Bharat Aluminium Company Ltd. v. Union of India

8. Since the administration of MMDR Act with the Ministry of Mines is limited to minerals other than coal, lignite and sand for stowing, it is assumed that the notification did not relate to these three minerals.

9. The notification dated 17^'^ September,2015reads asfollows: "MINISTRY OF MINES NOTIFICATION New Delhi,the l?"*September,2015 G.S.R. 715(E).—^In exercise of the powers conferred by sub sections (5) and (6) of Section 9B of the Mines and Minerals (Development and Regulation)Act,1957(67 of1957),the Central Government hereby makes the following mles specifying the amount to be paid by holder of a mining lease or a prospecting licence-cum-mining lease,in addition to the royalty,to the District Mineral Foundation of the district established by the concemed State Govemment by notification, in which the mining operations are carried on,namely:—

1. Short title and commencement.—(1) These rules may be called as the Mines and Minerals(Contribution to District Mineral Foundation)Rules,2015. th (2)These rules shall be deemed to have come into force on the 12 day ofJanuary,2015.

2. Amount of contribution to be made to District Mineral Foundation.—^Every holder of a mining lease or a prospecting licence-cum-mining lease shall, in addition to the royalty, pay to the District Mineral Foundation ofthe district in which the mining operations are carried on,an amountatthe rate of— (a)ten per cent ofthe royalty paid in terms ofthe Second"Schedule to the Mines and Minerals(Development and Regulation)Act, 1957(67 of1957)(herein referred to asthe said Act)in respect T.C.(C)Nos.43/2016 etc.etc. Page9of34 of mining leases or, as the case may be, prospecting licencecum^mininglease granted on or after 12*^January,2015;and (b)thirty per cent of the royalty paid in term of the Second Schedule to the said Act in respect of mining leases granted before 12"^ January,2015."

10. On 20'*^ October,2015 the Ministry ofCoal issued a notification promulgating the Mines and Minerals.(Contribution to District Mineral Foundation)Rules,2015.^ The Contribution Rules are deemed to have come into force on the date oftheir publication in the Official Gazette., These rules pertain to payment to the DMF atthe same rate and on the same terms as mentioned in the notification dated 17'*'September,2015. The subject notification, having been issued by the Ministry of Coal,, specifically mentioned thatthe rules were in respect ofcoal,lignite and v.sand for stowing.

11. What is of significance in the notification dated 20^ October, 2015 is paragraph 3 thereof. This provides that the amount payable to the DMF shall be paid from the date of the notification issued under Section 9B(1)ofthe MMDR Act by the State Government establishing the DMF or the date of coming into force of the Contribution Rules, whichever is later. The notification dated 20"" October,2015 reads as follows: The administration ofthe MMDR Actis with the MinistryofCoalforcoal,lignite and sand forstowing. I.e.(C)Nos.43/2016 etc.etc. Page 10of34 "MINISTRY OF COAL New Delhi,the 20'''October,2015 G.S.R. 792(E).—In,exercise of the powers conferred by sub sections (5) and (6) of Section 9B of the Mines and Minerals (Development and Regulation)Act,1957(67 of1957),the Central Government hereby makes the following rules in r/o of coal and lignite and sand for stowing specifying the aniount to be paid by holder of a mining lease or a prospecting licence-cum-mining lease,in addition to the royalty,to the District Mineral Foundation of the district established by the concerned State Government by notification, in which the mining operation are carried on, namely:—

1. Short title and commencement.—(1) These rules may be called as the Mines and Minerals(Contribution to District Mineral Foundation)Rules,2015. ' (2) These rules shall be deemed to have come into force on the date oftheir publication in the Official Gazette.

