SOUTH EASTERN COALFIELDS LIMITED ETC. ETC.versusCENTURY TEXTILES AND INDUSTRY LTD. AND ORS

       SOUTH EASTERN COALFIELDS LIMITED ETC. ETC.
A                         v.
      CENTURY TEXTILES AND INDUSTRY LTD. AND ORS.

                                 APRIL 4, 1991

B           [S. RANGANATHAN AND N.M. KASLIWAL JJ.]

          Constitution of India, 1950: Schedule VII List I Entry 54 and List II
    Entries 23, 49, 50 and 66--Mineral areas development-Cess imposi-
    tion of-Competency of state Legislature to legislate.

        Articles 142, 246 and 265-Statute declaration of invalidity-
c   Refund-Whether automatic and inevitable consequence.

         Madhya Pradesh Karadhan Adhiniyam 1982/Madhya Pradesh
    Areas Development Cess Rules 1982-Ss. 8, 9/Rule JO-Mineral Areas
    development-Cess-1mposition of.
D
          The levy of cess under the Madhya Pradesh Karadhan A.dhini-
    yam 1982 is not a valid levy has been held by the Madhya Pradesh High
    Court in Hirata! v. State of M.P., 1986 MPL J/514 and this has been
    confirmed by this Court in its judgment dated April 4, 1991 in the
    appeal preferred by the State of Madhya Pradesh.
E
          Despite the judgment of the High Court the amounts collected
    from various assessees had not be refunded. The State was continuing
    to collect the cess on the strength of interim orders in an appeal filed in
    this Court.

F         The State Government and the Coalfields concerned preferred
    petitions for leave to appeal to this Court.

          Disposing of the appeals, this Court,

          Held: (l) The collection of any cess under the Madhya Pradesh
G   Karadhan Adhiniyam 1982 subsequent to the date of the judgment of
    the Madhya Pradesh High Court in Hirala/'s case 1986 MPLJS14 can-
    not be upheld. [ l90D I

          (2) The respondents will not be entitled to the refund of any cess
    paid or coUected prior to the date of said judgment. They would, how-
H   ever, be entitled to the refund of the amounts collected subsequent to
                  COALflELDS 1·. CENTURY TEXTILES [RANGANATllAN . .I [          189
..
           that date from the Coalfields or the State, as the case may be, along-
                                                                                       A
           with the interest in cases where there is an interim direction or under-
           taking to pay such interest at the dates specified in such direction or
           undertaking. [ 190E)

                 CIVIL APPELLATE JURISDICTION: Civil Appeal No. 550 I
           of 1990 etc. etc.                                                           B

                From the Judgment and Order dated 22.8. 1990 of the Madhya
     -;    Pradesh High Court in Misc. P. N. 845 of 1990.
     /·
                R.B. Datar, Satish Agnihotri, P.S. Nair, T.G.N. Nair and Shri
           Narain for the Appellant.
                                                                                       c
                R.F. Nariman, Abbay Sapre, Sandeep Narain and S.K.
           Agnihotri for the Respondents.

                 The Judgment of the Court was delivered by
                                                                                       D
                 RANGANATHAN, J. These Civil Appeals and SLPs raise the
            same issues as have been dealt by us in our judgment of even date in
          · Civil Appeal No. 1640 to 1662 of 1986 and connected cases. They arise
            in the following circumstances.

                 In the connected judgment referred to above we have held that         E
           the levy of cess under the Madhya Pradesh Karadhan Adhiniyam, 1982
           (Act 15 of 1982) is not a valid levy, In fact it had been so held by the
           Madhya Pradesh High Court in Hiralal v. State of M.P., [1986) MPLJ
           514. The appeal preferred by the State of Madhya Pradesh has been
           disposed of by us in the connected batch of cases above referred t,o.
                                                                                       F
                 Despite the judgment of the High Court the amounts collected
           from various assessees had not been refunded; on the contrary, .the
           State appears to have continued collecting the cess apparently on the
           strength of the interim orders obtained in one of the above appeals viz .
     .,    C.A. No. 1649/86 though, as pointed out by us in the connected judg-
           ment no such modification seems to have been ordered by this Court          G
           of the initial orderof 2.5.86.

                In April/May, 1990, some of the assessees filed writ petitions in
           the High Court challenging the continued recovery of the cess and
           asking for the refund of amounts already collected. The respondents
           brought to the notice of the Court the orders of this Court in the          H
    190                   SUPREME COURT REPORTS            [1991) 2 S.C.R.

A   earlier matter and ·pleaded that since the collections were being made
    in pursuance of the orders of this Court the writ petitions could not be
    entertained. The High Court rejected the respondent's plea and al-         1
    lowed the writ petitions. The Coalfields concerned and the State Gov-
    ernm1:nt have preferred petitions for leave to appeal from the order
    dated 28.7.90 and 22.8.90 in these cases. In one set of these appeals
B   leave has been granted by us earlier: C.A. Nos. 5501and5502 of 1990.
    The other SLPs had been listed before us subsequent to our hearing
    the main appeals and it was agreed that suitable orders may be passed
    thereon in the light of the conclusion we reach in the main batch of
    appeals. We grant leave to appeal in all the Special Leave Petitions
    and proceed to dispose of all the appeals by this judgment.
c
        These appeals have to be disposed of in the light of our judgment
  in the connected batch of cases referred to above. We have held there
  that the collection of any cess under Act 15 of 1982 subsequent to the
  date of the judgment of the Madhya Pradesh High Court in Hirala/'s
  case [ 1986) MPLJ 514 cannot be upheld. For the reasons set out in the
D judgment in the connected cases, we hold that the appellant will not be
  entitled to the refund of any cess paid or collected prior to the date of
  the said judgment. They would, however, be entitled to the refund of
  the amounts collected subsequent to that date from the coalfields or
  the State, as the case may be, along with interest in cases where there
  is an interim direction or undertaking to pay such interest at the rates
E specified in such direction or undertaking.

          With these observations these appeals are disposed of.

    V.P.R.
                                                       Appeals disposed of.