Supreme Court Upholds States' Right to Tax Minerals Retroactively

In a landmark ruling, the Supreme Court allowed mineral-rich states to recover royalty and tax dues on mineral rights and lands from the Centre and mining companies since April 1, 2005. The judgement ruled that states, not Parliament, have legislative power to tax mineral rights, affecting financial outcomes significantly.

In a landmark ruling, the Supreme Court upheld the authority of mineral-rich states to recover royalty and tax dues on mineral rights and lands retroactively from April 1, 2005. This decision allows states to reinforce their fiscal autonomy against the Centre and mining companies. The ruling came with an 8:1 majority.

Chief Justice DY Chandrachud, pronouncing the judgment on behalf of a nine-judge constitution bench, rejected the Centre's plea to apply the July 25 verdict prospectively. The Centre had argued that retrospective application would lead to massive financial losses for PSUs.

The bench announced staggered tax demands over 12 years starting April 1, 2026, while waiving interest and penalties prior to July 25, 2024. This decision is crucial as it balances the fiscal interests of states while ensuring justice for past financial dealings in the mineral sector.

(With inputs from agencies.)