2. Amount of contribution to be made to District Mineral Foundation.—Evefy holder of a mining lease or a prospecting licence-cum-mining lease in respect of coal and lignite and sand for stowing shall, in addition to the royalty, pay to the District Minera!Foundation' Of the district in which the mining operation are carried on,an amountatthe rate of:— (a)ten per cent ofthe royalty paid in term ofthe second schedule to the Mines and Minerals(Development and Regulation)Act, 1957(67 of1957)(herein referred to as the said Act)in respect of mining lease or, as the case may be, prospecting licencecum-niining lease granted on or after 12"'January,2015;and (b)thirty per cent of the royalty paid in term of the Second Schedule to the said Act in respect of mining lease granted before 12"'January,2015.

3. Date from which contribution to be made.—^The amount calculated at the rate prescribed in rule 2 shall be paid from the T.C.(C)Nos.43/2016 etc.etc. Page 11 of34 date of notification issued under Section 9B(1)ofthe Act by the State Government establishing District Mineral Foundation or the date ofcoming into force ofthese rules,whichever is later."

12. The Ministry ofCoal issued another notification on 31®'August, 2016 substituting paragraph 3 of the notification dated 20'*' October,

2015. The substituted paragraph provided that payment under the notification dated 20"' October, 2015 shall be made to the DMF with effect from 12'" January, 2015, The notification dated 31®' August, 2016 reads as follows:, "MINISTRY OF COAL New Delhi,the 31®'August,2016 G.S.R; 837(E).-^In exercise of the powers conferred by sub sections (5) and (6.) of section 9B of the Mines and Minerals (Developmentand Regulation)Act,1957,(67of1957),the Central Government hereby makes the following rules in respect ofcoal, lignite and sand for stowing, to amend the Mines and Minerals (Contribution to District Mineral Foundation) Rules, 2015, namely

1. Thgse rules may be called as the Mines and Minerals (Contribution to DistrictMineralFoundation)(Amendment)Rules, 2016. In the Mines and Minerals (Contribution to District Mineral Foundation) Rules, 2015, for rule 3, the following rule shall be substituted,namely:- "3.Date from which contribution to be made. - The amount calculated at the rate specified in rule 2 shall be paid with effectfromthe 12'"January,2015." T.C.(C)Nos.43/2016 etc.etc. Page 12of34 Questions raised by the petitioners

13. On the basis of these notifications, the questions raised by learned counsel for the petitioners are: Firstly,whether the DMFs could be established with effectfrom 12*^ January,2015? Secondly, whether contributions to the DMFs were required to be made by the petitioners at the rate mentioned in both sets of Contribution Rules with effect th from 12 January, 2015? The validity of the notifications was challenged or was under challenge to this extent depending on their interpretation and theirimpact and effect.

(i) The first question

14. In terms ofsub-section(1)ofSection 9B the State Governmentis required to establish a trust as a non-profit body and thattrust would be called the District Mineral Foundation. For establishing the trust the State Governmentis required to issue a notification.Itis entirelyfor the •State Governmentto decide the date from which to setup the trust.The Central Governrnent has no role to play in this,although a direction was issued by the Central Governmentto the State Governments to establish a trust with effect from 12"^ January,2015. But be that as it may,the State Governments did issue a notification establishing the DMF f' T.C.(C)Nos.43/2016 etc.etc. Page 13of34 1some with effectfrom 12^^ January,2015 and some with effectfrom the date ofthe notification establishing the DMF.

15. The submission oflearned counsel for the petitioners is that the DMF could not have been established from a retrospective date prior to the date ofthe notification.

16. To answer this issue,it is necessaty to first ofall decide whether the DMF has in fact been established retrospectively. The learned Additional Solicitor General submitted that the DMFs, were not established with retrospective effect. His contention was that under Section 9B ofthe MMDR Abtthe DMF could be established with effect fli' from 12 January, 2015 or any date thereafter. Sorne States chose to issue a notification establishing the DMF from an anterior date(12^ m January,2015)while some others did not,notwithstanding the direction of the Central Government. According to the learned Additional Solicitor General establishing the DMF from a date anterior to the date of the notification did not mean that the DMF was established with retrospective effect. He relied on a decision ofthe Constitution Bench of this Court in A. Thangal Kunju Musaliar v. M. Venkitachalam Potti in supportofhis contention. (1955)2 SCR 1196 T.C.(C)Nos.43/20i[6] etc.etc. • Page 14of34 (g)

