Document Fragment View

Matching Fragments

13. The legislations are Orissa Mining Areas Development Fund Act, 1952 (Act 27 of 1952), and Orissa Cess Act, 1962 (Act 2 of 1962) as amended by Act 40 of 1966. Of the two, the earlier legislation Act 27 of 1952 came up for consideration before this Court on two occasions. On the first occasion, Orissa Mining Areas Development Fund Act, 1952 (Act 27 of 1952) was considered in the light of the Mines and Minerals (Regulation and Development) Act, 1948 (Central Act 53 of 1948). In Hingir Rampur Coal Company v. State of Orissa & Ors., 1961 (2) SCR 537, the cess or fee on minerals, levied by the Orissa Act was held to be neither a tax nor a duty of excise but a fee. The question turned on the impact of MMRD Act, on the States power to levy fee under Entry 66 read with Entry 23 of List II as a consequence of the declaration contained in section 2 of the Central Act 53 of 1948. The Court held that the declaration by Parliament in terms of Entry 54 of List I of the Seventh Schedule operated as a limitation on the legislative competence of the State Legislature itself. The Court was inclined to the view that if Central Act 53 of 1948 contained the declaration referred to in Entry 23 of the List II, there would be no difficulty in holding that the declaration covered the field of conservation and development of minerals and the said field was indistinguishable from the field covered by the Orissa Act. But it was found by the Court that the declaration made by section 2 of the Central Act (Act 53 of 1948) did not constitutionally amount to the requisite declaration by "Parliament" and that the declaration did not cover the field covered by the Orissa Act, and so the limitation im- posed by Entry 54 of List I does not come into operation. On the second occasion, when Orissa Act 27 of 1952 came up for consideration of this Court in State Orissa v. MA. Tulloch & Company, AIR 1964 SC 1284 = 1964 (4) SCR 461, "MMRD Act " of 1957 (Central Act 67 of 1957) had been enacted in place of the earlier 1948 Act. The validity of the very same cess was considered in the light of the declaration in section 2 of the M.M.R.D. Act of 1957 (Central Act 67 of 1957) and this Court held after a detailed analysis of the State Act as well as the Central Act, that the levy of cess under the Orissa Act was invalid from 1.6.1958, on which date the MMRD Act of 1957 came into force. This Court reached the conclusion that the Central Act 67 of 1957 contained the requisite Parliamentary declaration in section 2 of the Act to occupy the entire field of legislation covered under Entry 54 of List I, and since the aforesaid Central Act covered the same field as the State Act of 1952 in regard to mines and mineral development, the earlier decision in Hingir Rampur Coal Company v. State of Orissa & Ors. AIR 1961 SC 549, con- cluded the matter and the State legislature was denuded of its powers to enact any law on the subject. It is thereafter, Orissa Cess Act, (Act 2 of 1962), as amended, was enacted, and it came up for consideration before this Court in Orissa Cement Ltd. v. State of Orissa, AIR 1991 SC 1676 = 1991 Supp. (1) SCC 430. By then, the law on the subject has been considered in detail by a 7-Judge Bench of this Court in India Cement Ltd. & ors. v. State of Tamil Nadu & ors. 1989 Supp. (1) SCR 692 = 1990 Suppl. (1) SCC 12. The matter was also discussed in detail in Orissa Cement case (supra). Section 4 of the Orissa Act, (Act 2 of 1962), as amended in 1976, imposed a cess on all lands (including mineral lands) determined and payable as provided in the Act. With regard to lands held for carrying on mining operations, in relation to any mineral, the amendment of section 5 (2) (a) of the Act read with the Notification issued, prescribed a percentage of the royalty or the dead rent, (as the case may be) as the cess in respect of various items of specified minerals. The Court held that the measure of the levy is the royalty paid in respect of the land by the assessee to his lessor, and considering the change in the scheme of taxation effected in 1976, the importance and magnitude of the revenue by way of royalties received by the State, the charge of the cess as a percentage and, indeed, as multiples of the amount of the royalty, and the mode and collection of the cess amount along with the royalties and as part thereof, would point out that the legislation in that regard is with respect to royalty rather than with respect to land. It was held that the levy could not be justified under Entries 45, 49 and 50 of List II of the Seventh Schedule. Even if the levy was one which could fall under Entry 50 of List II, it was held that the MMRD Act of 1957 covered the entire field and so the State legislation to the extent it encroached on the field covered by MMRD Act of 1957, will be ultra vires. Sections 5, 6 & 7 of Orissa Act, (Act 2 of 1962) as amended in 1976, were held to be beyond the competence of State legislature in view of the Parliamentary declaration contained in MMRD Act of 1957 (Central Act 67 of 1957). It is only appropriate to notice in this connection that under section 8 of the Orissa Cess Act 1962 read along with sections 18 & 19 of the Orissa Surveys and Settlement Act, lands, except those held for carrying on mining operations, were subject to levy of cess depending upon the "surface characteristics" of the land, whereas the levy on lands held for carrying on "mining operations" was made on the basis of "minerals extracted" in view of the amendment of Orissa Cess Act, 1962 by Act 42 of 1976.

