Andhra Pradesh High Court - Amravati
Sri Sai Prabha Granites, vs State Of Andhra Pradesh, on 13 March, 2025
1
APHC010866422016
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3310]
(Special Original Jurisdiction)
THURSDAY ,THE THIRTEENTH DAY OF MARCH
TWO THOUSAND AND TWENTY FIVE
PRESENT
THE HONOURABLE DR JUSTICE K MANMADHA RAO
WRIT PETITION NO: 27693,
27693 15066 and 22303/ 2016
WP No.27693/2016
Between:
Sri Sai Prabha Granites, ...PETITIONER
AND
State Of Andhra Pradesh and Others ...RESPONDENT(S)
Counsel for the Petitioner:
1. N SHOBA
Counsel for the Respondent(S):
1. GP FOR HOME (AP)
2. GP FOR MINES AND GEOLOGY (AP)
3. GP FOR INDUSTRIES COMMERCE (AP)
The Court made the following:
2
COMMON ORDER:
As the issue involved in all these writ petitions is one and the same, they are being taken up for hearing as well as disposed of by way of this Common Order.
2. WP No.15066 of 2016 is filed under Article 226 of the Constitution of India for the following relief:
"....to issue a writ order or direction more in the nature of writ of Mandamus declaring the Demand Notice No 12196/VE/Ogl/201516 dated 11022016 raising demand against a finished product sold by the petitioner, as arbitrary, illegal, unjust, unconstitutional and in violation of principles of Natural Justice and contrary to the Judgment of this Honble Court in the case of Novel Granites and others Vs Government of Andhra Pradesh and others reported in 2010(1) ALD 812 and consequentially to direct the respondents not to interfere with the business of the petitioner in any way and pass...."
The main grievance of the petitioner in this writ petition is that the petitioner firm conducts business of buying and selling finished products i.e., Granite Slabs and Granite Tiles in the name and Style of M/s. Sivam Exports, for which, it also registered with Sale Tax Department and paying all the relevant Taxes such as VAT, Sales Tax, Income Tax etc. The petitioner firm is not involved in dealing with raw mineral at all and the entire business of the petitioner is only in dealing with the finished and processed mineral. While the matter stood thus, all of a sudden the impugned Demand Notice No. 1219(6)/V&E/Ogl/2015-16, dated 11.02.2016 was issued by the 3rd respondent demanding an amount of Rs.1,43,06,456/- from the petitioner towards the alleged seignerage fee and 5 times penalty. Aggrieved by the same, the present writ petition WP No.15066 of 2016 came to be filed. 3
3. WP No.22303 of 2016 is filed under Article 226 of the Constitution of India for the following relief:
".....to issue writ order or direction more particularly one in the n ure of WRIT OF MANDAMUS declaring the action of Respondent No 4 in insisting upon the Petitioner for obtaining of transit passes issued by their office for sale/ transportation of manufactured /finished product slabs and tiles from Petitioners Unit as arbitrary illegal unjust unconstitutional and in violation of Mines and Minerals Development Regulation Act 1957 A P Minor Mineral Concessi Rules 1966 A P Mineral Dealers Rules 2000 and the judgment reported in 2010 1 ALD 812 and pass such order...."
The facts of the case in WP No.22303 of 2016 are that, the petitioner firm is an established Unit after obtaining relevant permissions from all the authorities such as Small Scale Industrial permission, factory licencse and it also registered with Commercial Tax Department. The petitioner firm purchased raw blocks from the lessees with valid dispatch permits issued by the office of the Assistant Director of Mines and Geology followed by way bills. Once the sale is concluded with buyers, the petitioner firm obtained necessary way bills from the commercial Tax department for transportation of the same. while so, a show cause notice bearing No.974/V&E/ OGL/2015-16, dated 23.09.2015 was served on the petitioner alleging that they have received creditable information that 415039 sq ft or 1165.826 cbm quantity of polished granite slabs transported during the period from December 2014 to May 2015 from petitioner unit with only Commercial Tax department way bill. Therefore they have conducted an Inquiry.
