Jeevan Reddy, J.:— In this batch of writ petitions, the competency of the Andhra Pradesh Legislature to enact the Andhra Pradesh (Minerals Rights) Tax Act, 1975, and the validity of GO.Ms No. 23, dated 12-1-1984 issued under Section 3 of the said Act, are called in question. The petitioners in these ??? petitions can be categorised into two groups. One group consists of the lessees in respect of lime-stone who sell the mineral extracted by them to various industries including the Cement industry; the other group consists of Cement manufacturers who have also obtained mining leases with respect to lime-stone but who consume the lime-stone extracted by them in its entirety.

A. Lime-stone is one of the minerals mentioned in Second Schedule (at serial No. 8) to the Mines and Minerals (Regulation and Development) Act, 1957, being Central Act 67 of 1957 (hereinafter referred to as “The Central Act”).

2. Not being a minor mineral as defined in clause (e) of Section 3 of the Central Act, it is generally referred to as a ‘major mineral’, the regulation and development of which has been taken over by the Union by virtue of the declaration contained in Section 2. The petitioners have been granted leases by the appropriate authorities under this Act, and have also executed lease-deeds as contemplated by the Act and the Rules. The petitioners say that they are also paying the royalty, as provided by Section 9, and dead-rent as provided by Section 9-A of the Act. In 1975, the Andhra Pradesh Legislature enacted the Andhra Pradesh (Mineral Rights) Tax Act, 1975, being Act 14 of 1975 (hereinafter referred to as “the State Act”), to provide for the levy and collection of tax on mineral rights of holders of mining leases in respect of certain minerals in the State of Andhra Pradesh. Lime-stone is mentioned at serial No. 8 in the schedule to this Act. Section 3 of the State Act levies tax on mineral rights. It says that, with effect from the appointed date and subject to any limitations which may be imposed by parliament by law relating to mineral development, and the Rules made thereunder, there shall be levied and collected a tax on the mineral rights of every holder of a mining lease at such percentage of the amount of royalty payable by him under Section 9 of the Mines and Minerals (Regulation and Development) Act, 1957, as the Government may, by notification fix and different percentages may be fixed in respect of different minerals”. Sub-Section (2) says that the tax levied by this Section shall be payable by the holders of mining leases and shall be in addition to the royalty payable by him. The other provisions of the Act deal with the determination and collection of tax, and provide for appeal and revision against the order of assessment. Rules have been made under this Act to which, however, no reference is called for herein.

3. As originally enacted. Section 3(1) levied tax on mineral rights at 1/4 of the amount of royalty. The sub-section was, however, amended by Amendment Act 6 of 1978 with effect from 24-8-1977, by which the ceiling of 1/4 of the royalty amount (i.e, 25% of the royalty amount) was removed and the power vested in the Government to prescribe the percentage of the amount of royaltypayable, by notification. After this amendment, the tax on mineral rights was raised, in the first instance, from the pre-amendment rate of 25% to 50%; then it was raised to 75%; then again to 100%. Under the impugned GO., i.e, GOMs. No. 23, dated 12-1-1984, the tax on limestone has been raised to 900%.

B. Competence of the Andhra Pradesh Legislature to enact the Andhra Pradesh (Mineral Rights) Tax Act, 1975:

4. The first contention of Sarvasri P. Ramachandra Reddy, Ayyapu Reddy, K. Srinivasa Murthy and C. Ananda Rao, the learned counsel for the petitioners, is that, by virtue of the declaration contained in Section 2 of the Central Act, taking over the regulation of mines and mineral development by the Union, the State Legislature has been denuded of its power to enact any law relating to mines or mineral development. The entire subject-matter, i.e, Regulation of mines and development of minerals, has been taken over by the Union, the Central Act provides for levy of royalty, and dead-rent. It also contemplates levy of tax, as would be evident from a perusal of Section 25. Section 13 of the Central Act confers upon the Central Government the power to make Rules for the purpose of carrying out the object of the Act, and in particular with respect to fixing and collection of dead-rent, fines, fees or other charges, in respect of mining leases and minerals mined, quarried, excavated or collected, and also for the construction maintenance and use of roads, power transmission lines, tramways, railways and other means of transport and communication. Section 18 of the Central Act casts a duty upon the Central Government to take all such steps as may be necessary for the conservation and development of minerals in India, and for that purpose it has been empowered to make Rules. In this view of the matter, it is contended the State Legislature has no power to levy a tax on the minerals extracted, calling it a tax on mineral rights. The Act is, therefore, ultra vires the power of the State Legislature. The second contention urged is that, the levy imposed by Section 3 is, in truth and effect, an excise duty, and not a tax on mineral rights. Levying the tax on royalty clearly shows that it is a tax on production of minerals, and not on the right to minerals. Since the State Legislature has no power to levy excise duties Section 3 is beyond its power. The third contention urged under this head is that Section 3 is bad on account of excessive delegation of legislative power. It is contended that, by virtue of the amendment contained in Amendment Act 6 of 1978. the Legislative has abdicated its function ??? the executive. No guidance is provided either by Section 3 or by any other provisions of the State Act, in the matter of rate of tax to be fixed by the Government. It has been left to the unguided and unfettered discretion and pleasure of the State Government to fix such rate as it thinks appropriate. The State Legislature has thus denuded itself of the essential and in alienable control which it must reserve to itself and exercise over its delegate. The result, it is contended, is evident from the impugned action of the Government fixing the tax at nine-times the royalty.

5. A Bench of this Court has upheld the competence of the State Legislature to enact the State Act, in its judgement dated 21-9-1982, in Writ Petition Nos. 1451/1976 and 2986/1980. Counsel for the petitioners, however, submitted that the said decision requires reconsideration for the various reasons urged by them, including the ground that a contrary view has been taken by the Mysore High Court, which has not been referred to, or dealt with by the Bench. Though we were dis-inclined to permit the counsel to urge this point in view of the Bench decision, we ultimately allowed them to urge the said contention, and we proceed to deal with it.