14. In order to meet the situation, the State of Orissa enacted the instant legislation -- The Orissa Rural Employment, Education and Production Act, 1992. The speech made by the Minister in moving the Bill will throw light on the objects of the Act and the main purposes which the legislation sought to achieve. It is contained in the paper book (vol. C) Annexure 1, pages 10-12. The relevant portions of the same are as follows:-

"... this Bill has been brought to increase the income of the State or to compensate the loss that the State Exchequer has lost due to Orissa Cement Case, a Judgment pronounced by the Supreme Court. By virtue of that judgment, the State lost nearly Rs. 150.00 crores and for a State like ours losing Rs. 150.00 crores is not a small thing. Even though the Central Government later on revised the rate of royalty on coal and thereby loss could be compensated to the extent of Rs. 30 to Rs. 40 crores, still we are in short of Rs. 100.00crores. Because of that judgement, Government has come out with this Bill for imposing tax on all types of land, agriculture, non-agriculture including mineral bearing lands. You know under item 49 of the State list of the Constitution of India, the State is empowered to impose tax on lands and exercising power this Bill has been brought, wherein Government once assume the power of imposing tax on all lands. However, State have taken all steps to safeguard the interest of the cultivators and agriculturists. Provision has been made in the Bill that under the Orissa Cess Act, 1962 one who has paid tax/cess will not be further liable to pay tax under the present Bill. Therefore there should be no apprehension in the mind of the Hon'ble Members that either it will be double taxing or the cultivators who have already over- burdened with tax will be further liable to pay any tax. Stress has been given on imposing tax particularly on the mineral bearing lands. You know, Sir, ours is a State which is full of mineral resources. Even though we are rich in that way we are unable to exploit our minerals and increase the income of the State because of several legal hindrances, constitutional and statutory. Therefore, we have to act within the purview of the law which authorises the State Government to impose tax and take resort to that and keeping in view the Orissa Cement Case and India Cement case, the two judgments of the Supreme Court, this Bill has been introduced. "

Though the charging section provides for a levy on all lands, land which is liable to payment of tax under the Orissa Cess Act, 1962 shall not be liable to payment of the rural employment, education and production tax. Section 4 of the Orissa Cess Act, 1962, as it originally stood, is as follows:

"4. All lands to be liable to payment of cess.
(1) From and after the commencement of this Act all lands shall be liable to the payment of cess determined and payable as herein provided:
(b) houses or buildings."

16. From the above, it will be seen that the combined effect of section 3(1) of Orissa Act 36 of 1992 and the Orissa Cess Act of 1962, as amended by Act 10 of 1994, is that only mineral bearing land and coal bearing land will be subject to the levy of tax under Orissa Rural Employment, Education and Production Act, 1992 (Orissa Act 36 of 1992). It is not all types of land that will be subject to the levy but only the two types of land mentioned above which will be caught by the taxing-net. This is in accord with what the Hon. Minister stated in introducing the Bill to the effect that "stress has been given on imposing tax particularly on the mineral bearing lands." The earlier levy in that regard was rendered futile by the decisions referred to by the Hon. Minister himself in his speech and the main purpose of the legislation was only to levy the tax on mineral bearing and coal bearing lands. We may incidentally observe that it is common ground that 85% of the coal bearing lands are in "F" and "G" category in the State of Orissa.