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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Article 226 of the Constitution
  • Section 15 of the said Act, and Article 19(1)(g) of the Constitution
  • Section 15(1) of the Mines and Minerals (Regulation and Development) Act, 1957
  • The proviso to Section 15(3) of the said Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Article 226 of the Constitution
  • Section 15 of the said Act, and Article 19(1)(g) of the Constitution
  • Section 15(1) of the Mines and Minerals (Regulation and Development) Act, 1957
  • The proviso to Section 15(3) of the said Act
Smart Summary

Factual and Procedural Background

The appellant, a quarry-lease holder in Gujarat, originally filed Special Civil Application No. 138 of 1978 before the Gujarat High Court challenging a Government notification dated 6 April 1976 that had increased the rate of dead rent under the Mines and Minerals (Regulation and Development) Act, 1957. After dismissal by a Single Judge, the appellant preferred Letters Patent Appeal No. 62 of 1978.

While that appeal was pending, the State issued a second notification dated 26 March 1979 which (i) reduced royalty for all minor minerals to ten paise per metric tonne and (ii) again increased dead rent. Multiple writ petitions, including the appellant’s pending appeal, were heard together and decided in Sonbai Pethalji v. State of Gujarat (1980 XXI (2) Guj LR 530), wherein the High Court struck down both the 1976 and 1979 notifications as ultra vires Section 15 of the Act and Article 19(1)(g) of the Constitution.

Acting on that High Court judgment, the State issued a Circular dated 12 February 1981 directing that royalty be recovered at pre-1976 rates. The present Special Leave Petition came before the Supreme Court along with allied matters (D.K. Trivedi & Sons v. State of Gujarat, 1986 Supp SCC 20; Ambalal Manibhai Patel v. State of Gujarat). In its principal judgment delivered the same day, the Supreme Court (i) upheld the 1979 notification, (ii) declared the 1976 notification invalid on a distinct statutory ground, and (iii) reversed the decision in Sonbai. The present order applies that ruling to the appellant’s case.

Legal Issues Presented

  1. Whether the Gujarat High Court erred in quashing the entire notification of 26 March 1979 when only the enhancement of dead rent had been challenged.
  2. Whether the Government Circular dated 12 February 1981, instructing recovery of royalty at 1975 rates, was legally sustainable after the validity of the 1979 notification was affirmed.

Arguments of the Parties

Appellant's Arguments

  • The writ petition in Sonbai only contested the increase in dead rent; therefore, the High Court lacked jurisdiction to annul the portions of the 1979 notification that reduced royalty.
  • The subsequent Circular dated 12 February 1981, which resurrected pre-1976 royalty rates, was ultra vires once the 1979 notification was reinstated.

Respondent's Arguments

This information was not available in the provided opinion.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
D.K. Trivedi & Sons v. State of Gujarat, 1986 Supp SCC 20 Upheld validity of the 1979 notification; declared 1976 notification invalid for violating the proviso to Section 15(3) of the Act. The present order expressly relies on this judgment; its holdings govern the disposition of the appeal.
Sonbai Pethalji v. State of Gujarat, 1980 XXI (2) Guj LR 530 High Court decision striking down the 1976 and 1979 notifications as ultra vires. Cited as the decision reversed by the Supreme Court; its reasoning was rejected.

Court's Reasoning and Analysis

The Court’s analysis is brief because the substantive issues had already been decided in the companion judgment in D.K. Trivedi. Applying that ruling, the Court held:

  • The notification of 26 March 1979 is valid and operative; therefore, the High Court’s complete quashing of it was erroneous.
  • The Government Circular dated 12 February 1981, premised on the now-reversed Sonbai decision, lacks legal authority and is inoperative.

Consequently, the appellant’s challenge succeeded without the need for further independent analysis.

Holding and Implications

APPEAL ALLOWED.

The State of Gujarat and its officers are restrained from acting upon the Circular dated 12 February 1981. Royalty and dead rent for the period 1 April 1979 to June 1981 must be recovered strictly under the rates set by the valid notification of 26 March 1979, subject to payment or refund directions contained in the companion judgment. Each party will bear its own costs.