6. A few Entries in the Seventh Schedule to the Constitution may be noticed first:

List-I-JJnion List:

“54. Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest”.

“96. Fees in respect of any of the matters in this List, but not including fees taken in any Court”.

7. List-II-State List:

“23. Regulation of mines and mineral development subject to the provisions of List-I with respect to regulation and development under the control of the union”.

“50. Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development”.

“66. Fees in respect of any of the matters in this list, but not including fees taken in any Court”.

8. A perusal of the above Entries makes it clear that the tax on mineral rights constitutes a separate and independent Legislative head from the regulation of mines and mineral development, referred to in Entry 23 of the State List, and Entry 54 of the Union List. If tax on mineral rights were not specified as an independent legislation head in the Seventh Schedule, it could perhaps be argued that the regulation of mines and mineral development also takes within its fold the power to levy the tax necessary for that purpose. But, in view of Entry 50, such an argument is not open, nor available. The vearious Entries in the Seventh Schedule must be read together and attempt should be made to make each Entry meaningful. No Entry should be so construed as to make another Entry in the Seventh Schedule nugatory or a perflousu. Meaning and content should be given to each entry, keeping in mind that they are heads of legislation to be construed liberally. Indeed, this was the view expressed by the Supreme Court in M.P.V. Sundararamier & Co. v. State Of A.P., AIR 1958, Supreme Court, P. 468 In paragraph 51 of the judgment, Venkatarama Aiyar, J., speaking for the Court, had this to say:

“In List I, Entries 1 to 81 mention the several matters over which Parliament has authority to legislate Entries 82 to 92 enumerate the taxes which could be imposed by a law of Parliament An examination of these two groups of Entries shows that while the main subject of legislation figures in the first group, a tax in relation thereto is separately mentioned in the second. Thus, Entry 22 in List I is “Railways”, and Entry 89 is Terminal taxes on goods or passengers carried by railways, sea or air: taxes on railway fares and freights”. If Entry 22 is to be construed as involving taxes to be imposed, then Entry 89 would be superfluous. Turning to List II, Entries 1 to 44 form one group mentioning the subjects on which the States could legislate. Entries 45 to 63 in that List form another group, and they deal with taxes. Entry 23 is “Regulation of mines” and Entry 50 is “Taxes on mineral rights”. The above analysis - and it is not exhaustive of the Entries in the List - leads to the inference that taxation is not intended to be comprised construction be regarded as included, but is treated as a distinct matter for purposes of legislative competence, And this distinction is also manifest in the legislative competence. And this distinction is also manifest in the language of Art. 248, Clauses (1) and (2) and of Entry 97 in List I of the Constitution……”

9. Again, in paragraphs 56, 57 the learned Judge pointed out;

“The question here is not simpliciter whether a particular piece of legislation falls within one Entry or not. The point in dispute before us is whether between two Entries assigned to two different legislatutes the particular subject of legislation falls within the ambit of the one or the other. If Entry 42 in List I is to be construed liberally, so must Entry 54 in List II, be,…….. There is another rule of construction also well settled that the Entries in two Legislative Lists must be construed if possible so as to avoid a conflict……..”

10. Once we treat the power of levying taxes on mineral rights as an independent legislative power conferred by the Constitution on the State Legislatures, apart and distinct from the regulation of mines and minerals development mentioned in Entry 23, the entire controversy gets resolved. Entry 23 in the State List and Entry 54 in the Union List are complementary to each other. The effect of the enactment of the Central Act is that, regulation of mines and mineral development has been taken away from the purview of the State Legislature to the extent indicated in the Central Act but certainly not the power to tax the mineral rights under Entry 50. It is true that even Entry 50 is subject to any Limitations that may be imposed by Parliament by a law relating to mineral development. In other words, a law made by the Parliament under Entry 54 of the Union List can also place limitations upon the power of the State Legislatures to tax the mineral rights. The question is, whether any such limitation or limitations have indeed been imposed by the Central Act? We find none. Mr. Ayyapu Reddy, the learned counsel for the petitioners, contended that because Section 25, refers to tax also, it must be deemed that the Union has taken over the power of taxation on mineral rights as well. It is not possible to agree. Section 25 reads thus:

“25(1) Any rent, royalty, tax fee or other sum due to the Government, under this Act or the rules made thereunder or under the terms and conditions of any prospecting licence or mining lease may, on a certificate of such officer as may be specified by the State Government in this behalf by general or special order, be recovered in the same manner as an arrear of land revenue.

(2) Any rent, royalty tax, fee or other sum due to the Government either under this Act, or any rule made thereunder or under the terms and conditions of any prospecting licence or mining lease may, on a certificate of such officer as may be specified by the State Government in this behalf by general or special order, be recovered in the same manner as if it were an arrear of land revenue and every such sum which becomes due to the Government after the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972, together with the interest due therein, shall be a first charge on the assets of the holder of the prospecting licence or mining lease, as the case may be.”

11. The object of Section 25 is to provide that, any amounts due to the Government under the said Act or the Rules made thereunder, or under the terms and conditions of a prospecting licence or mining lease, as the case may be, shall be recovered as arrears of land-revenue. While mentioning the nature of amounts that can be so recovered, it refers to ‘Tax’ also; but that by itself cannot be treated as a limitation imposed by the parliament upon the State Legislatures, within the meaning of Entry 50 in List-II. It is conceded that there is no other provision either in the Central Act, or in the Rules made thereunder, levying any tax on mineral rights. If so, we are unable to see how the power to tax mineral rights, expressly conferred upon the State Legislatures by Entry 50 in List-II, can be said to have been taken away by the Parliament. In this connection it may be relevant to notice that, while the Mines and Mineral (Regulation and Development) Act, 1948 enacted prior to the Constitution, provided for levy of tax, no such provision is to be found in the 1957 Act.

