New Delhi

The Supreme Court of India on Wednesday said it will hear on May 20 a batch of pleas concerning the legislative authority to levy taxes on mineral rights, amid the pendency of a curative petition filed by the Centre.

A bench comprising Justices Vikram Nath, Sandeep Mehta and Vijay Bishnoi agreed to list the matter after hearing submissions from various parties.

Appearing for the Centre, Solicitor General Tushar Mehta requested the bench to defer the hearing, pointing out that the Union government's curative petition on the issue is still pending before the apex court.

Several lawyers appearing in the matter supported the Centre’s request and sought a later hearing, suggesting the matter be taken up in July after the curative petition is decided.

However, counsel representing some state governments opposed any further delay, arguing that review petitions had already been dismissed and that some of the disputes date back to 1999 and 2011.

After hearing all sides, the bench fixed May 20 for the next hearing.

The dispute stems from a landmark July 25, 2024 judgment by a nine-judge Constitution bench of the Supreme Court, which in an 8:1 majority held that the power to tax mineral rights rests with state legislatures.

The court ruled that Parliament does not have legislative competence under Entry 54 of List I of the Constitution—dealing with regulation of mines and mineral development—to impose such taxes.

In September 2024, the apex court dismissed review petitions challenging that verdict, following which the Centre moved a curative petition.

While upholding the powers of states, the Constitution bench had clarified that Parliament may still legislate to place limitations on states’ taxation powers over mineral rights.

In the lone dissenting opinion, Justice B V Nagarathna held that royalty is effectively in the nature of a tax or exaction and that the Centre does possess authority in this domain.

In another significant ruling on August 14, 2024, the Supreme Court allowed mineral-rich states to recover royalty and tax dues worth thousands of crores from mining companies and the Centre, with retrospective effect from April 1, 2005.

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The court directed that these payments be made in instalments over 12 years beginning April 1, 2026, while also waiving interest and penalties on tax demands for the period prior to July 25, 2024.