Implications are confined to the parties: the decision reinstates the 1979 fiscal regime for minor minerals in Gujarat and nullifies the State’s contrary circular. No new legal principle beyond the companion judgment is established.

    Ambalal Manibhai Patel v. State Of Gujarat .

    Order

    1. The above petition for special leave to appeal was heard along with Writ Petition No. 1656 of 1981 etc. — D.K Trivedi & Sons v. State of Gujarat 1986 Supp SCC 20 and Civil Appeal No. 706 of 1981 etc. — Ambalal Manibhai Patel v. State of Gujarat. All those writ petitions and civil appeals were disposed of by a Judgment delivered by us today. In view of our said Judgment leave to appeal is granted in the above petition and printing and preparation of the appeal record are dispensed with.

    2. The appellant had filed in the Gujarat High Court a writ petition under Article 226 of the Constitution being Special Civil Application No. 138 of 1978, challenging the validity of the notification dated 6-4-1976, issued by the Government of Gujarat in the exercise of the power under Section 15(1) of the Mines and Minerals (Regulation and Development) Act, 1957, whereby the Government of Gujarat made the Gujarat Minor Mineral (Second Amendment) Rules, 1976, enhancing the rate of dead rent payable by the holders of quarry leases. The appellant's writ petition was dismissed by a learned Single Judge of the High Court. Thereupon, the appellant filed a letters patent appeal against the said order of dismissal being letters patent appeal No. 62 of 1978. While the said letters patent appeal was pending, the Government of Gujarat issued a notification dated 26-3-1979, whereby it made the Gujarat Minor Minerals (Amendment) Rules, 1979, reducing the rates of royalty in respect of all minor minerals to a uniform rate of ten paise per metric tonne and enhancing the rates of dead rent. Several writ petitions were filed in the High Court challenging the validity of the said notification dated 26-3-1979, so far as the enhancement of the dead rent was concerned. The appellant's letters patent appeal as also those writ petitions were heard and disposed of by a common judgment reported as Sonbai Pethalji v. State of Gujarat 1980 XXI (2) Guj LR 530 holding both the said notifications dated 6-4-1976, and 26-3-1979, to be ultra vires Section 15 of the said Act, and Article 19(1)(g) of the Constitution. Thereupon the Government of Gujarat issued a Circular dated 12-2-1981, directing that in view of the said judgment of the High Court royalty would continue to be charged at the rates specified in the notification dated 29-10-1975. We have in our aforesaid Judgment reversed the said decision of the Gujarat High Court in Sonbai case 1980 XXI (2) Guj LR 530. In that Judgment we have upheld the validity of the notification dated 26-3-1979, but have held that the notification dated 6-4-1976 is bad in law but on a wholly different ground, namely, that it violates the prohibition contained in the proviso to Section 15(3) of the said Act.

    3. In the present appeal, the contention of the appellant is that what was challenged before the High Court in Sonbai case 1980 XXI (2) Guj LR 530 was the enhancement of dead rent made by the said notification dated 26-3-1979, and the High Court, therefore, could not quash the said notification in its entirety, that is to say, it could not quash also that part of the said notification which reduced the rates of royalty. The appellant has also challenged the validity of the said Circular dated 12-2-1981, issued by the Government of Gujarat.

    4. As we have in our aforesaid Judgment upheld the validity of the said notification dated 26-3-1979, and further held that the directions contained in the said Circular dated 12-2-1981, are invalid and inoperative, the present appeal requires to be allowed.

    5. We, accordingly, allow the appeal and restrain the State of Gujarat and its officers from acting upon the directions contained in the said Circular dated 12-2-1981, and further direct the State of Gujarat to collect royalty and dead rent in accordance with the provisions of the notification dated 26-3-1979, for the period commencing from 1-4-1979, and ending on June (sic) 1981, namely, the period during which the rates prescribed by the said notification were in force. There will be the same directions with respect to the payment or refund, as the case may be, as given in our aforesaid judgment.

    6. The parties will bear and pay their own costs of this appeal.

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    Comments

    Ambalal Manibhai Patel v. State Of Gujarat .
    (Mar 5, 1986)