It is further stated that M/s Hamsa Minerals India (PVT) Ltd in holding a valid quarry lease granted by State Government in Sy No.67/1B/C of R.L Puram village, Cheemakurthy Mandal, Prakasam District. The granite blocks purchased have suffered payment of seigniorage fee and the petitioner has 4 received it along with valid permit followed by way bill signed and sealed by the office of the Assistant Director of Mines and Geology. The petitioner do not sell any mineral in the raw form. Therefore the petitioner produced all the way bills supplied by M/s Hamsa Minerals India (Pvt) Ltd. In spite, insisting to obtain transit passes, the petitioner submitted detailed explanation along with documentary evidence that he has only supplied 2,01,770.842 sft from 01.12.2014 to 31.05.2015, for which, the petitioner has produced entire documentary evidence along with statement. It is further stated that the petitioner has not granted any quarry lease nor he sell any mineral as stated by the Assistant Director of Mines and Geology to attract the provisions of APMMC Rules 1966 for raising demand and for payment of normal seigniorage fee on the finished product sold by the petitioner nor it attracts A.P. Mineral Dealers Rules 2000. While the matter stood thus, surprisingly the Assistant director of Mines and Geology is insisting upon to obtain transit passes under A.P. Mineral Dealers Rules 2000 for transportation of the mineral. Therefore, he has instructed the Commercial Tax Department also not to issue way bill from their department for transportation of the mineral. Questioning the same, the WP No.22303 of 2016 came to be filed.
4. Whereas, WP No.27693 of 2016 is filed under Article 226 of the Constitution of India for the following relief:
"....to issue a writ order or direction more particularly one in the nature of Writ of Mandamus declaring the action of Respondents in seizing the lorry bearing No AP 27 X 1798 along with the finished product of tiles and slabs of the Petitioner and demanding seigniorage fee on the finished product as arbitrary, illegal, unjust, unconstitutional violative of principles of natural justice and contrary to Mines and Minerals Development Regulation Act 1957 A.P. Minor Mineral Concession Rules 1966 and Mineral Dealers Rules 2000 and pass..."5
The facts of the case in this writ petition are that the petitioner firm has established Cutting & Polishing Unit at Sy No.141 Yellaiah Nagar, Buddawada Village, Chimakurthy Mandal, Praksam District after obtaining all relevant permissions. The petitioner firm process the raw blocks cut them into various seizes of slabs and it sell the finished products i.e., cut and polished granite slabs, out of which, 250 slabs of 5x2 ½ and 6x3 sizes to Krishna Stone Tech Pvt Ltd., Guggiethy area, Bangalore Road Bellary vide Invoice No.29, dated 31.07.2016 same were transported by Lorry bearing No. AP 27 X 1798 along with Way bill No.37160731730781 issued by the Commercial Tax Department, the vehicle was passing through Poddili Town to reach Bellary on 31.07.2016. The Assistant Director of Mines and Geology has seized the vehicle that they are not seigniorage fee payments and has handed over the vehicle along with the material to the Station House Officer, Podili-4 th respondent.
It is stated that, on receipt of show cause notice, the petitioner has submitted explanation stating that the material transported in the vehicle is finished product need and necessity of payment of seigniorage fee does not arise and the Assistant Director of Mines and Geology has no power to seize the vehicle, hence requested to release the vehicle along with material. Instead of release vehicle again a notice is issued by the 3rd respondent in No.39/Vg-Route Check/2013, dated 3.8.2016 requested to pay market value and normal seigniorage fee for 2673 sft Or 7.637 cbm of Black Galaxy Granite Mineral as they have failed to furnish the documentary evidence in token of 6 payment of seigniorage fee for stock available at factory premises including the transporting material under Sub Rule 3(ii)&(iii) of Rule of 26 of A.P Minor Mineral Concession Rules 1966. Further on receipt of 2 nd show cause notice the petitioner had made detailed explanation. Further as the officers continue to intercept and seize the vehicle one of the unit holder filed WP No.20071 of 2016 for release of the vehicle has once again deliver the judgment on 8.7.2016, holding that they exercise no power to seize the vehicle with material and directed them to release the vehicle along with material forthwith. Therefore the action of the respondents in seizing lorry bearing No.AP 27 X 1798 along with finished product of tiles and slabs of the petitioner and demanding seigniorage fee, the WP No.27693 of 2016 came to be filed.
5. This Court vide order dated 02.09.2016 vide WPMP No.34304 of 2016, granted direction that the seized lorry along with stock therein shall be released to the petitioner subject to petitioner depositing a sum of Rs.50,000/- with 3rd respondent and such deposit will be subject to result of the enquiry, which the 3rd respondent will undertake into the matter.