17. Musaliar advances the case of the learned Additional Solicitor General. The Constitution Bench acknowledged that the general law is that a statute comes into force on the day it received the assent ofthe competent authority. However that date could be postponed if so provided in the statute. In Musaliar the statute provided that it was to come into force on a date notified in the Government Gazette. Since the statute was passed by the Legislature on 7'^ March,1949 it would have ordinarily come into force on that date but by virtue ofSection 1(3)of the statute, a notification was issued oh 26^ July, 1949 bringing the statute into force on 22"^* July, 1949 a date obviously later than 7^ March, 1949. The Constitution Bench held that the notification did not % prejudicially affect any vested rights and (by implication) its retrospective operation could not be looked upon with disfavour. Moreover,the operation ofthe statute was not from a date prior to its passing and so it could not be said to have retrospective operation. Fixing a date anterior to the date ofthe notification bringing the statute into force did not attract the principle of disfavouring retrospective operation.The Constitution Bench however did not consider the further submission of the learned Attorney General that the notification was good to bring the statute into operation from the date ofissue'of the T.C.(C)Nos.43/2016 etc.etc.' Page 15of34 (2> % notification. The law laid down by the Constitution Bench is quite explicit,when it was held: "The reason for which the Court disfavours retroactive operation of laws is that it may prejudicially affect vested rights. No such reason is involved in this case. Section 1(3) authorises the Government to bring the Act into force on such, date as it may,by notification,appoint.In exercise ofthe power confeited by this section the Government surely had the power to issue the notification bringing the Actinto force on any date subsequent to the passing ofthe Act.There can therefore,be no objection to the nQtification fixing the commencement of the. Act on the 22nd July, 1949 which was a date subsequentto the passing ofthe Act. So the Act has not been given retrospective. operation, that is^ to say, it has not been made to commence.;from a date prior to the date ofits passing. It is true that the date of commencement as fixed by the notification is anterior to the date of the notification but that circumstance does not attract the principle disfavouring the retroactive operation ofa statute. Here there is no question of affecting vested rights. The Operation of the notification itself,is not retrospective. It only brings the Act into operation on- and frOm an earlier date. In any case it was in terms ' authorised to issue the notification bringing the Act into force on any date subsequentto the passing ofthe Act and that is all thatthe Government did.In this view ofthe matter,thefurther argument advanced by the learned Attorney-General and which found favour with the Court below,namely,that the notification was at any rate good to bring the Act into operation as pn^and from the date ofits issue heed not be considered."(Emphasissupplied byus)

18. The notifications establishing the DMF in the States mentioned in the table above were issued pursuant to the provisions OfSection 9B ofthe MMDR Act The iiitpntion ofParliament appears to have been for the State Govemments to establish the DMF with effect from 12*'^ January,2015 since its object is to work for the interest and benefit of 5^ k persons and areas affected by mining related operations. The object being the welfare ofthose adversely affected by mining operations,the DMFs ought to have been established on 12^^ January,2015.However, not surprisingly, every State Government took it easy (including to a lesser extent the State Govemments of Madhya Pradesh, Odisha and Telangana) compelling the Central Government to issue a direction under Section 20A of the MMDR Act on 16'^' September, 2015 requiring the State Governments to issue a notification that the DMF shall be deemed to have come into existence with effect from the 12^ January,2015.

19. In any event, even assuming that since the DMFs were established from a date anterior to the date of the notification and # therefore they.....were established with retrospective effect, their establishment did not adversely affect anybody's vested rights (as will be seen later). This is crucial. Therefore there can be no real objection to the operation ofthe notifications from 12^*^ January,2015 in view of the decision in Musaliar. The DMFs were not established from a date ill prior to 12 January, 2015 and to that extent cannot be said to have been established with retrospective effect.

