RUMA PAL - (1.) , J.
(2.) THE appellant manufactures cement at its factory in Kurnool District, Andhra Pradesh. THE main raw-material used for the manufacture of cement is limestone. THE land on which the factory is situated is owned by the appellant. In 1957 and 1959 the appellant was granted two mining leases by the State government for extracting limestone covering a total area of 3597 acres and 85 cents. Under the lease deeds the appellant was liable to pay royalty in respect of the limestone quarried from the mines in the leased areas at "5% of the sale value at the pit's mouth subject to a minimum of 0.37 paise per tonne of limestone". THE rate of royalty payable under the lease deeds was revisable under sub sections (1) and (3) of section 9 of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as "the Act"), which as they then stood read: "9(1) THE holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed by him from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. 9(2) xxx xxx xxx xxx 9(3) THE Central government may, by notification in the official gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification Provided that the Central government shall not - (a) fix the rate of royalty in respect of any mineral so as to exceed twenty per cent of the sale price of the mineral at the pit's head, or (b) enhance the rate of royalty in respect of any mineral more than once during any period of four years". Sub section 3 of section 9 has since been amended by the Mines and Minerals (Regulation and Development Amendment) Act, 1972, (Act 56 of section 1972) by which inter alia the proviso to sub section 3 was deleted and the only limit at present on the Central government's power to enhance or reduce the rate of royalty is that the enhancement cannot be made more than once during any period of four years. We are concerned with the royalty and cess payable by the appellant for the period prior to the 1972 amendment namely for the period 11.10.1962 to 10.12.1971. The present dispute has arisen out of a claim made by the appellant in a suit against the respondents claiming refund of excess royalty alleged to have been paid by the appellant to the respondents between the period 11.10.1962 to 10.12.1971 togetherwith the cess thereon as well as for interest on such excess payment. According to the claim in the appellant's plaint, the appellant had paid royalty at the agreed rate of 0.37 paise per tonne on the limestone quarried by it from the leased areas till November 1962. On 16.11.1962 the Central government issued Notification No. M11-152 (26) 62 amending the Second Schedule to the Act with effect from 10.11.1962. The Notification sought to fix royalty on limestone at the rate of 0.75 p. per tonne subject to a rebate of 0.38 p. per tonne to be given on limestone beneficiated by froth floatation method. The rate of royalty was again revised by an amendment of the Second Schedule by a second Notification dated 8.7.1968. According to this notification with effect from 1.7.1968, royalty of Rs.1.25 paise per tonne was payable in respect of superior grade limestone and at the rate of 0.75 p. per tonne for inferior grade limestone. Since the limestone quarried by the appellant was of inferior grade, it continued to pay royalty at the rate of 0.75 p. per tonne. In 1970 the Central government issued a third Notification in exercise of powers conferred by section 9 (3) of the Act. The third Notification No. GSR 200 dated 29.1.1970 did away with the difference in the rate of royalty on the basis of the grade of limestone and fixed the royalty payable in respect of all grades of limestone at Rs.1.25 per tonne. Incidentally both the Courts below had incorrectly recorded that the third notification fixed the rate of royalty at 0.75 p. per tonne. It is not in dispute that the appellant had paid for the limestone quarried by it subsequent to 29.1.1970 at 0.75 p. per tonne. The appellant has claimed it had submitted monthly and annual returns to the concerned authorities which disclosed the quantity of limestone quarried during each month, year, the total value and stock in hand, the royalty payable and paid together with land cess and the pit's mouth value of limestone.
(3.) THE appellant challenged the second and third Notifications by way of a writ petition (W.P. No. 3276 of 1970) in the High Court of Andhra Pradesh on two grounds: first that the rate of Rs. 1.25 per tonne did not reflect 20% of the sale price under proviso (a) to section 9(3) and second that there could be no revision in 1970 after the 1968 notification in contravention of clause (b) of section 9(3). THE writ petition was disposed of on 22.2.1972 holding that under the first proviso to sub section 3 of section 9 of the Act, the Central government did not have the power to enhance the rate of royalty in excess of 20% of the sale price of the limestone at the pit's head and directed the respondents to refund any amount which the appellant may have paid in excess to them. THE submission of the respondents that the rate of Rs. 1.25 was fixed on the basis of an All India average was rejected following an earlier decision of the same High Court. This is what the learned judge who disposed of the appellant's writ petition said: " What is stated in clause (a) is very clear. THE rate of royalty has to be fixed so as.not to exceed 20 per cent of the sale price of the mineral at the pits head. Evidently, the question of taking averages into consideration does not arise. THE same view was taken by my learned brother Kuppuswami, J., in Writ Petition No. 5758/70 and batch, where the very same notification had been challenged on the grounds raised before me. In that case, it was argued that it was the All India average that had been taken into consideration. THE learned judge come to the conclusion that the royalty cannot in any case exceed 20 per cent of the sale price of the mineral at the pit's head and, therefore, the notification issued by the government would have to be limited to 20 per cent of the sale price at the pit's head. THE learned judge also directed that the government will ascertain the sale price of the limestone at the pit's head in each case and charge 20 per cent thereof as royalty and refund the excess, if any, paid by the persons concerned. I find myself in entire agreement with the direction given by the learned judge. I also direct that the government will determine the sale price of the lime stone quarried by the company at the pit's head and charge 20 per cent thereon as royalty and if the company has paid any excess, refund the same to the company". The allegation of contravention of clause (b) of the proviso to section 9(3) was however rejected.;