6. The counter affidavits have been filed by the respondents in all the writ petitions.
7. The counter affidavit filed by the 3rd respondent in WP No.15066 of 2016, wherein, while denying the allegations made in the petition, stated that, the petitioner is dealing with the transactions of granite slabs i.e., processed mineral of granite and thereby they have to produce the details of 7 procurement of processed granite along with the documentary evidence of payment of Seigniorage Fee to the Government given by his Seller. In absence of such evidence as the processor of granite slabs transacted, the petitioner is liable for taking action under Rule 26(3)(ii) of Andhra Pradesh Minor Mineral Concession Rules 1966. As such the contention of the petitioner, that none of the respondents possess any power to raise any demand against the finished product and are unconnected with the petitioners business is not correct. It is stated that the petitioner has submitted the details of their purchases from 1-07-2014 to 05-09-2014 and sales from 2.06.2014 to 22.09.2014. As per which the petitioner has purchased 2,28,479.750 Square Feet through 49 transactions from different traders/processed unit holder. After verification of these transactions it reveals that the petitioner has submitted the sale invoice bills of the consignee. But the petitioner did not furnish either the Commercial Tax way Bill/ e-Bill or the Documentary proof in support of having paid Seigniorage Fee due to Government for the purchased granite slabs. Moreover, among the 49 transactions of purchases 33 transaction made from the state of Telangana. These transactions made from the Telangana state requires the evidence of checking/entry exist at boarder Check Post. But as the petitioner did not furnish any documents of Government Bills and no support of boarder entries at Check Posts for the outside State transaction the purchased details are treated as fabricated. Further the petitioner has made 49 transactions of sales from 02-06-2014 to 22-09-2014 covering the quantity of 2,27,975.918 Square Feet. But not 8 produced any documentary evidence having paid the Seigniorage Fee to the Government for sales of granite slabs. Further the petitioner is the registered dealer under Andhra Pradesh Mineral Dealer License Rules 2000. During the period from 2.06.2014 to 22.09.2014, the petitioner has made three transactions covering the quantity of 2050 square feet of granite tiles only. The petitioner has not submitted any returns under Andhra Pradesh Mineral Dealer License Rules 2000 for the sales/ purchases now submitted. Further after verification of the sales transactions made by the petitioner and the details available with the Mines and Geology Department it reveals that the petitioner has sales of 228479.75 Square feet of granite slabs as per Commercial Tax Department Way Bill, whereas they shown the quantities of 2050 square feet granite slabs to the Mines and Geology department. Hence there is a difference of 2,26,429.75 Square Feet of granite slabs sales by the petitioner for which they failed to produce the documentary evidence in token of having paid Seigniorage Fee due to the Government. As such the demand notice was issued to the petitioner. Whereas the petitioner firm is obtained regularly transit passes in Form-E at free of cost for the proportionate quantity from the Asst Director of Mines and Geology, Ongole for their dispatches and also the petitioner is a Registered VAT/CST Dealer. They have to maintain correct and intelligible accounts of their firm as and when required by the concerned departments, failing which attracts penalization as per Rule 26 of Andhra Pradesh Minor Mineral Concession Rules 1966. It is further stated that an evasion of Seigniorage Fee as detailed above and the petitioner shall pay 9 Normal Seigniorage Fee together with five times penalty as stipulated under Rule 26(3)(ii) of Andhra Pradesh Minor Mineral Concession Rules 1966 against the Demand Notice No.1219(6)/V&E/ Ogl/2015-16, dated 11.02.2016 which is contended by the petitioner in the present Writ petition.
8. Heard Smt. N.Shoba and Sri N. Madhava Rao, learned counsels appearing for the petitioners and learned Government Pleader for Mines appearing for the respondents.
9. On hearing, learned counsels for the petitioners while reiterating the contents made in the petitions, submits that, the petitioner is not a manufacturer and therefore the respondent authorities have no powers to enter into its premises. The authorities seem to have verified the number of way bills obtained by the petitioner under the Sales tax for issuance of demand notice. She further submits that the sales made by the petitioner do not attract any of the provisions of the Mines Minerals (Development &Regulation Act) 1957 , A.P Minor Mineral Concession Rules 1966 of AP Mineral Dealers Rules 2000 nor the petitioner fall within the definition of 'Dealer' as mentioned under the A.P Mineral Dealers Rules 2000. Therefore the demand notice is unsustainable as without jurisdiction. She further submits that the State Government or its officials have no powers to exercise control over the processed or finished product to find out whether royalty and dead rent were paid in respect of the mineral and further the explanation of 10 Rule 2(j) by which the processed mineral and finished products are treated as mineral, is declared as Ultra-virus, the rule making power of the State Government and the same was struck out and consequently the definition of declare in Rule 2(1)(d) shall be read down as the exclusive persons who undertakes manufacturing /processing activity using the mineral as raw material.