20. Assuming the DMFs were established with retrospective effect- T.C.(C)Nos.43/2016 etc.etc. Page 17of34 is that permissible in law? This question really does not arise in the view that we have taken following Musaliar but since it was vehemently argued by learned counsel by citing several decisions, we briefly give our views.

21. The power to give retrospective effect to subordinate legislation whether in the fonn ofrules or-regulations or notifications has been the subject matter ofdiscussion in several decisions rendered by this Court and it is not necessary to deal with all ofthem-indeed it may not even be possible to do so. It would suffice if the principles laid down by some of these decisions cited before us and relevant to our discussion are culled out. These are obviously relatable to the present set ofcases and are not intended to lay down the law for all cases ofretrospective operation ofstatutes or subordinate legislation. The relevant principles are;

(i) The Central Government or the State Government(or any other authority) catmot make a subordinate legislation having retrospective effect unless the parent statute, expressly or by necessary.implication, authorizes it to do so.{Hukum Chand v. Union ofIndia^ and Mahabir Vegetable Oils(P)Ltd. v.State of "(1972)2see601 T.C.(C)Nos.43/2016 etc.etc. Page 18of34 \ Haryana^).

(ii) Delegated legislation is ordinarily prospective in nature and a right or a liahility created for the first time cannot be given retrospective effect. (PanchiDeviv.StateofRajasthan^).

(iii) As regards a subordinate legislation conceming a fiscal statute, it would not be proper to hold that in the absence of an express provision a delegated authority can impose a tax or a fee. There is no scope or any room for intendment in respect of a compulsory exaction from a citizen. {Ahmedabad Urban Development Authority v. Sharadkumar Jayantikumar Pasawalla^ and State ofRajashtan v. BasantAgrotech (India) Limited}).

22. A much more erudite, general and broad-based discussion on the subject is to be found in the Constitution Bench decision in Commissioner of Income Tax (Central) - I v. Vatika Township Private Limited. and we.are obviously bound by the conclusions arrived at therein. It is not at all necessary for us to repeat the discussion and the conclusions arrived at by the Constitution Bench in (2006)3see620 (2009)2see589 ^(1992)3see285 ®(2oi[3])15see[1] ®(2015)1see 1 T.C.(C)Nos.43/2016 etc.etc. Page 19of34 the view that we have taken except to say that our conclusions do not departfrom the conclusions arrived atby the Constitution Bench.

23. On the facts before us, it is clear that Section 15 ofthe MMDR Act empowers the State GoVemment to make rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith. This section does riot specifically or by necessary implication empower the State Govemmentto frame any rule with reti^ospective effect. Also,the MMDR Act does not confer any specific power on the State. Govemment to fictionally create the DMF deeming it to be in existence from a date earlier than the date of the notification establishing the ^ DMF.Therefore,itmustfollowthatundertheprovisionsoftheMMDR Act that we are concemed with,no State Govemment has the power to frame a mle with retrospective effect or to create a deeming fiction, either specifically or by necessaryintendment.

24. Similarly, Section 13 of the MMDR Act does not confer any specific power on the Central Govemment to frame any rale with retrospective effect; Section 9B(5) and (6) read with clause (qqa) inserted iii Section 13(2) of the MMDR Act enable the Central Govemment to make rales to provide for the amount ofpaymentto be T.C.(C)Nos.43/2016 etc.etc.. Page 20of34 made to the DMF established by the State Government under Section 9B(1) ofthe MMDR Act. None ofthese provisions confer any power on the Central Government to require the holder ofa mining lease or a prospecting licence-cum-mining lease to contribute to the DMF with retrospective effect. Therefore, even the scope and extent of the rule making power ofthe Central Governmentis limited.

