BHUBANESWAR: The state government on Thursday informed the Assembly that the Orissa Rural Infrastructure and Socio-Economic Development (ORISED) Act, 2004 is required to be revived before implementation of the Supreme Court order for levy of tax on mineral-bearing land.
Responding to a question by BJD MLA Ganeswar Behera, Steel and Mines minister Bibhuti Bhushan Jena said ORISED Act, 2004 and the rules framed thereunder in 2005 have been declared ultra vires by the Orissa High Court in December 2005. The special leave petition filed in the Supreme Court in 2006 by the state government challenging the high court order is still pending for disposal.
Since the original Act is invalid, it may not be possible to implement the law retrospectively for legal impediments. Enactment of a similar law afresh may encounter legal hurdles. It would be difficult to compute the arrear tax from mining lease holders from 2005 without revalidation of the legislation struck down by the high court, the minister said.
Sources in the mining sector said apart from the state government appeal, several affected miners have also moved the apex court seeking to be heard before disposal of the special leave petition.
On August 14, 2024, the Supreme Court clarified that the state could collect the arrear tax retrospectively from April 1, 2005 but gave a breathing period to mine owners by directing the states that the tax arrears can be paid over a staggered period of 12 years from April 1, 2026. In all possibility, the apex court may use this time to dispose of all pending petitions of different states relating to the case.
The state government is reported to have sought the opinion of the Law department on the July 25 Supreme Court ruling and August 14 clarification on the ruling. It is likely to approach the apex court soon for disposal of its pending petition. Only after the validation of ORISED Act, Odisha will be able to levy taxes on mineral-bearing areas.
According to mining industry sources, the Supreme Court order will come as windfall for Odisha which is likely to recover more than Rs 1 lakh crore tax arrears from mining lease holders. It is also expected that the state may collect an annual tax of around Rs 12,000 crore under the ORISED Act, once it comes into effect.