12. Counsel for the petitioners relied upon the decisions of the Supreme Court in Hingir-Rampur Coal Company v. State of Orissa AIR 1961 Supreme Court 459 Baijnath v. State of Bihar (1969) 3 SCC 838 : AIR 1970, Supreme Court, 1436; and State of Tamil Nadu v. Hind Stone (1981) 2 SCC 205 : AIR 1981, Supreme Court 711, in support of their proposition that, by virtue of the declaration contained in Section 2 of the Central Act, the entire field of regulation of mines and mineral development has been taken away from the purview of the State Legislature and that, the State Legislatures thereafter cannot make any law dealing with the said subject, including the levy of taxes on mineral rights. It is sufficient to point out that, none of the above cases expressly deal with the power of the State Legislatures to levy taxes on mineral rights in pursuance of Entry 50 in List-II and this much is not disputed. We must, however, point out that the subject of mines has not become an untouchable subject for State Legislatures because of the Central Act. They can still enact laws under other permissible heads affecting the mines, so long as the law made by them, in pith and substance, does not deal with regulation of mines and mineral development, but with other aspect. For example, the Haryana Mineral (Vesting of Rights) Act, 1973, acquiring the ownership of lands' containing saltpetre deposits, was sustained by the Supreme Court in State of Haryana v. Channan Mal (1977) 1 SCC 340 : AIR 1976, Supreme Court, 1654, as within the competence of the State Legislature. It was observed that the purpose and object behind the two enactments was entirely different; while the Central Act dealt with the regulation of mines and mineral development, the Haryana Act dealt with the acquisition of proprietory rights in mineral deposits in the land and that, there was no conflict between the two enactments, it was also observed that, by enacting the Central Act, the Parliament did not intend to trench upon the power of State Legislature under Entry 18 of the List-II, read with Entry 42 of List-III and that, the Central Act did not concern itself with the ownership rights to the minerals, or to the lands containing minerals. Similarly, in H.R.S Murthy v. Collector of Chittoor AIR 1965, SC 177., the Supreme Court upheld the levy of cess on lands, imposed under Section 78 and 79 of the Madras District Boards Act, as being in truth and substance a tax on lands within the meaning of Entry 49 of the State List, and not a fax on minerals within the meaning Of Entry 50, notwithstanding the fact that the cess was payable even in respect of lands containing minerals, it was held that the Madras Act has nothing to do with the regulation of mines and mineral development.

13. For the aforesaid reasons, we do not see any reason to take a different view than the earlier Bench of this Court. We respectfully agree with their view and the reasoning contained therein. The Bench has dealt with the several decisions relied upon by the petitioners before us, and also certain other decisions relevant in this behalf, to which we need not refer over again.

14. Counsel for the petitioners then argued that the statement of objects and reasons appended to the Bill (which was later enacted into the State Act), clearly goes to show that it is a law relating to mineral development and that it is enacted for the very same purpose as is provided by Sec. 18 of the Central Act. The statement of objects and reasons appended to the Bill, reads as follows;—

“The need to provide and improve infrastructural facilities for rapid exploitation of the vast mineral resources of the State has been engaging the attention of the Government for some time. The Government consider it necessary to raise moneys for the above purpose. With a view to achieve this object the Government have now decided to undertake legislation to levy tax on mineral rights of holders of mining leases subject to any limitations imposed by Parliament by law relating to mineral development and the rules made thereunder at a rate not exceeding one-fourth of the amount of royalty payable by them in respect of the minerals in the State.”

15. Firstly, it may be noticed, the Statement of objects and reasons is attached to the Bill, and not to the Act; nor does the statement form part of the Act. The Bill may be introduced in the Legislature by the Government or by any private member with a particular object in mind; but the same object may not necessarily be kept in veiw by the Legislature while enacting the law. In any event, the clear language or ambit of the enactment cannot be cut down or curtailed by reference to the statement of objects and reasons appended to the Bill. Secondly, it may be noticed that the object mentioned in the statement of objects and reasons is not the same as the one contemplated by Section 18 of the Central Act. Section 18 of the Central Act casts a duty upon the Central Government to develop the minerals in the country, and empowers it to make appropriate Rules for achieving that purpose: whereas the objects and reasons appended to the Bill speak of providing and improving infrastructural facilities for rapid exploitation of the vast mineral resources of the State. ‘Infrastructural facilities’ spoken of in the statement are explained in the counter-affidavit as meaning the increase in the production of electrical energy, coal, and providing better and more extensive means of communication and transport all-over the State which would also go to accelerate the development of minerals in the State. It is also stated in the counter-affidavit that, out of the amount of tax realized under the State Act, substantial sums have been made over to the Electrictiy Board and the Singareni Collieries for increasing and improving the production of electrical energy and coal. It is true that the ‘mineral development’, referred to in Section 18 of the Central Act also involves laying of roads, powerlines etc., but that is only confined to, and strictly for the purpose of development of minerals whereas ‘infrastructural facilities’ referred to in the statement of objects and reasons are the facilities available throughout the State and to all concerned and not co fined to the areas containing minerals. The relevance of the rule of pith and substance in this context must also be kept in mind. It is well to remember in this context that what is levied by the State Act is a tax, and not a fee. The tax collected goes into the general revenues of the State and is not earmarked or related to the services rendered. The tax is payable, whether any development of mines is undertaken or not by the State Government.