25. In view ofthe position in law as explained above and the factual position before us, the notifications issued by the State Governments must be understood to mean (assurning the DMF could not be established with effect from 12'*'January,2015 by a notification issued on a later date)thatthe DMF was established on the date ofpublication of each notification. This is reflective of the further submission of the # learned Attomey General in Musaliar that was not considered by the Constitution Bench.In.our opinion this submission can be extrapolated to the facts ofthe cases before us and ifwe do so,we find it well taken. To the extent possible, the validity ofa mle,regulation or notification should be upheld. It is not obligatory to declare any notification ultra vires the rule making power ofthe State Government ifits validity can be saved without doing violence to the law. In these cases, we are of opinion that it is not obligatory to declare the notifications ultra vires T.C.(C)Nos.43/2016 etc.etc.' Page 21of34 the rule making power of.the State Governmentsto the extentoftheir establishingtheDftFfrom a retrospective date,since,wecansavetheir validity by reading them as operational from the date of their publication. In any event,no prayer was made before us for striking downthe establishmentoftheDMFassuch.

26. Therefore-Ouranswerto thefirstquestionisthattheDMFswere notestablishedreirospectivelyeventhoughthe.notificationsestablished themfrom adate anteriortothedateofIhenotifications-butnotbefore.the date ofthe Ordinance. Assuming the DMFs were established with retrospective effect from 12"January, 2015 it is ofno consequence smce the retrospective establishment does not prejudicially affect the interests,ofanybody(as.will beseen later).In this view of.the matter, # the notifications do not violate the law laid down in Musaliar and Vatika Township. Even otherwise, their validity can be saved by readingthemas operationalfromthedateofpublication.

(ii) Thesecond question

27. Leamed counsel for the petitioners submitted that assuming the issue of retrospective operation of the notifications and the establishment of the DMFs is decided against them, even then the petitioners cannot be compelled to make the contribution for a period T.C.(C)IMos.43/2016etc.etc.' % prior to the date of the relevant notifications, that is, 17^'' September, tVi • • 2015 and 20 October, 2015 (as the case may be). For this purpose, reliance was placed on M/s Govind Sarati Ganga Saran v. CommissionerofSales Tax^^ and Vatika Township.

28. In Govind Saran Court was concerned with the taxation of goods under Sections 14 and'15 ofthe Central Sales Tax Act,1956(the CST Act) and the assessment made under the Bengal Finance (Sales Tax)Act, 1941 as applied to the Union Territory ofDelhi. Section 15 of the CST Act reads; "15.Every sales tax law ofa State shall,insofar as it imposes or authorizes the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions,namely: (a)the tax payable under that law in respect of any sa:le or purchase of such goods inside the State shall not exceed three percent of the sale or purchase price thereof, and such tax shall not be levied at morethan one stage." This Court noted that Section 15 of the CST Act prescribed the maximum rate oftax that could be imposed and that such tax shall not I be levied at more than one point. Expanding on these requirements,this Court observed in paragraph 6ofthe Report as follows: "The components which enter into the concept ofa tax are well kno;TO.The first,is the character ofthe imposition known byits 1985(Supp)see 205 T.C.(C)Nos.43/2016 etc.etc. Page 23of34 nature which prescribes the taxable event attracting the levy, the second is a clear indication ofthe person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed,and the fourth is the measure or value to which the rate will be applied for computing the tax liability. If those components are not clearly and definitely ascertainable,it is difficult to say thatthe levy exists in point of law. Any uncertainty or vagueness in the legislative scheme defining any ofthose components ofthe levy will be fatal to its validity."(Emphasis supplied by us)

29. After the above observations,this Court primarily dealt with the absence ofspecifying the single point at which the tax liiight be levied and held that the prerequisite ofSection 15 ofthe GST Act that the tax shall not be levied at more than one stage had not been satisfied. Therefore, it quashed the assessment complained of and allowed the appeal ofthe assessee.

