Karnataka Governor sends Bill to tax minerals for Presidential nod

Bengaluru: Governor Thaawarchand Gehlot on Friday reserved the Karnataka (Mineral Rights and Mineral Bearing Land) Tax Bill for President Draupadi Murmu’s assent, arguing that the proposed legislation would “transgress” Constitutional provisions and “adversely affect” another state.

Passed during the Belagavi session of the legislature in December, the Karnataka (Mineral Rights and Mineral Bearing Land) Tax Bill allows the government to levy taxes, with retrospective effect, on mineral rights and owners of mineral-bearing lands. This is estimated to fetch Rs 4,713 crore.

The government came up with the Bill following a Supreme Court ruling that states could collect taxes on mineral-bearing land and mining rights with retrospective effect from April 1, 2005. The proposed rate of tax under the Bill ranges from Rs 20 to Rs 100 per ton for different minerals under all categories of mines.

Gehlot said that the subjects of forests, mines and minerals are governed under central laws -- the Forest Conservation Act, the Environmental Protection Act and the Mines and Minerals (Development and Regulation) Act.

“...there is an encroachment of State Legislature / Bill on the field occupied by the Parliament [sic],” Gehlot stated.

“The Directive Principles of State Policy...clearly contemplates and mandates that the ownership and control of the material resources of the community are so distributed to serve the common good, and the operation of the economic system does not result in concentration of wealth,” Gehlot stated, adding that the state government, through the Bill, “proposes to collect huge and substantial amounts to enrich itself”.

The Bill, Gehlot said, would have an impact on the three central laws mentioned earlier.

“The present Bill contemplates recovery of taxes on sales with effect from 2005 (which) is also amounting to occupying and repugnant to the field occupied by the law made by the Parliament or Supreme Court of India,” Gehlot stated, citing the top court’s judgement in the case between Samaj Parivartana Samudaya & Others vs State of Karnataka.

“The objective of the Bill appears to transgress the other Constitutional limitations and provisions,” Gehlot stated. “The objective of the Bill (is) also calculated to adversely affect the legitimate interest of other state or its people.”