16. Counsel for the petitioners relied upon the decision of the Mysore High Court in L.M Company v. T.D Board AIR 1972, Mysore, 299, in support of their proposition and as running counter to the principle of the Bench decision of this Court in Writ Petition Nos. 1451/1976 and 2896/1980, dated 21-9-1982. We are not prepared to agree with the learned counsel. The case before the Mysore High Court pertained to the validity of the notification issued by the Taluk Development Board under Section 143 and 144 of the Mysore Village Panchayats and Local Boards Act. Under the impugned notification, a licence fee was imposed on mining of manganese, iron ore and certain other minerals. Section 143 empowers the Gram Panchayats to regulate certain trades which are likely to be dangerous to human life or health, or property, or are likely to create or cause nuisance. While issuing the notification under Section 143, the mining of manganese, iron ore etc., was also prescribed as one of the those trades which cannot be carried on without obtaining a licence: the appropriate licence fee was also prescribed. The High Court held that, after the enactment of the Central Act and in view of the declaration contained in Sec. 2 thereof the State Legislature had no power to authorise the Taluk Development Board to levy a fee or tax on the mining activities carried on by persons holding mineral concessions, and therefore the said notification was bad. In our opinion, the proposition is stated in rather too wide terms. Moreover, it was a case of imposition of fee, said to be a fee relating to regulation of Mines and Minerals development it was not a case of levying as tax on mineral rights, nor was the law, a law made under or relating to Entry 50 in List-II. Though Entry 50 is also generally referred to, the decision does not refer to the significance of a separate and independent Entry providing for taxation on mineral rights. Indeed, for the purpose, of that case, such discussion was unnecessary. It should also be noticed that, if it were only a levy of fee relating to regulation of mines, or upon mineral development it would, squarely fall within Entry 23 read with Entry 66 of the State List. Entry 66 is not an independent Entry, but a supplemental one, which must be read into each Entry in the List. The said decision, therefore, does not advance the case of the petitioners.

C. The nature of tax levied by Section 3 of the State Act:

17. The second ground of attack on the validity of the levy created by the State Act is that, the tax imposed by Section 3 is, in truth and in effect, an excise duty inasmuch as it is related to and levied upon the production of mineral. It is contended that the tax is not upon mineral rights, but on the production of the mineral itself because the tax is tacked on to the royalty, and royalty is payable only where the mineral is extracted. It is not possible to agree with this contention either. According to Section 3 of the State Act, the tax is levied avowedly “on the mineral rights of every holder of a mining lease”. Merely because for the purpose of assessment it is tacked on to royalty payable under Section 9 of the Central Act, it does not mean that it is a tax or duty on production within the meaning of Entry 84 of the Union List. It may be that the tax could have been levied in some other manner: but what we have to see is whether the tax as levied, is, or is not a tax on mineral lights. By way of illustration, we may say that, by levying the entertainment tax on each individual ticket (admission to entertainment), the tax does not cease to be a tax on entertainment, and does not become a tax on the person entertained.

18. It cannot be disputed that it is open to the Legislature to choose such method of assessment as it may think appropriate. The following observations of Wanchoo, J., in Hingir-Rampur Coal Company v. State of Orissa AIR 1961, S.C 459 relied upon by the learned Addl. Advocate General for the respondents, clearly negative the petitioners' contention in paragraph 53 the learned Judge observed:

“Item 50 (in List II) provides for taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development, this raises a question as to what are taxes on mineral rights. Obviously, taxes, on mineral rights must be different from taxes on goods produced in the nature of duties of excise. If taxes on mineral rights also include taxes on minerals produced, there would be no difference between taxes an mineral rights and duties of excise under item 84 of List I. A comparison of Lists land II of the Seventh Schedule shows that the same tax is not put in both the Lists. Therefor taxes on mineral rights must be different from duties of excise which are taxes on minerals produced. The difference can be understood if one sees that before minerals are extracted and become liable to duties of excise somebody has got to work the mines. The usual method of working them is for the owner of the mine to grant leases to those who have got the capital to work the mines. There should therefore be no difficulty in holding that taxes on mineral rights are taxes on the right to extract minerals and not taxes on the minerals actually extracted, thus tax on mineral rights would be confined, for example, to taxes on leases of mineral rights and on premium or royalty for that. Taxes on such premium and royalty would be taxes on mineral rights while taxes on the minerals actually extracted, would be duties of exercise. It is said that there may be cases where the owner himself extracts minerals and does not give any right of extraction to somebody else and that in such cases in the absence of mining leases or sub-leases there would be no was of levying tax on mineral rights. It is enough to say that these cases also, rare though they are, present no difficulty…… There would be no difficulty where an owner himself works the mine to value the mineral rights on the same principles on which leases of mineral rights are made and then to tax the royalty which for example, the owner might have got if instead of working the mine himself he had leased it out to somebody else. There can be no doubt therefore that taxes on mineral rights are taxes of this nature and not taxes on minerals actually produced……..”

19. We may point out that though the opinion of Wanchoo J. is a dissenting one is the said case, the majority did not expres a different view on the nature, and method of levy of tax on minerals, from the one expressed by Wanchoo, J., indeed, the majority opinion does not deal with the question whether the Orissa Act impugned therein can be justified under Entry 50 in List-II, or is it relatable to Entry 24 in List-III, and as such whether it suffers from the vice of repugnancy with the Central Act. We are, therefore, entitled to draw sustenance from the above observation of Wanchoo, J. is not a mere obiter dicta. It was argued before him that the cess levied by the Orissa Act is a tax on mineral rights, within the meaning of Entry 50 and, therefore, valid; but on an examination of the nature of the tax on mineral rights and the cess imposed by the Orissa Act, the learned Judge held that the cess imposed is not a tax, but one in the nature of duty of excise.