30. In Vatika Township the Constitution Bench was concerned with # the impact ofthe proviso appended to Section 113 ofthe Income Tax Act,1961 inserted by the Finance Act.^^ The rate ofsurcharge was not specified in the proviso nor the date for the levy. The consequence of this was that some assessing officers were not levying any surcharge and those who were levying surcharge adopted different dates for the

113. Tax in the case of block assessment of search cases.-The total undisclosed income of the block period,determined urider Section 158BC,shali be chargeable to tax atthe rate ofsixty percent: Provided that the tax chargeable under this section shall be increased by a surcharge,if any,levied by any Central Act and applicable in the assessment year relevant to the previous year in which the search is initiated under section 132orthe requisition is made undersection 132A. I.e.(C)Nos.43/2016 etc.etc.. Page 24of34 levy. In this context it was held that the rate at which a tax or for that matter a surcharge is to be levied is an essential component ofthe tax regime; The decision in Govind Saran was referred to by the Constitution Bench, particularly the passage extracted above. It was further held:"It is clear from the above that the rate at which the tax is, to be,imposed is an essential:componentoftax and where the rate is not stipulated or it cannot,be applied with precision,it would be difficultto tax a person."

31. We may also, note a similar view expressed in Principles of Statutory Interpretation hy "SusXicQ G.P. Singh^^ that:"There are three components,ofa taxing statute, viz. subject ofthe tax, person liable to pay the tax and.the rate at which the tax is levied.Ifthere be any real ambiguity in respect of any of these components which is not removable by reasonable construction,there would be no tax in law till the defectis removed bythe legislature."

32. In view,ofthe decision of the Constitution Bench,of this Court that the specification ofthe rate oftax(or any compulsory levy for that matter) is an essential component of the tax regime, it is difficult to agree with the learned Additional Solicitor General that specifying the 12 - -ih 14 edition revised byJusticeA.K..Patnaik,formerJudge,Supreme CourtofIndia,page'876

4. E^ maximum amount ofcompensation to be paid to the DMF in terms of Section 9B of the MMDR Act, being an amount not exceeding onethird ofthe royalty, satisfies the requirements oflaw. What is required by the law is certainty and not vagueness - not exceeding one-third could mean one-fourth or one-fifth or some other fraction. It is this uncertainty that is objectionable.

33. Therefore, our answer to the second question is that the petitioners are notliable to make any contributionto theDMFfi*om 12^^ January,2015. Crucial date for making the contribution to the DMF

34. Whatthen is the crucial date for making the contribution? There are two categories ofholders ofa mining lease or a prospecting licencecum-mining lease. We will consider the effect of the notifications on each such category. Lease holders for minerals other than coal, lignite and sand for stowing

35. On 17'^ Septemberj 2015 the Ministry of Mines in the Central Govemmentissued a notification regarding the contribution to the DMF in respect ofminerals other than coal,lignite and sand for stowing.The rate at which the contribution was required to be made by the holder of T.C.(C)Nos.43/2016 ete.etc.. Page 26of34 a mining lease or a prospecting licence-cum-mining lease is specified in the notification.Although,the notification provides that the contribution is payable from 12^^ January, 2015 in view ofour conclusion that the contribution to the DMF cannotbe with retrospective effect,it would be payable only from the date ofthe notification,that is, 17'*' September, 2015 even though the DMF was established or deemed to be established N with effectfrom 12^*^ January,2015.

36. The further question raised by leamed counsel for the petitioners in this regard was: How can the contribution be made to an entity like the DMF that was established only on a date subsequent to l?'^ September,2015(exceptfor the States ofMadhya Pradesh,Odisha and ^ Telangana)?Canthecontributionbepaidto anon-existenttrust?

37. We are afraid this line ofquestioning does not appeal to us. The object of the DMF is "to work for the interest and benefit ofpersons, and areas affected by mining related operations". The purpose of Section 9B of the MMDR Act and the object of the DMF are in furtherance of the cause of social justice for those affected by the mining related operations-including tribals who may be dislocated or displaced from their habitat. To deny them a benefit that is rightfully theirs only because the State Government has been lax in establishing T.C.(C) Nos.43/2016 etc.etc.' Page 27of34 0 y the DMF would be doing injustice to them.

