Judgment of the Allahabad High Court regarding regulatory fees imposed on the minerals which were brought from other states into Uttar Pradesh, 18/08/2023

  • 18/08/2023

Judgment of the Allahabad High Court in the matter of Chhatarpur Crasher Association & Others Vs State of Uttar Pradesh & Others dated 18/08/2023.

The petitioners are in the business of extracting, crushing transporting, and selling the minor minerals in Madhya Pradesh and in other states. They have challenged the 48th Amendment in Uttar Pradesh Minor Minerals (Concession) Rules, 1963, Rule 21 (4) and Rule 70 (2) of the Uttar Pradesh Minor Mineral (Concession) Rules, 2020, and Rule 21 (5) and Rule 72 (2) of the Uttar Pradesh Minor Mineral (Concession) Rules, 2021 and the Government order dated February 24, 2020 and August 10, 2022.

The counsel for the petitioner said that by way of the 48th amendment the Uttar Pradesh government notified Uttar Pradesh Minor Minerals (Concession) (Forty Eight Amendment) Rules 2020, whereby the state government has added Rule 21 (4). By Rule 21 (4) of the Amended Rules 2020, the state government has reserved the power to impose regulating fees on minerals which were brought from other states into the state of Uttar Pradesh.

Counsel for the petitioners submitted that "the Regulating Fees was imposed because of the difference of rate in minor minerals in other State as compared to the State of Uttar Pradesh. This reason for imposing regulating fees violates the very objective for which the Rules have been framed".

The Allahabad High Court said that the state has the power to frame rules under Section 15-1 of the MMDR Act. "The Rule 21(4) and Rule 70(2) of Rule, 2020 and the Rule 21(5) and Rule 72(2) of UP Mining and Concession Rules, 2021 is intra vires to the provisions of MMDR Act," said the order passed by the bench of Justice Mahesh Chandra Tripathi and Justice Prashant Kumar.

The government order dated February 24, 2020 and August 10, 2022  issued charging the regulatory fees on the minerals dropped from other state into the state of Uttar Pradesh is held valid as the same has been issued in accordance with the aforementioned rules and in furtherance of the new Mining Policy, 2021. Further, the regulatory fees imposed do not violate Part XIII of the Constitution of India.

The Allahabad High Court noted that the perusal of the rules makes it clear that full regulatory control vests with the state over transportation of minerals more so, upon minor minerals. Section 4(1-A) of the Mines and Minerals (Regulation and Development) Act, 1957 gives plenary power to the state government to regulate transportation of minerals. The entire field of transportation stands regulated at the hands of the state government whether it is intra-state or it is inter-state, ruled the High Court, August 18, 2023.