Case Details: Director of Mines and Geology vs. BMM Ispat Ltd. (2026) 43 Centax 331 (S.C.)
Judiciary and Counsel Details
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- Sanjay Karol & Nongmeikapam Kotiswar Singh, JJ.
- Shri Sanchit Garga, AOR, for the Petitioner.
- Ms Vrinda Bhandari, AOR, for the Respondent.
Facts of the Case
Iron ore had already been mined and extracted and was subsequently put up for sale through e-auction. The successful bidders paid the entire value of the iron ore along with royalty calculated at 10%, which was the rate prevailing at that time. However, before the iron ore was lifted and transported from the stock yard, the Central Government amended the Second Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 and increased the royalty rate on iron ore from 10% to 15% with effect from 1-9-2014. Since the movement of the iron ore took place after the amendment came into force, the additional 5% royalty was deducted from the security deposit. The High Court held that the enhanced royalty was not payable. Aggrieved by the said decision, an appeal was filed before the Hon’ble Supreme Court.
Supreme Court Held
The Supreme Court held that liability to pay royalty is determined with reference to the date of movement of minerals and not the date of auction or contract. Although the entire value of the iron ore and royalty at 10% had already been paid, the actual movement of the iron ore took place after the royalty rate was enhanced to 15%. Since royalty under Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957, is payable upon removal or consumption of minerals, the applicable rate was the rate prevailing on the date of movement of the minerals. A contractual arrangement entered into prior to the statutory amendment could not limit the operation of the enhanced royalty rate. The additional 5% royalty was therefore rightly deducted from the security deposit, and the judgment of the High Court was set aside.
List of Cases Cited
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- BMM Ispat Ltd. v. Department of Mines & Geology — Writ Petition No. 57901 of 2016 (GM-MM-S), decided on 29-11-2016 by Karnataka High Court — Referred [Para 3.7]
- Mineral Area Development Authority v. Steel Authority of India — (2024) 21 Centax 378 (S.C.) — Relied on [Paras 8, 9, 12]
- Samaj Parivartana Samudaya v. State of Karnataka — 2018 (10) G.S.T.L. 526 (S.C.) — Referred [Paras 3.1, 8]
- Tarkeshwar Sio Thakur Jiu v. Dar Dass Dey & Co. — (1979) 3 SCC 106 — Relied on [Para 9]
List of Cases Reviewed
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- BMM Ispat Ltd. v. Director of Mines & Geology — Writ Petition No. 6979 of 2017 (GM-MM-S), decided on 18-3-2019 by Karnataka High Court — Reversed [Paras 2, 3.8, 4, 10]