38. Additionally, Section 9B of the MMDR Act creates a liability and only the quantum ofthe liability remained to be determined. That determination came on the issuance of the notification of September,2015. The fact that it would take time(even more than a year as in the case of Tamil Nadu and Uttar Pradesh)for the benefit to reach the affected persons cannot detract from the liability of the petitioners to contribute nor does it absolvethem oftheir liability to pay the contribution. The only criticism could be ofthe tardiness and lack of concern by State Govermhents in setting up the DMF in spite of the direction ofthe Central Government. 1^

39. In A. Prabhakam Reddy v. State ofMadhya Pradesh one of. the questions raised was that since the Madhya Pradesh Building and Other Construction Workers Welfare Board came to be constituted only on 9^'^ April, 2003 the recovery of cess under the Building and Other Construction Workers Welfare Cess Act, 1996 with effect from 1®* April, 2003 did not arise. On this basis, the requirement to pay cess was challenged.

40. This Court rejected the contention and held that after the Cess (2016)1see 600 r.c.(C)Nos.43/2016 etc.etc. ' Page 28 of34 Act and the rules framed thereunder came into effect and the Workers Welfare Board was constituted and the rate of cess was notified, the State was under an obligation to collect the cess in respect ofon-going projects. The fact that passing on the benefit to the workers might take some time had no impact on the liability to pay the cess.It was further held that: "Any other interpretation would defeat the rights of the workers whose protection is the principal aim or primary concern and objective ofthe BOCW Actas well as the Cess Act." 41.. We hold, therefore, that the effective date of payment of contribution to the DMF in the case of those petitioners who are (or were) holders of a mining lease or a prospecting licence-cum-mining lease for minerals other than coal,lignite and sand for stowing would be 17*September,2015. Lease holdersfor coal,lignite and sand for stowing

42. The position with regard to contribution to the DMF by the • holders ofa mining lease or a prospecting licence-cum-mining lease for coal,lignite and sand for stowing is quite differentfrom the situation of the other holders ofa mining lease or a prospecting licence-cum-mining lease. The reasofifor this is to be found in the text ofparagraph 3 ofthe notification of20^^ October,2015 which is veryexplicit.Itprovidesthat T.C.(C)Nos.43/2016 etc.etc. Page 29of34 the contribution,though payable,shall be paid onlyfrom the date ofthe notification (20. October,.2015) or from the date of establishment of the DMF in the concerned State, whichever is later. Therefore, only Madhya Pradesh, Odisha and Telangana would be entitled to the contribution from holders of a mining lease or a prospecting licencecum-mining lease frorh 20^ October, 2015 since their DMF was established much earlier. As far as all other States are concerned, the holders of a mining lease or a prospecting licence-cum-mining lease could claim to postpone payment to the DMF till it was established, as per the notification issued by the State Government.

43. It is true that many notifications establishing the DMF provided the date ofestablishment as 12"* January,2015 but as mentioned earlier the rule making power of the Central Government and the State Government under the MMDR Act does not permit retrospective operation of subordinate legislation. It cannot also be said that the Contribution Rules have retrospective operation by necessary implication. Even this occasion does not arise. Furthermore, as held above, the rate at which the contribution was to be paid came to be notified only on 20'^ October, 2015. Therefore in view of the law discussed above, it cannot be said that the contribution should be paid T.C.(C)Nos.43/2016 etc.etc. Page 30of34 by the holders of a.mining lease or a prospecting licence-cum-mining lease with effectfrom 12'^ January,2015.

