New Delhi: A nine judge bench of the Supreme Court on Thursday (July 25) upheld the state government’s power to tax mines and minerals.
The bench pronounced the judgment with an 8:1 majority, reported Supreme Court Observer.
While Chief Justice D.Y. Chandrachud authored the majority opinion for himself and the eight other judges, the lone dissenting opinion was authored by Justice B.V. Nagarathna.
Justice Nagarathna warned that allowing states to decide taxes on mines and minerals would have serious economic implications.
The majority of the bench came to the conclusion that state governments had the power to levy tax under both Entry 49 and Entry 50 of the State List.
The main appellants in the case were the states of Jharkhand, Andhra Pradesh and Uttar Pradesh.
The court also rejected the respondents’ arguments that tax could not be collected under Entry 49 because it does not expressly mention “tax on mineral rights,” reported Supreme Court Observer.
Justice Nagarathana, who dissented with the majority judgment, pointed out that allowing this would lead to “double taxation” as state governments now have the opportunity to collect tax on the basis of two entries.
The majority said that parliament cannot not invoke “residuary powers” exercised under Entry 97 of the Union List to restrict a state’s taxing power, reported Supreme Court Observer.