20. Counsel for the petitioners then argued that royalty is payable by a lessee only when he extracts the mineral; there may be a case where a person holding a mining lease may not extract the mineral, in which case he would not be liable to pay royalty; the impugned tax under the State Act would also not be payable in such a case. This circumstances, the learned counsel submit, points out that tax is on production of mineral, and not on mineral rights. It would have been a tax on mineral rights if it was levied, and was payable, whether the lessee extracts the mineral, or not. We must, however, point out that the situation contemplated by the petitioners must indeed be rare. No person would ordinarily keep quiet having obtained a mining lease. The mining lease is obtained for the purpose of extracting the mineral. Moreover, according to the Act, rules, and the conditions of lease, every lessee must commence and carry on the mining operations; if he fails to do so, the lease itself is liable to be terminated. The Government would not allow any lessee to so freeze the mining lease, for, the mining lease, is granted not merely for the benefit of the lessee, but in public interest as well. The public interest lies in extraction of minerals, which adds to the national wealth. It would, therefore, be in appropriate to take the example of such a lessee and on that basis judge the true nature and character of the tax imposed by the State Act.

21. Mr. P. Ramachandra Reddy relied upon certain observations in H.R.S Murthy v. Collector of Chittoor AIR 1965, Supreme Court, 177 in support of his contention that the tax levied by Section 3 of the State Act is, in truth and substance, a duty of excise within the meaning of Entry 84. We have already referred to this case. The question there was, whether the cess imposed by the Madras District Boards Act on lands containing minerals, was beyond the competence of the State Legislature because of the enactment of the Central Act and the declaration contained in Section 2 thereof. Under the Madras Act, the land cess was levied on “the annual rental value of all occupies lands on whatever tenure held”. The tax was 2 Annas in the rupee of the annual rental value. The expression “annual rental value” was also defined for the purpose of the said tax. In the case of lands held direct from the Government on ryotwari tenure or on lease or licence, the assessment, lease amount, royalty or other sum payable to Government for the lands, together with any water-rate which may be payable for their irrigation, was to be taken to be the annual rental Value. In this view of the matter, it was argued for the petitioner therein that “as the impugned land cess was payable only in the event of the mining lessee winning the mineral and so paying the royalty and not when no minerals were extracted, it was in effect a tax on the minerals won and therefore on minerals rights.” This argument was not accepted by the Supreme Court, and was answered thus:—

“When a question arises as to the precise head of legislative power under which a taxing statute has been passed, the subject for inquiry is what in truth and substance is the nature of the tax,. No doubt, in a sense, but in a very remote sense it has relationship to mining as also to the mineral won from the mine under a contract by which royalty is payable on the quantity of mineral extracted. But that does not stamp it as a tax on either the extraction of the mineral or on the mineral right”. The Court, however, thought it unnecessary to go into the question as to what exactly is a tax on mineral rights, in view of the fact that such a taxis not leviable by Parliament but only by the State Legislature, the sole limitation on the State power to levy the tax being that, it must not interfere with a law made by Parliament as regards mineral development. The above observation, in our opinion, instead of supporting the contention of the petitioners, goes to support the validity of imposition under the State Act. Applying the rule of pith and substance, it must beheld that the State Act is an Act enacted solely for the purpose of levying a tax on mineral rights, and does not amount to a duty of excise, within the meaning of Entry 84, nor does it become a law relating to Entry 23 of List-II. Any remote connection or bearing which the State Act may have upon the mines and mineral development, cannot be a ground for holding that the State Act is one relating to, or made under Entry 23 of List-II. Secondly, as adverted to by the Supreme Court, the Central Act does not contain any limitations upon the power of the State Legislature in the matter of levying tax on mineral rights.

D. Whether section 3 of the State Act is invalid on the ground of exessive delegation of legislative power:

22. It is now well settled by several decisions of the Supreme Court and High Courts that the Legislature cannot, and should not delegate its essential legislative function, though it can delegate the task of subordinate legislation which is necessary for implementing the proposes and objects of an Act. Severa cases have been cited before us, but we think it unnecessary to refer to all of them. It would be sufficient if we refer to the statement of law on the subject, as contained in the decision of the Supreme Court in Delhi Municipality v. B.G.S & W. Mills AIR 1968, Supreme Court, 1232, a decision rendered by a Bench of seven Judges, Wanchoo, C.J, speaking for the Court stated the law thus:

“A review of these authorities therefore leads to the conclusion that so far as this Court is concerned the principle is well established that essential legislative function consists of the determination of the Legistative policy and its formulation as a binding rule of conduct and cannot be delegated by the legislature. Nor is there any unlimited right of delegation inherent in the legislative power itself. This is not warranted by the provisions of the Constitution. This legislature must retain in its own hands the essential legislative functions and what can be delegated is the task of subordinate legislation necessary for implementing the purposes and objects of the Act. Where the legislative policy is enunciated with sufficient clearness or a standard is laid down, the court should not interfere. What guidance should be given and to what extent and whether guidance has been given in a particular case at all depends on a consideration of the provisions of the particular Act with which the Court has to deal including its preamble. Further it appears to us that the nature of the body to which delegation is made is also a factor to be taken into consideration in determining whether there is sufficient guidance in the matter of delegation.

