Supreme Court reaffirms royalty is not in the nature of tax as review petition filed dismissed
By: Admin
October 09, 2024
Categories: Important Pronouncements
4 Min Read
The Hon’ble Supreme Court, in the case of Karnataka Iron and Steel Manufacturers Association v. Mineral Area Development Authority (Diary No. 38926/2024, dated September 24, 2024), dismissed the review petition filed against the judgment passed in the case of Mineral Area Development Authority v. M/s. Steel Authority of India and Anr. (Civil Appeal No. 4056-4064 of 1999, dated July 25, 2024). The court reaffirmed that the royalty paid to the government does not constitute a tax.
Facts:
The Karnataka Iron and Steel Manufacturers Association (“the Petitioner”) had filed a review petition challenging the earlier judgment passed by the Supreme Court in the Mineral Area Development Authority v. M/s. Steel Authority of India case. In the July 25, 2024 judgment (“the Impugned Judgment”), the Supreme Court had dismissed the Petitioner’s appeal and held that royalty payments to the government are contractual in nature, arising out of agreements between the government and the Petitioner. These payments, the court ruled, do not qualify as taxes merely because the statute allows for the recovery of arrears.
Held:
In the review petition, the Supreme Court upheld its previous decision, maintaining that royalty payments are not taxes but rather contractual considerations. Therefore, the court dismissed the review petition and confirmed that royalty would not fall under the category of taxes.
[Click Here for Official Judgment Copy]
