Supreme Court Rejects Centre's Plea on Mineral Tax Refunds

The Supreme Court has rejected the Centre’s request to apply its recent verdict prospectively, which affirmed the states' power to levy taxes on mineral rights. States can now seek refunds of royalties from April 1, 2005. The Centre argued it would significantly impact public finances, estimating a Rs 70,000 crore payout.

The Supreme Court on Wednesday dismissed the Centre's plea seeking a prospective application of its July 25 verdict that affirmed states' authority to levy taxes on mineral rights and mineral-bearing land, allowing them to claim refunds from April 1, 2005.

The nine-judge bench, led by Chief Justice DY Chandrachud, stated that the decision would not be applied prospectively. However, they outlined conditionalities for the payment of past dues, allowing the Centre and mining companies to make staggered payments to mineral-rich states over the next 12 years.

The Centre opposed states' demands for royalty refunds dating back to 1989, citing a substantial financial impact, with estimates suggesting a Rs 70,000 crore depletion of public sector coffers. The July 25 verdict was a majority decision that overturned the 1989 ruling, which had vested the sole power to tax mineral rights with the Centre.

(With inputs from agencies.)