1) Supreme Court: Sub-Classification is Permissible Within Scheduled Castes To Give Separate Quotas For More Backwards
A 7-judge bench of the Supreme Court(by 6-1) held that sub-classification of Scheduled Castes is permissible to grant separate quotas for more backwards within the SC categories.
The verdict means that States can identify more backwards among the SC categories and can sub-classify them for separate quota within the quota.
The Court clarified that while allowing sub-classification, the State cannot earmark 100% reservation for a sub-class. Also, the State has to justify the sub-classification on the basis of empirical data regarding the inadequacy of representation of the sub-class.
State Of Punjab And Ors. v Davinder Singh And Ors. C.A. No. 2317/2011 dated 1-8- 2024.
2) Supreme Court: States' Power To Tax Mining Rights & Mineral-Bearing Lands Not Limited By MMDR Act; Royalty Not Tax
The Supreme Court 9-judge constitution bench today held by an 8:1 majority that States have the power to levy tax on mineral rights and that the Union law - Mines and Minerals (Development and Regulation) Act 1957 - do not limit such power of the States.
Chief Justice of India DY Chandrachud wrote the judgment on behalf of himself and seven colleagues. Justice BV Nagarathna delivered a dissenting judgment.
Conclusions of the Majority judgment :
1. Royalty is not within the nature of a tax as it is a contractual consideration paid by the lesssee to the lessor under the mining lease. Both royalty and dead rent do not fulfil the characteristics of tax. The judgment in India Cement Ltd. v. State of Tamil Nadu (1990) 1 SCC 12 [34] holding royalty to be a tax is overruled. The payment made to the Government cannot be deemed to be a tax merely because the statute provides for the recovery of the arrears.
2. Entry 54 of List 1(Union list) is a regulatory entry dealing with the regulation and development of mines and minerals. Regulatory entries are distinct from taxing entries. Entry 54 of List 1, being a general entry, does not include the power of taxation of the Union.
3. The legislative power to tax mineral rights vests with the state legislatures. Parliament does not have the legislative competence o tax mineral rights under Entry 54 of List 1, it being a general entry. Since the power to tax mineral rights is enumerated in Entry 50 of List 2, Parliament cannot use its residuary power with respect to that subject matter.
4. Entry 50 of List 2 envisages that the Parliament can impose any limitations on the legislative field of the States through a law relating to mineral development. The MMDR Act, as it stands, does not impose any such limitations.
5. There is no specific provision in the MMDR Act imposing limitations on the taxing powers of the State. Royalty under S.9 of the MMDR Act is not in the nature of a tax. Section 9 MMDR Act does not impose any limitation on the power of States to tax minerals. The limitations imposed by S.9 on royalties do not amount to limitations on the State's powers.
Mineral Area Development Authority v. M/S Steel Authority Of India & Ors (CA N0. 4056/1999) dated July 25, 2024.
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