Supreme Court said the decision of the Constitution Bench was wrong, said- there is no royalty tax on minerals

In a very important decision, a nine-member Constitution Bench of the Supreme Court has declared the 35-year-old decision of its own Constitution Bench as wrong. Chief Justice DY Chandrachud said that Justice BV Nagarathna had given a dissenting judgment on whether royalty on minerals is taxable or not. The apex court overturned the decision by a majority of 8:1.

The apex court said in its judgment that Parliament does not have the power to impose tax on mineral rights under the provisions of the Constitution. It said that under the Constitution, the states have the legislative right to impose tax on mines and mineral-rich land. The decision given by the Constitution Bench of seven judges in the year 1989 is not correct, which said that there is royalty tax on minerals. Justice BV Nagarathna said that the states do not have the legislative right to impose tax on mines and mineral-rich land.

The states had sought clarification from the Supreme Court on the recovery of taxes imposed so far by the Center on mines and minerals. The apex court said that it will consider the issue of recovery of taxes imposed so far by the Center on mines and minerals on July 31.