State of West Bengal vs Kesoram Industries Ltd. & Others (2004)

Case Summary: State of West Bengal vs Kesoram Industries Ltd. & Others (2004)

Law Points Raised:

- Constitutional interpretation of legislative competence under the Seventh Schedule.
- Validity of cess levied on coal-bearing and tea plantation land by State legislations.
- Residual legislative power of the Union under Entry 97, List I of the Constitution.
- Scope of Entries 23, 49, 50, and 66 in List II vis-à-vis Entries 52, 54, and 97 in List I.
- Overlap and repugnancy between Central and State legislation.

[Judgment Source]

https://www.courtkutchehry.com/Judgement/Search/AdvancedV2?docid=282620

Ratio Decidendi:

- The Court clarified the distinction between a tax and a fee.
- Held that 'tax on land and buildings' under Entry 49 List II does not include cess on minerals.
- Entry 50 (taxes on mineral rights) is subject to the Union’s jurisdiction under Entry 54.
- Residual entry cannot override specific entries provided under the Constitution.

Final Ruling:

- The Supreme Court upheld the Calcutta High Court’s judgment.
- Declared State-imposed cesses on coal and other minerals unconstitutional.
- Held that the State Legislature lacked the legislative competence to impose such levies.
- Appeals by the State of West Bengal were dismissed.

Relevant Paragraphs for Reference:

- Para 3: Background and High Court decision.
- Para 6–8: Discussion on nature of entries in Seventh Schedule.
- Para 22–25: Interpretation of tax vs. fee and implications for legislative competence.
- Para 50–54: Judicial reasoning on entries and competence under the Constitution.
- Para 95: Final declaration of lack of legislative competence by State.

Conclusion:

This landmark judgment reinforces the constitutional demarcation of legislative powers, particularly in the domain of taxation and mineral rights. It draws a strict line between the taxing powers of States and the Union, emphasizing the supremacy of Union legislation where entries overlap or conflict.