What form the guidance should take is again a matter which cannot be stated in general terms. It will depend upon the circumstances of each statute under consideration; in some cases guidance in broad general terms may be enough; in other cases more detailed guidance may be necessary. As we are concerned in the present case with the field of taxation, let us look at the nature of guidance necessary in this field. The guidance may take the form of providing maximum rates of tax upto which a local body may be given the discretion to make its choice, or it may take the form of providing for consultation with the people of the local a areas and then fixing the fates after such consultation. It may also take the from of subjecting the rate to be fixed by the local body to the approval of Government which acts as a watch-dog on the actions of the local body in this matter on behalf of the legislature. There may be other ways in which guidance may be provided. But the purpose of guidance, whatsoever may be the manner thereof. Is to see that the local body fixes a reasonable rate of taxation for the local area concerned. So long as the legislature has made provision to achieve that reasonable rates of taxation are fixed by local bodies, whatever may be the method employed for this purpose provided it is effective it may be said that there is guidance for the purpose of fixation of rates of taxation. The reasonableness of rates may be ensured by fixing a maximum beyond which the local bodies may not go. It may be ensured by providing safeguards laying down the procedure for consulting the wishes of the local inhabitants. It may consist in the supervision by Government of the rate of taxation by local bodies. So long as the law has provided a method by which the local body can be controlled and there is provision to see that reasonable rates are fixed, it can be said that there is guidance in the matter of fixing rates for local taxation. As we have already said there is pre-eminently a case for delegating the fixation of rates of tax to the local body and so long as the legislature has provided a method for seeing that rates fixed are reasonable, be it in one form or another, it may be said that there is guidance for fixing rates of taxation and the power assigned to the local body for fixing the rates is not uncontrolled are uncanlised……….

23. The above statement of law establishes that while the delegation of the task of subordinate legislation is inevitable in the present day circumstances, the Legislature must provide sufficient guidance to the delegate. The guidance may take several forms, three of which were pointed but in the decision relevant in the case of a taking statute leaving the determination of rate of tax to the Government, viz., (i) fixing the maximum beyond Which the rate of tax cannot be prescribed by the delegate: (ii) consultation with the affected people: and (iii) requirement of the prior approval of the Government before levying a particular rate of tax. It is also stated that the nature of the body to which the power of subordinate legislation is delegated, is also relevant in determining whether there is sufficient guidance in the matter of delegation. Another form of legislative control pointed out by the Supreme Court in N.K Papiah & Sons v. Excise Commissioner (1975) 1 SCC 492 : AIR 1975, Supreme Court, 1007, is the requirement of laying the subordinate legislation before the Legislature for a particular period, and the power of Legislature to modify or rescind the same. Yet another form of control indicated in the said decision is the power or repeal which the Legislature exercises.

24. Now let us examine Section 3 of the State Act from the above standpoint, As orginally enacted, Section 3 contained, what may be called, a ceiling on the rate of tax that can be imposed by the Government, i.e, one-fourth of the amount of royalty payable under Section 9 of the Central Act. However, by Amendment Act 6 of 1978, the said ceiling was removed. Section 3(1) as it now stands, says that the tax shall be levied by the Government “at such percentage of the amount of royalty payable under Sec 9 of the Mines and Minerals (Regulation and Development) Act, 1957 as the Government may, by notification, fix on different minerals”. Sub-Section (2) clarifies that the tax payable under section 3(1) is in addition to royalty payable by the lessees under the Central Act. The question is, whether Section 3(1) provides any ceiling on the rate of tax to be fixed by the Government, or whether it leaves it to the complete discretion of the Government to fix such rate as it may think fit.

25. Before proceeding further, we must notice the stand taken by the petitioners in this behalf. Their first contention is that Section 3(1) imposes a ceiling on the tax to be fixed by the Government, by notification, viz., that, it should not exceed 100%. For this reason they say, the impugned notification levying the tax at 900% of the amount of royalty is incompetent and invalid. They also say that, if Section 3(1) is construed as not imposing any celling, then it would be bad for excessive delegation. On the other hand, the contention of the learned Addl. Advocate-General is that. Section 3(1) does not contain any ceiling as suggested by the counsel for the petitioners and yet, it is not bad for excessive delegation. His contention is that, prescribing a maximum or a ceiling, as it may be called is not obligatory wherever the Act empowers the delegate to determine and impose the tax at such rate as the delegate thinks appropriate. His submission is that, since the delegate-in this case, the Government is supposed to know the relevant conditions and circumstances relating to each mineral, it has been given the discretion to fix different rates for different minerals, and at such level as it thinks appropriate in the circumstances. It is contended, on the strength of certain observations in N.K Papaiah & Sons v. Excise Commissioner (1975) 1 SCC 492 : AIR 1975, Supreme Court, 1007 that, inasmuch as the Legislature has retained the power of repeal and also the power to rectify the actions of its delegate, the contention based on excessive delegation should fail. It is obvious that our decision on this question would also conclude the next contention urged for the petitioners viz., the validity of the impugned notification contained in G.O.Ms No. 23, dated 12-1-1984.

26. The contention of the petitioners is that the words “at such percentage of the amount of royalty” mean and imply necessarily that the rate of tax on minerals should be at a certain percentage of the amount of royalty, and can never be equal to, or exceed the amount of royalty itself. Counsel for the petitioners rely upon the meaning of the words ‘percent’ and ‘percentage’ and also submit that, if the said words are construed as not providing a maximum/ceiling, it will not only create room for arbitrariness on the part of the Government, but would also have grave consequences both for the cement manufacturers, as well as the lessees of limestone. It is contended that the imposition of tax at nine-times the royalty would hike up the cast of production of limestone, and because such a tax is not imposed in adjoining or other States in the country the lessees within this State would not be able to compete with the lessees of limestone mines outside the State. It is contended that, since the lessees of limestone mines on other States, where no such tax is imposed, would be able to produce limestone at a lesser cost, the cement manufacturers both within, and outside the State of Andhra Pradesh, would prefer to purchase limestone from them, than from the lessees within this State. Similarly, it is contended, the manufacturers of cement within this State would not be able to compete with the manufacturers outside the State. Mr. Srinivasa Murthy further pointed out that, while fixing the price of levy cement (two-third of the total rated capacity has to be delivered by way of levy to the Central Government at a rate specified by it), the Central Government does not take into account, and has refused to take into account, the tax imposed by the State Government and that, it has fixed a uniform price for levy cement all-over the country. But, because of the imposition of the State tax, the cement manufacturers within the State would not be able to supply the levy cement at the rate fixed, and if they do so, they will have to increase the price of free sale cement correspondingly, which would drive their free cement out of market for the simple reason that, the manufacturers from outside the State and who are free to sell their free cement anywhere in the country would be able to sell their cement at a lesser rate within the State.