10. Learned Government Pleader also while reiterating the contents made in the counter submits that the respondents have been insisting on the persons transporting finished products of granite to whom proof of the raw granite suffering seignorage fee and that in the absence of such proof, the lorries are being seized. He further submits that, the Director of Mines and Geology has issued Circular Memo No.20728/MD/90, dated 30.09.2013 stating that, the Government Pleader of Ind. Com. Hon'ble High Court has informed that the Hon'ble High Court passed the orders on the WP No.27094/2013 filed by M/s Siva Sai Granites, Guntur stating that the Hon'ble Court has pointed out that the issue regarding seizure of finished products has already been decided by the Hon'ble High Court in WP No.5871/2001 and batch by judgment dated 13.10.2008. Learned Government Pleader has conceded that the said judgment has become final and the same is holding the field. As per the said judgment, the respondents have no power or authority to exercise any control over manufacturing/processing activity using mineral as raw material except to the extent of inspecting and checking any premises or factory/industry, where the mineral is stored before it is processed 11 manufactured. Learned Government Pleader further submits that the respondents have been insisting on the persons transporting finished products of granite to show proof of the raw granite suffering seigniorage fee and that in the absence of such proof, the lorries are being seized.
11. Rule 2(1)(d) defined 'Dealer' as the person, who holds a Dealers Registration including the mining lease and or quarry lease to whom the leases have been sanctioned as per Mineral Concession Rules, 1960 and the Andhra Pradesh Minor Mineral Concession Rules, 1966 respectively and who intends to deal with minerals other than the minerals sanctioned. Clause (h) of Rule 2(1) defined 'Mineral' as the minerals defined in clause (a) of Section 3 of the Mines and Minerals (Development and Regulation) Act and includes precious and semi-precious and uncut stones, all minor minerals as specified in the Andhra Pradesh Minor Mineral Concession Rules, 1966 and also processed pulverized and finished products.
12. On a perusal of the demand notice dated 11.02.2016 in WP No.15066 of 2016, it is observed that:
In this connection it is here by inform that Under Rule 26(3)(ii) of APMMC Rules 1966 read with "if no documentary proof is produced in token of having paid the mineral revenue due to the Government by any person who used or consumed or in possession of any mineral including the processed mineral, he shall not withstanding anything contained in sub-rule (1) be liable to pay five times of the normal seig.fee as penalty in addition to normal seigniorage fee leviable under the rules."
Also as per Rule 3(2) of the AP Mineral Dealers Rules 2000 read with " No person other than a dealer or a mining lease holder shall buy or sell or offer for sale or engage in any transaction of buying and selling any mineral at any place or transport mineral for purposes of sale or consumption without being registered as a dealer. Provided that no person purchasing and transporting minerals for use or consumption by himself, (where such user or consumption does not involve any commercial activity) and any holder of a mining lease or a quarry lease in respect of 12 the minerals for which he holds a lease, shall be required to register himself as a dealer and every dealer invariably submit form F,G &H as required and a sapplicable under APMDR-2000."
13. The definition of 'Mineral' in clause (h) has been amended as under:
"(h) 'Mineral' means, minerals of all types and varieties including precious and semiprecious and uncut stones and minor minerals as specified in Section 3(e) of the Mines and Minerals (Development and Regulation) Act, 1957 (Central Act 67 of 1957) for the purposes of these rules.
14. Rule 6 envisages obtaining of transit passes by persons desirous of transporting or carrying away any mineral from any place from the Deputy Director of Mines and Geology concerned.
15. The question referred to supra is therefore to be examined in the light of the object with which rule making power is delegated to the State Government. Section 3(a), which defined 'Mineral' is couched in generic but not in precise terms. While defining the 'Mineral', it has neither restricted its width to the raw mineral nor included in its ambit processed mineral.
16. In V.P. Pithupitchai v. Special secretary to the Government of Tamil Nadu1, the Supreme Court, while considering whether sea-shells were 'Minerals' within the definition of Section 3(a) of the Act, held that though the Act did not define 'Mineral', it is judicially interpreted as to mean an inorganic 1 (2003) 9 SCC 534 13 substance found either on or in the earth, which may be generated and exploited for profit.
