Ranchi, May 7: High court today set aside a resolution to increase “surface rent” of land given on mining lease.
The executive order passed by the mines and geology department in June 2005 had caused quite a flutter among the mining community as the enhanced rent ran into a couple of thousand crores.
A division bench observed that “the state government does not have any legislative competence to enhance the surface rent of land allocated for mining of major and minor minerals”. “When the imposition of surface rent is beyond the legislative power of the state, a demand of it in itself is uncalled for,” the court said.
Forty-eight companies had moved court against the resolution by which the rent was increased by five per cent. They said the tax had been imposed as per commercial rate and not according to land revenue rates as stated in Chhotanagpur Tenancy Act.
The state refuted the charges saying the rent had not been increased since 1962 and it exercised right to nominally increase after 45 years on the basis of a report by former mines and geology commissioner K. Abraham in 1965.
Eastern Zone Mining Association president Nandlal Rungta said the court decision was a big relief. “Royalty is being paid as per minerals and the added surface rent would have been detrimental to our interests.”