S.K. Chattopadhyaya, J.@mdashThe Constitutional Validity of the Cess and other Taxes on Minerals (Validation) Act, 1992 has been challenged by the petitioner in this application. Further prayer has been made to direct the respondents for not deducting royalty from the bills of the petitioner and also to refund the amount which has already been deducted by the respondents from its bill.
2. The petitioner-firm being a registered one, engaged, inter alia, in the business of undertaking construction of various civil engineering works including the rod construction of bridges etc. In response to tender petitioner was entrusted with the works of construction of rural roads and bridges in the District of Singhbhum West. Bills were submitted time to time and same were paid after making deduction on account of royalty. Such deduction of royalty was challenged in various High Courts including that of Patna High Court and ultimately the matter was set at rest by the decision of the Supreme Court in the case of India Cements Limited v. State of Tamil Nadu reported in 1990 SC 85, where it is held that such levy was out-side the legislative competence of the State Legislature. Following the aforesaid decision, the Apex Court in the case of
3. Grievance of the petitioner is that though on the teeth of this direction of the Supreme Court, the respondents could not have deucted royalty but till date they have deducted the same from the bills of the petitioner even without refunding the amount of royalty already recovered by them.
4. Mr. Anil Kumar Sinha, learned Counsel appearing on behalf of the petitioner, has contended that the Act 16 of 1992 (hereinafter referred to as ''the Act), is invalid inasmuch as it violates Articles 14 and 19(1)(g) of the Constitution of India. It is contended that the said Act should be struck down as wholly unreasonable and arbitrary since the levy of cess by the State of Bihar under the Ordinance has already been declared invalid by the Supreme Court and as such, the Validation Act is nothing but to bye-pass the decisions rendered by the Highest Court. In support of his contention, he has strongly relied on the decisions of this Court in the case of Madhttsudan Choudhary v. State of Bihar and Ors. reported in (1996) 1 All PLR 118 and
5. Mrs. Indrani Sen Choudhary, learned SC I, countering the argument of Mr. Sinha, submitted that the petitioner has not made any grievance against deduction of royalty and has only made grievance that the amount of royalty already deducted and recovered by the State of Bihar, has not been returned to the petitioner. Distinguishing the facts and circumstances of the instant case and that of M/s Madhusudan Choudhary (supra) as well as the case of Tata Iron and Steel Company Ltd. (supra), she urged that this Court directed that on filing of clearance certificate the amounts were to be refunded but in this case the petitioner has not produced any clearance certificate and so the grievance of the petitioner is not genuine. According to her, either the petitioner should have produced the clearance certificate showing that its lessee has already paid royalty or must state that no royalty was paid by its lessee. In absence of such certificate from the petitioner, it must pay the royalty as required under the Act.
6. this Court in the case of Tata Iron & Steel Co. Ltd. (supra), while holding that the impugned is valid, has held that taxes collected before 4.4.1991 are not to be refunded under the Act but the Act does not sanctioned the recovery of such taxes after 4.4.1991.
7. It appears that M/s Madhusudan Choudhary and similarly situated company association filed separate writ application before this Court with a prayer to direct the respondents to refund the amount of royalty so deducted from the bills. The Division Bench, having regard to several decisions of this Court, allowed the writ applications filed by M/s Madhusudan Choudhary and Ors. holding that no royalty can be charged from the contractors and accordingly a direction was issued that amount of royalty, deducted from the bills of the contractors, be refunded. Against that order the State Government being aggrieved, preferred Civil Appeal No. 2749-52 of 1988 and other analogous cases before the Supreme Court. The Supreme Court having noticed that submissions made before it either were not made before the High Court or were not taken into consideration, remanded the matter to this Court for consideration on merit. In its remand order the Supreme Court directed as follows:-
That the judgment and order dated 19th March, 1987 of the High Court of Judicature at Patna (Ranchi Bench) Ranchi in C.W.J.C. No. 232 of 1987 (R) in so far it they direct refund of amount recovered from the Respondent here in by the State Government and interest be and is hereby set aside and the matter be and is hereby remanded to the High Court with the direction that the said High Court Do restore to its file C.W.J.C. No. 232 of 1987 (R) and to dispose of the same on merits in the light of the observations made by this Court in its judgment.
That the State Government of Bihar will be bound not to deduct Royalty or Cess from the parties like Respondents herein in respect of minerals from the date of the relevant notifications.
8. Ultimately all controversies regarding validity or otherwise of the said Act reached the Supreme Court and in the case of
The provisions so enacted do create the levy. Indeed, unless the levy is validated, recoveries already made cannot be validated. It is for this reason that the Preamble to the Act says that it is an Act. "to validate the imposition and collection of Cesses and certair other taxes on minerals under certain State laws". Once the provisions, which create the levy, are deemed to have been enacted by Parliament, the levy is very much there with retrospective effect. Once there is a valid levy, not only the taxes already collected need not be refunded but the taxes and cesses which have not already been collected can also be collected.
Repelling the argument that inasmuch as the provisions validated under the impugned Act not only pertain to levy but also to collection and recovery and because all those provisions cease to have effect on and with the 4th day of April, 1991, it must be held that there is no machinery in existence after April 4, 1991, for realising and collecting the uncollected unrealised taxes cesses, their Lordships observed as under:-
There is no levy and there is no machinery to realise the levy after April 4, 1991, it is contended. This argument is urged in support of the contention that the Act merely purport to validate the recoveries already made but does not empower or authorise realisation/recovery of taxes/cesses not already collected. This submission ignores the crucial circumstance that the levy is created by the impugned Act and that the impugned Act continues in force. Sub-section (3) of Section 2 is a firm indication that notwithstanding the cessation of levy after the 4th day of April, 1991, the machinery created to recover and refund the said cesses/taxes is kept alive.
9. From the aforesaid view expressed by their Lordships, it is very much clear that State Governments are not only required to refund the taxes already collected but also entitled to collect the taxes and cesses which have not already been collected.
10. In the instant case, the petitioner has nowhere stated specifically that an amount was deducted from its bill after 4th April, 1991. Even on that account the contention of Mr. Sinha that the impugned Act is only operative upto 4th day of April, 1991 is devoid of merit. In this point their Lordships held as follows:-
We therefore, reject the argument that merely because the levels created by Section 2(1) of the impugned Act are to remain in force only upto 4th April, 1991, the Impugned Act itself can be described as a temporary statute. The Act very much continues in force even today and will remain in force till the Parliament chooses to repeal it.
11. Having given our serious consideration to the facts and circumstances of the case, we are of the view that no relief can be given to the petitioner.
12. In the result, there is no merit in this application and the same is dismissed.