17. In O.K. Play (India) Limited v. Commissioner of Central Excise-II, New Delhi 2 , while dealing with the validity of central excise levy on the moulding powder derived from Low Density Polyethylene (LDPE) and High Density Polyethylene (HDPE) granules, the Supreme Court held that process of pulverization under which granules are converted into moulding powder constitutes 'Manufacture' and that the moulding powder produced by the said process was marketable. The Supreme Court further held that block and powder are two different primary forms and if the block is pulverized into the powder, the activity would amount to manufacture.
18. In Bhagwan Dass v. State of Uttar Pradesh 3 where the Supreme Court held as under:
"It was urged that the sand and gravel are deposited on the surface of the land and not under the surface of the soil and therefore they cannot be called minerals and equally so, any operation by which they are collected or gathered cannot properly be called a mining operation. It is in the first place wrong to assume that mines and minerals must always be sub-soil 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 S. 3(d) and (e) of the Act of 1957 and R. 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. "Extracting" in turn, means drawing out or obtaining. A tooth is 'extracted' as much as is fruit juice and as much as a mineral. Only that the effort varies from tooth to tooth, from fruit to fruit and from mineral to mineral."2
(2005) 2 SCC 555 3 (1976) 3 SCR869 14
19. The Supreme Court also relied on the judgment of the Supreme Court of United States in Northern Pacific Railway Company v. John A. Sedrbarg4, and extracted para 581, which reads as under:
"The word 'mineral' is used in so many senses, dependent upon the context, that the ordinary definitions of the dictionary throw but little light upon its signification in a given case. Thus, the scientific division of all matter into the animal, vegetable, or mineral kingdom would be absurd as applied to a grant of lands, since all lands belong to the mineral kingdom, and therefore, could not be excepted from the grant without being destructive of it. Upon the other hand, a definition which would confine it to the precious metals - gold and silver - would so limit its application as to destroy at once half the value of the exception. Equally subversive of the grant would be the definition of minerals found in the Century Dictionary: as "any constituent of the earth's crust;" and that of Bainbridge on Mines: "All the substances that now form, or which once formed, a part of the solid body of the earth." Nor do we approximate much more closely to the meaning of the word by treating minerals as substances which are "mined" as distinguished from those which are "quarried", since many valuable deposits of gold, copper, iron and coal lie upon or near the surface of the earth and some of the most valuable building stone, such for instance, as the Caenstone in France, is excavated from mines running far beneath the surface. This distinction between underground mines and open workings was expressly repudiated in Midland R.C. v. Haunchwood Brick and Tile Co. ((1882) 20 Ch Div 55) and in Hext v. Gill ((1872) 7 Ch 699)."
The following ratio could be culled out from the various judicial precedents referred to above:
a) The word 'Mineral' is judicially interpreted, more than it is statutorily defined.
b) The word 'Mineral' is not a term of art, but required to be understood in common parlance depending upon the context in which it is used.
c) The word 'Mineral', understood in common parlance is an inorganic substance found either on or in the earth, which may be garnered or exploited for profit and
d) The mineral changes its character after it undergoes process such as pulverization.
20. Until Section 23 is introduced in the Act, the State Government was empowered to make Rules in respect of minor minerals only. However, under Section 23-C, the State Government is now empowered to make Rules in respect of all minerals for the purpose of preventing illegal mining, transportation and storage of minerals. If we read the definition of 'Mineral' under Rule 2(h) dehors the offending explanation, we find nothing unusual, which can be said to either expand the intended meaning of 'Mineral' in 4 (1902) 47 LAW Ed. 575 15 Section 3(a) of the Act or militates against the meaning of the mineral understood in common parlance. But the explanation, which is added by the amendment takes within its sweep not only the raw mineral but also the product derived from such raw mineral after it undergoes process such as crushing, burning, breaking, drying, cutting, polishing, pulverizing or any other procedure intended to make the mineral fit or suitable for sale or consumption. In effect, the impugned explanation has added to the definition products manufactured from out of the mineral garnered or exploited.