44. The learned Additional Solicitor General sought to rely on the subsequent notification dated ST' August, 2016 which substituted paragraph 3 in the notification of 20*^ October, 2015 with the requirementthatthe contribution"shall be paid with effectfrom the 12^^ January, 2015." For the same reasons already given by us, such a retroactive substitution is ultra vires the rule making power of the Central Government.The notification dated 31®* August,2016 is clearly beyond the rule making power ofthe Central Government and must be struck down and we do so. All that this means is that the notification of October,2015 remains untouched and must be read and understood on its plain language. The result is that in respect of coal, lignite and sand for stowing the holder ofa mining lease or a prospecting licencecum-mining lease shall pay the contribution to the DMF from 20**^ • October,2015 orthe date ofestablishing the DMF,whichever is later.

45. Finally, it was submitted by one of the learned counsel that Section 9B ofthe MMDR Act was a conditional legislation and that it could become Operative only on the fulfilmentofcertain conditions.We cannot agree. Section 9B of the MMDR Act delegates powerTo the T.C.(C)Nos.43/2016 etc.etc. Page 31 of34 State Governments to establish the DMF without any pre-condition. Similarly,it delegates power to the Central Govemmentto prescribe the rate at which the.contribution should be made to the DMF.This again is without any pre-condition. In view of this, we are unable to describe Section 9B ofthe MMDR Act as a conditional legislation. Conclusion

46. Having considered the issues raised by the petitioners and by the leamed Additional Solicitor General in different perspectives,we hold:

(i) Merely because the DMFs have been established or are deemed to have been established from a date prior to the issuance ofthe relevant notifications does not make their operation retrospective, (ii) In any event, the establishment of thb DMFs (assuming the establishment is retrospective)from 12"" Jariuary,2015 does not prejudicially affect any holder ofa mmiftglease or a prospectinglicence-cum-mining lease,(iii) In view ofthe failure ofthe Central Govemmentto prescribe the rate on 12"^ January,2015 atwhich contributions are required to be madeto the DMF,the contributions tO the DMF cannot be insisted upon with effect from 12"^ January, 2015. Fixing the maximum rate ofcontribution to the DMF is insufficient compliance with the law laid down by the Constitution Bench in Vatika.

(iv) Contributions to the DMF are T.C.(C)Nos.43/2016 etc.etc. ^ Page 32of34 f A required to be made by the holder of a mining lease or a prospecting licence-cum-mining lease in the case ofminerals other than coal,lignite and sand for stowing with effect from 17'^ September,2015 when the rates were prescribed by the Central Government,(v) Contributions to the DMF are required to be made by the holder ofa mining lease or a prospecting licence-cum-mining lease in the case of coal, lignite and sand for stowing with effect from 20^ October, 2015 when the rates were prescribed by the Central Government or with effect from the date on which the DMF was established by the State Government by a notification, whichever is later,(vi)The notification dated 3 August,, 2016 issued by the Central"Government is invalid and is struck down being ultra vires the rule making power of the Central Government under the MMDR Act.

47. We fervently hope the State Governments recognize their responsibilities and utilize the contributions to the District Mineral "Funds quickly and for the objectfor which they have been established, particularly since the amounts involved are huge.

48. We grant time till 3F' December, 2017 to those holders of a mining lease or a prospecting licence-cum-mining lease who have not made the full contribution to the District Mineral Funds to pay the T.C.(C)Nos.43/2016etc.etc. ^ Page33of34 contribution,failing which they will be liable to make the contribution with interest at 15% per ahhtim from the due.date. We also make it clear that in the event any holder ofa mining lease or a prospecting licence-cum-mining lease has.mistakenly made contributions to the District Mineral Fund from a date prior to the date that we have determined,such a holder ofa mining lease ora prospecting licencecum^mining lease shall notbe entitled to anyrefund but may adjustthe contribution against future contributions, without the benefit of any interest. ■.

49. With the above conclusions. Transfer Petition Nos.74-76/2017 are allowed, Transferred Cases (arising out of Transfer Petition(C) Nos.74-76/2017),Transferred Cases(C)Nos.43 and 51 of2016and the f batch ofpetitions are-disposed of. All other pending applications are also disposed of...J (Madan B.Lokur) J (Sanjay Kishan Kaul) New Delhi; (DeepakGupta)