Supreme Court agrees to hear Centre’s curative petition against mineral rights verdict

In September 2024, the Centre filed a petition seeking review of the July mineral tax ruling. However, the court dismissed it.

Mehta said there are individual petitions from states that will be decided by the three-judge bench, but added that their fate would hinge on whether the curative petition succeeds.

The Supreme Court said Thursday it will consider the Centre’s request to take up its curative petition against the 2024 nine-judge bench verdict, which was delivered by an 8:1 majority and held that the legislative power to tax mineral rights is vested with the states.

Appearing for the Centre, Solicitor General Tushar Mehta pointed out that the July 25, 2024, judgement relegated individual petitions to a regular three-judge bench, and urged the court to first hear the curative petition. “This will have international ramifications,” the law officer added.

Mehta said there are individual petitions from states that will be decided by the three-judge bench, but added that their fate would hinge on whether the curative petition succeeds.

The 2024 majority verdict was delivered by then Chief Justice of India D Y Chandrachud, writing for himself and Justices Hrishikesh Roy, A S Oka, J B Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma and Augustine George Mash.

It overruled the 1989 decision of a seven-judge bench in India Cement Ltd vs State of Tamil Nadu, which said royalty is tax and state legislatures lack the competence to levy taxes on mineral rights because the subject matter is covered by the Mines and Minerals (Development and Regulation) Act, 1957, enacted by Parliament in the exercise of powers under Entry 54 of List 1 (Union List) of the Constitution.

In her dissenting judgment, Justice B V Nagarathna cautioned against the likely consequences of overruling the India Cement verdict, including a ‘breakdown of the federal system” and “unhealthy competition” between states.

In September 2024, the Centre filed a petition seeking review of the July decision, saying that it ignores the macroeconomic impact of minerals as a major resource for the core sectors of the economy, and that this ignorance of practical realities is an error apparent on the face of the record.

However, the court dismissed it.