21. A close examination of the provisions of Section 23-C by which the rule making power is entrusted reveals that the said provision itself contains the key in understanding the parameters within which the State Government is empowered to exercise such power. Though I am mindful of the fact that sub- clauses (a) to (g) of Section 23-C (2) which enumerate the matters in respect of which the State Government can exercise its rule making power are illustrative and not exhaustive, still the intention of the Parliament on the broad scope of the power delegated to the State Government is quite reflected from this provision. Since the Rules to be made by the State Government are intended to prevent illegal mining, transportation and storage of minerals, the abovementioned sub-clauses cover only such of those matters, which exclusively pertain to the said domain, eg; under sub-clause (d) Rules to be framed can provide for inspection, checking and search of minerals at the place of excavation, storage or during transit and clause (c) relates to regulation of mineral being transported from the area granted under a 16 prospecting license or a mining lease or a quarrying license or a permit. These two sub-clauses cover the stage of excavation and extraction of mineral from the mining area from where the mineral is transported. Clauses (a) and (b) relate to regulation during transit and transportation by providing for establishment of check-posts and weigh-bridges to measure the quantity of mineral. Clause (e) deals with Rules to be made for maintenance of registers and forms for the purposes of these Rules. Even if these clauses are interpreted in the widest terms, it is not possible to understand them as empowering the State Governments to make Rules regulating the minerals after they underwent process such as polishing, cutting, burning, pulverizing etc. If that were to be the intention of the Parliament, it would not have been difficult for it to add one more sub-clause by bringing within the regulatory fold of the State Governments these activities also.
22. The reason for not making such a provision is not far to seek. The entire domain of regulation of mining activity is taken over by the Union of India as can be seen from the declaration contained in Section 2 of the Act, which is reproduced below:
"2. Declaration as to expediency of Union control:-- It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereafter provided."
23. Though the subject of mines and development of minerals is included in concurrent list as well, as power to legislate under this list is subject to declaration by the Central Government, under entry 54 of List-I, the field is 17 occupied, denuding the State Government of the power to make law covering the areas, which are governed by the Act. The Act, however, empowered State Governments to regulate the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith by making rules in that regard. By inserting Section 23-C the Parliament also empowered State Governments to regulate activity of excavation, transport and storage of all minerals.
24. The three stages, namely, excavation, transport and storage, which alone find mention in Section 23-C, confine the area of rule making power only to control the illicit mining, storage and transportation of mineral. The Legislative intent behind this is very clear, namely, to confine the State Governments rule making power to the pre-processed stage of mineral in conformity with the definition of mineral in Section 3(a) of the Act and as understood by applying common parlance doctrine by the Courts in various decisions referred to above. To attribute any other intention to the Parliament would only lead to anomalous situations.
25. The contention of the learned Government Pleader that the State Government merely explained what is implicit in the definition of 'Mineral' in Section 3(a) of the Act is difficult to be countenanced. There is nothing in the definition of 'Mineral' contained in the Act from which it can be inferred that the processed and finished product derived from mineral also falls in the said definition. There is therefore nothing implicit in the said definition in the Act, to justify the State Government to broaden the scope of the definition of 'Mineral' 18 in purported exercise of its rule making power. As rightly pointed out by the learned counsel for the petitioners, a delegate cannot add to, amend or vary the definition contained in the parent Act.
26. So, in view of the above, the conclusion is irresistible that the explanation to Rule 2(h) by which the processed mineral and final products are treated as 'Mineral' is ultra vires the rule making power of the State Government and the same is accordingly struck down. Consequently, the definition of 'Dealer' in Rule 2(1)(d) shall be read down as to exclude the persons, who undertake manufacturing/processing activity using mineral as raw material. It is, however, made clear that the State Government and its officials authorized for this purpose shall be free to inspect and check any premises or factory/industry where the mineral is stored before it is processed/manufactured and exercise the power of seizure of mineral before it is processed and converted into a finished product, if it is found that such mineral has not suffered royalty and/or dead rent.
Therefore, in view of the foregoing discussion and by following the decisions referred to above, whatever the proceedings issued by the respondents are illegal and arbitrary and the respondents are not entitled to take seigniorage fee on the finished products. Hence, this Court deems fit to allow the present writ petitions while declaring the action of the respondents as illegal and arbitrary.
27. Accordingly, all the Writ Petitions are allowed. The impugned Demand notice No.1219(6)/V&E/Ogl/2015-16, dated 11.02.2016 issued by the 19 3rd respondent in WP No.15066 of 2016 is hereby set aside. Further, the respondents are directed to not to interfere with the business of the petitioners. No costs.
28. As a sequel, miscellaneous applications pending, if any, shall also stand closed.
_________________________ DR. K. MANMADHA RAO, J.
Date : 13 -03 -2025
Gvl
20
HON'BLE DR. JUSTICE K. MANMADHA RAO
WRIT PETITION NO: 27693, 15066 and 22303/ 2016
Date : 13.03.2025
Gvl