Centre moves Supreme Court against verdict on mineral taxation rights

The Centre on Tuesday informed the Supreme Court of having filed a curative petition after a nine-judge bench in a 8:1 majority verdict ruled that the legislative power to tax mineral rights vested with states.

Solicitor General Tushar Mehta, appearing for the Centre, informed about moving against the majority verdict to a bench of Justices Vikram Nath and Sandeep Mehta.

"We have filed a curative petition with all seriousness," Mehta said.


The top court last year dismissed the pleas seeking review of its July 25, 2024 verdict.

A nine-judge Constitution bench headed by former Chief Justice D Y Chandrachud, in a majority 8:1 verdict, said Parliament does not have the legislative competence to tax mineral rights under Entry 54 of List I of the Constitution which relates to regulation of mines and mineral development by the Centre.

The pronouncement, which came as a setback to the Centre, further said Parliament could still legislate to impose "any limitations" on power of states to levy tax on mineral rights.

Justice B V Nagarathna, in her dissenting verdict, said royalty was in the nature of a tax or an exaction and the Centre does have the power to levy it.

On August 14 last year, in a major victory for mineral-rich states, the top court had allowed them to recover from the Centre and mining companies royalty and tax dues on mineral rights and mineral-bearing lands worth thousands of crore of rupees since April 1, 2005 over a period of 12 years.

It said the time for payment of the demand of tax by the states shall be staggered in instalments over a period of 12 years commencing from April 1, 2026.

The bench further said bearing in mind the consequences that would emanate from the past, it as imposed the conditionalities and directed that the levy of interest and penalty on demands made for the period before July 25, 2024 shall stand waived for all the assessees.