Supreme Court: States Retain Taxation Rights Over Mineral Resources Amid Parliament Oversight

The Supreme Court's majority judgement affirms states' authority to tax mineral rights, though Parliament can impose limitations to support mineral development at a national level. The ruling hinges on the balance of powers within the federal framework, ensuring state autonomy while allowing for federal oversight.

The Supreme Court has ruled, by an 8:1 majority, that states retain the legislative power to tax mineral rights, yet this power can be constrained by Parliament to facilitate uninterrupted mineral development nationwide. A nine-judge bench led by Chief Justice DY Chandrachud elucidated that while states can levy taxes on mineral rights, they must operate within the confines of any limitations set out by Parliament through legislation aimed at mineral development.

Chief Justice Chandrachud, along with justices Hrishikesh Roy, Abhay S Oka, JB Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma, and Augustine George Masih, emphasized that under Entry 23 of List II, Parliament has the regulatory authority over mines and mineral development, but concerning Entry 50 of List II, states' taxing power is only moderately restricted.

Noting the critical role of state revenues in infrastructure, health, education, and overall welfare, the bench highlighted the necessity for constitutional courts to remain aware of the broader implications when adjudicating on state taxation powers. The verdict underscores the delicate balance between state and federal powers, aiming to preserve the federal character of India's constitutional arrangement.

(With inputs from agencies.)