproduced as follows, even at the cost of repetition:-

"7. --------------. On the other hand, while there must be a reason for the classification, the reason need not be a good one, and it is immaterial that the statute is unjust. The test is not wisdom but good faith in the classification. It is too late in the day to contend otherwise. It is time and again observed by this Court that the legislature has a broad discretion in the matter of classification. In taxation, “there is a broader power of classification than in some other exercises of legislation”. When the wisdom of the legislation while making classification is questioned, the role of the courts is very much limited. It is not reviewable by the courts unless palpably arbitrary. It is not the concern of the courts whether the classification is the wisest or the best that could be made. --------. *** *** *** 66. To sum up, Article 14 does not prohibit reasonable classification of persons, objects and transactions by the legislature for the purpose of attaining specific ends. To satisfy the test of permissible classification, it must not be “arbitrary, artificial or evasive” but must be based on some real and substantial distinction bearing a just and reasonable relation to the object sough to be achieved by the legislature. ---------. However, it is well settled that the legislature enjoys very wide latitude in the matter of classification of objects, persons and things for the purpose of taxation in view of inherent complexity of fiscal adjustment of diverse elements. The power of the legislature to classify is of wide range and flexibility so that it can adjust its system of taxation in all proper and reasonable ways. Even so, large latitude is allowed to the State for classification upon a reasonable basis and what is reasonable is a question of practical details and a variety 23 of factors which the court will be reluctant and perhaps ill-equipped to investigate.

67. It has been laid down in a large number of decisions of this Court that a taxation statute, for the reasons of functional expediency and even otherwise, can pick and choose to tax some. A power to classify being extremely broad and based on diverse considerations of executive pragmatism, the judicature cannot rush in where even the legislature warily treads. ----------. Discrimination resulting from fortuitous circumstances arising out of particular situation, in which some of the tax-payers find themselves, is not hit by Article 14 if the legislation, as such, is of general application and does not single them out for harsh treatment. Advantages or disadvantages to individual assesses are accidental and inevitable and are inherent in every taxing statute as it has to draw a line somewhere and some cases necessarily fall on the other side of the line.” (Emphasis supplied).

28. In view of the law laid down as above, we are of the considered view that simply because some discrimination is resulting from the fortuitous circumstance due to some peculiarity in coal only, by which the royalty payers on the coal mining only are said to be adversely affected by Rules 64-B and 64-C of the Mineral Concession Rules, the same cannot be held to be hit by Article 14 of the Constitution of India, so long this law applies uniformly to all the collieries and all the royalty payers engaged in mining of coal, without any discrimination amongst themselves. We hold that the collieries and the royalty payers engaged in mining of coal form a separate and distinct class in themselves for the purpose of Article 14 of the Constitution of India. This classification is neither arbitrary, artificial, or evasive, and fully satisfies the test of validity and constitutionality laid down in Anwar Ali Sarkar's case (supra).

29. We accordingly, reiterate the view taken by the Division Bench of this Court and hold that the provisions of Rule 64-B and Rule 64-C of the Mineral Concession Rules are neither violative of Article 14 of the Constitution of India, nor are they ultra-vires the provisions of the parent Act, i.e., Section 9 of the MMDR Act read with its Second Schedule. Indeed any contrary view taken by this Court shall be in direct conflict with the decisions of the Supreme Court in Bharat Coking Coal Limited's case (supra) read with Bhagwan Dass's case (supra) and V.P. Pithupitchai's case (supra), holding that lifting of even the slurry washed away from a washery and collected in the river bed, or the land of other, is a mining process, and even washery itself is a mine within the definition of 'mine' under the Mines Act, thus subject to realization of royalty under the MMDR Act. It is not at all necessary that the coal on which the royalty is charged, (in the present case the processed and beneficiated coal), be necessarily dug out from the womb of the mother earth for the purpose of satisfying the requirement to give rise to liability for royalty. Its removal from the washery shall also have the same 24 connotation, as its removal from the seam in the mine and extracting the same through the pit’s mouth to the surface, for satisfying the requirement of Section 9 of the MMDR Act, in order to give rise to liability for royalty.

30. In view of the aforesaid discussions and in view of the fact that we have held that the provisions of Rule 64-B and Rule 64-C of the Mineral Concession Rules are neither violative of Article 14 of the Constitution of India, nor are they ultra-vires the provisions of the parent Act, i.e., Section 9 of the MMDR Act read with its Second Schedule, there is no question of any interference with the demand notices issued by the District Mining Officers, Ramgarh / Hazaribag / Dhanbad, raising demand of royalty in accordance with Rules 64-B and 64-C of the Mineral Concession Rules, 1960.

31. Consequently, we find no merit in these writ applications and all these three writ applications accordingly, stand dismissed. (H.C. Mishra, J.) P. Patnaik, J.:- (P. Patnaik, J.) Dr. S.N. Pathak, J.:- (Dr. S.N. Pathak, J.) Jharkhand High Court, Ranchi. Dated the 10th of January, 2018. D.S./N.A.F.R.


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