BHUBANESWAR: The Odisha government on Tuesday said it will take rational steps in the best interest of the state so far as implementation of the Supreme Court judgment on powers of states to levy tax on mineral-bearing land is concerned.
Replying to the demand for grants of Steel and Mines department in the Assembly, ministerBihuti Bhusan Jena said the then BJD-BJP coalition government had enacted the Orissa Rural Infrastructure and Socio-Economic Development (ORISED) Act, 2004 to augment the revenue of the state for undertaking development of infrastructure, education and socioeconomic progress of rural and mining areas.
Accordingly, the state government had framed rules under the Act in 2005. As per the rules, the state government was supposed to levy tax on the annual value of a mineral-bearing land for carrying out mining operations in a financial year.
Challenging the legislation, public sector company NALCO and several others moved the Orissa High Court in 2005. The high court in its December 5, 2005 order struck down the ORISED Act. The state government filed a special leave petition in the Supreme Court in 2006.
Hearing the case, the apex court ruled that the states have the power to collect tax on mineral-bearing land. The top court also said that royalty paid by miners to the Centre can’t be called a tax but a contractual payment.
The Supreme Court further clarified on August 14, 2024, that the state could collect the arrear tax retrospectively from April 1, 2005. The court also stated that the tax arrears can be paid over a staggered period of 12 years from April 1, 2026.
Meanwhile, the state government has collected a fine of Rs 16,103.96 crore from mining lease holders who had done excess mining in violation of mining plan and other statutory rules. The central empowered committee appointed by the Supreme Court had computed the total penalty at Rs 16,169.14 crore.
Similarly, the government has collected Rs 1,101.69 crore as fine as against Rs 1,890.83 crore imposed on the miners for violation of mining plan and consent to operate provisions.