27. In our opinion, a plain reading of Section 3(1) clearly discloses that tax on mineral rights can be imposed at a certain percentage of the amount of royalty, as may be notified by the Govern ??? necessarily means that the tax should be less than the amount of royalty payable. The words “at such percentage of the amount of royalty payable”, in our opinion, clearly manifest the intention of the Legislature that the tax to be notified should in no event, exceed 100% Indeed, even the levy at cent per-cent does not appear to be warranted. If the intention of the Legislature were to permit the Government to fix the rate of tax at such rate as the Government thought approprite, the language of Section 3(1) would have been different. In such an eventuality, the words “at such percentage of the amount of royalty payable” would not have been used. The word ‘percentage’, as commonly understood means a certain portion of hundred. A reference to the standard dictionaries for ascertaining the meaning of the words ‘per cent’ and ‘percentage’ would be appropriate in this context. In the Oxford English Dictionary, the following meanings are given for the word ‘per cent’;—

“Usually with full-seop (percent) as if an abbreviation of per centum which is the form used in Acts of Parliament and most legal documents:

A phrase. By the hundred; for, in or, to every hundred; with preceeding numeral, expressing proportion, as of a part to the whole amount or especially of interest to principal”.

28. The word ‘percentage’ is given the following meanings:

“A rate of proportion, per cent; a quantity or amount reckoned as so much in the hundred, i.e as so many hundredth parts of another, especially of the whole of which it is a part; hence loosely a part or portion considered in its quantitive relation to the whole; a portion (of something)”,

29. In the Concise Oxford Dictionary, the word ‘percentage’ is given the following meanings:

“Rate, proportion, per cent; (loosely) proportion, as only a small (percentage) of books are worth reading”.

30. Almost all the dictionaries give similar meanings which are set out in the writ affidavit in W.P No. 3064/84. Indeed, it is not denied in the counter affidavit that the literary meaning of the word ‘percentage’ is a portion of hundred. What is, however, contended by the respondents is that, the dictionary meaning is wholly inappropriate in the context, and should not be followed. We are not persuaded to agree with the respondents contention. Even if there can be any doubt with respect to the meaning of the word ‘per cent’, the meaning of the word ‘per-centage’ is clear beyond any doubt. That the dictionary meaning is relevant and has to be followed ordinarily is the view expressed by the Supreme Court in Commissioner of Wealth AP v. Officer-ln Charge (Court of Wards) Paigah (1976) 3 SCC 864. It is stated in paragraph 8 of the judgment:

“It is true that in Raja Benoy Kumar Sahas Roy's Case (1957) 32 ITR, 466-AIR 1957 SC 768), this Court pointed out that meaning of words used in Acts of Parliament are not necessarily to be gathered from dictionaries which are not authorities on what Parliament must have meant. Neverthless, it was also indicated there than, where there is nothing better to rely upon, dictionaries may be used as an aid to resolve an ambiguity. The ordinary dictionary meaning cannot be discarded simply because it is given in a dictionary. To do that would be to destroy the literal rule of interpretation. This is a basic rule relying upon the ordinary dictionary meaning which, in the absence of some overriding or special reasons to justify a departure, must prevail. Moreover, it was held there that the dictionary meanings of the word ‘agricultural’ were wider than what was meant by ‘agricultural income’ as that term was used in the income Tax Act…..”.

31. The learned Addl. Advocate-General contended that some Acts use the expression 200%, 300% and so on. May be But, when Section 3(1) speaks of fixing the rate of tax at a certain percentage of the amount of royalty, it cannot but mean that it should be less than 100%. The discretion given to the Government is to choose the appropriate percentage within the said ceiling we do not find anything in the context to induce us to depart from the ordinary and literal meaning of the expression ‘percentage’. The learned Addl. Advocate-General relied upon the recent decision of the Supreme Court in Gramphone Company of India Ltd. v. Berendra Bahadur Pandey (1984) 2 SCC 534 : AIR 1984, Supreme Court, 667 where the Supreme Court1 had this to say about the meaning of the word ‘import’ in Section 53 of the Copyright Act:—

“The question is what does the word ‘import’ mean in Section 53 of the Copyright Act? The word is not defined in the Copy right Act though it is defined in the Customs Act. But the same word may mean different things in different enactments and in different contexts. It may even mean different things at different places in the same statute. It all depends on the sense of the provisions where it occurs Reference to dictionaries is hardly of any avail, particularly in the case of words of Ordinary parlance with a variety of Well-known meanings. Such words take colour from the context. Appeal to the Latin root would not help. The appeal must be to the sense of the statute. Hidayatullah, J., in Burmah Shell v. Commercial Tax Officer (1961) 1 SCR 902-AIR 1961 SC 315) has illustrated how the contextual meanings of the very words ‘import’ and ‘export’ may vary……”.

32. Then they referred to Section 53 of the Copy right Act and the definition of the word ‘import’ in the Customs Act, and held that the word ‘import’ includes importation for transit across India to Nepal as well. While there can be no dispute with the proposition enunciated in the decision, the question is whether there is anything in Section 3(1), or in the Act, which should induce the Court to depart from the ordinary and normal meaning of the word ‘percentage’ and to adopt a different or an extended meaning. We find none, on the contrary, if we interpret Section 3(T) as not providing any maximum whatsoever and as leaving it to the total and complete discretion of the Government to fix such rate of tax as it things appropriate, the Section may well render itself invalid, for excessive delegation. In such a situation, it would be difficult to say that any guidance is provided by the Section or by the Act in the matter of fixation of rate of tax. None of the safeguards pointed out in the Delhi Municipality's Case AIR 1968, SC. 1232 can be said to be present here, nor does the Act provide for laying of the notification issued under Section 3(1) before the Houses-of Legislature, which is said to be the form of legislative control. The only form of legislative control, if it can be called that, suggested by the learned Addl. Advocate-General, is the power of repeal which the Legislature may exercise if it feels that the rate of tax fixed by the Government is too high. Firstly, we must say that every Act is subject to the Legislature's inherent power of repeal. That by itself can hardly be said to be a sufficient guidance, or sufficient control over the delegate. We are also of the opinion that the decision of the Supreme Court in N.K Papaiah & Sons v. Excise Commissioner (1975) 1 SCC 492 : AIR 1975, Supreme Court, 1007, relied upon by the learned Addl. Advocate-General cannot be said to support his contention. It must be remembered that, that was a case arising under an Excise Act, where no citizen can claim a fundamental right to carry on business in intoxicants. The attack there was that, Section 22 which empowers the Government to fix excise duty at such rate or rates as it may think appropriate was bad for excessive delegation. While repelling that contention, the Supreme Court firstly relied upon the circumstances that Section 71 of the Act, which provides for the Rules made under the Act to be laid before both the Houses of State Legislature for a total period of thirty days, which may be comprised in one or more successive Sessions, is sufficient legislative control, particularly because Section 71 expressly provided that it shall be open to the Legislature to make such modification in the rules as it may think fit. If the Legislature effected any modification, the Rules were to have effect only in such modified from. The Legislature was also given the power to annul such Rules, in which case the Rules shall have no effect whatsoever. Having held that Section 71 provided sufficient legislative control, the court proceeded to point out that the Legislature may also retain its control over its delegate by exercising its power of repeal. This was only by way of an additional reason, and was not the sole reason for upholding the validity of Section 22. It should also be remembered that the decision of the Supreme Court in N.K Papaiah's case (supra), is a decision of a Bench of three Judges, and it could not have purported to lay down a rule different from the one in Delhi Municipality v. B.G.S & W. Mills AIR 1968, S.C 1232, a decision of a Bench of seven Judges. Indeed, this decision expressly refers to the several decisions of the Supreme Court, including one in Delhi Municipality v. B.G.S & W. Mills AIR 1968, S.C 1232 and reiterates their principle.

33. It is equally well settled that, where a provision of an Act is capable of two interpretations, and adopting one would render the provision invalid or unconstitutional, the Court would avoid that interpretation and adopt the other interpretation which would render the Act valid and consistent with the Constitution. We are of the opinion that, even if for any reason. Section 3(1) is capable of being interpreted as not providing the maximum or a ceiling, as the case may be, still it should be read down as containing such a maximum, for adopting the other interpretation would render the very provision unconstitutional and invalid, on the ground of excessive delegation of essential legislative function, absence of any guidence and absence of any legislative Control.

34. For the above reasons, we held that Section 3(1) of the State Act provides a ceiling, as it may be called, on the power of the State Government to fix the rate of tax on mineral rights. The ceiling is 100%. The tax on mineral rights should be less than 100%, but cannot be either 100% or more than 100%. We must also say that the several considerations urged by the counsel for the petitioners for adopting such an interpretation, which we have referred to here in before, cannot also be said to be irrelevant, and must weigh with the Court in determining the proper meaning of the words “at such percentage of the amount of royalty payable” in Section 3(1).

35. (E) Once we hold that Section 3(1) prescribes a ceiling of 100% upon the power of the State Government, the impugned notification automatically becomes incompetent and invalid. Under the impugned notification, the tax has been fixed at 900% of the amount of royalty under Sec. 9 of the Central Act. Prior to the said GO., the rate of tax was 100% of the amount of royalty, as notified in GO.Ms No. 94, dated 26-2-1983. In this batch of writ petitions, of course, the validity of GO.Ms No. 94 is not questioned and, therefore, we need give no declaration with respect to the said notification. Suffice it to declare that GO.Ms No. 23, dated 12-1-1984, impugned herein, is incompetent and invalid, being inconsistent with Section 3(1) of the State Act.

36. We may indicate that we have not gone into the question whether the tax imposed by the impugned GO., constitutes unreasonable restrictions upon the petitioner's fundamental right to carry on their profession and trade. In the light of our conclusions stated above, we thought it unnecessary to go into this question. (F) Our conclusions thus are: (i) the Andhra Pradesh Legislature was prefectly competent to enact the Andhra Pradesh (Mineral Rights) Tax Act, 1975. The Parliament has not placed any limitations upon the power of the Andhra Pradesh State Legislature to enact a law levying tax on mineral rights, and hence the State Act is perfectly constitutional and valid; (ii) Section 3(1) of the State Act prescribes the maximum, beyond which the Government cannot fix the rate of tax. The maxmium prescribed is 100% of the amount of royalty payable under Section 9 of the Mines and Minerals (Regulation and Development) Act, 1957 (Central Act). The tax on mineral rights can only be less than 100% (iii) GO.Ms No. 23, Industries and Commerce (M IV) Department, dated 12-1-1984 is quashed herewith as being inconsistent with Section 3(1) of the State Act.

37. The writ petitions are, accordingly, allowed to the extent indicated above. There shall be no order as to costs, in the circumstances of the case. Advocate's Fee Rs. 100/- in each W.P