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regular-article-logo Thursday, 07 May 2026

Supreme Court to hear mineral tax dispute between Centre and states on May 20

The Centre seeks review of the nine-judge verdict backing states’ royalty claims while opposing massive retrospective payouts linked to mining dues

Our Bureau Published 07.05.26, 07:53 AM
Supreme Court mineral tax case

Supreme Court Of India File picture

The Supreme Court will take up on May 20 pleas related to the states’ legislative power to tax mineral rights and dues that the Centre owes to them, after the Union government said its curative petition challenging an earlier nine-judge bench ruling on the issue was still pending.

Solicitor-general Tushar Mehta informed the bench of Justices Vikram Nath, Sandeep Mehta and Vijay Bishnoi that the issue relating to the states’ power to levy mineral tax can be taken up after the curative petition is heard by the apex court.

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The curative petition was filed by the Centre in November last year as a last-ditch effort to deny states the right to collect royalty running into several thousands of crores collected by the Centre towards mineral tax. The Centre sought a fresh nine-judge bench hearing on the matter, citing “international ramifications and federal structure principles”.

The curative petition was filed for recalling the nine-judge bench ruling of August 14, 2024, in favour of the states and the subsequent dismissal of the Centre’s review petition on October 4, 2025.

The curative petition is the final legal recourse for a litigant to seek overturning of the original and review judgments of the apex court. Nevertheless, in exceptional cases like the 2006 Nithari serial killings, the apex court acquitted convict Surendra Koli in November last year by setting aside his conviction and death penalty despite dismissing his appeal, review petition and the curative petition.

On October 4 last year, the top court had dismissed by an 8:1 majority a batch of petitions filed by the Centre and its instrumentalities seeking a recall of the bench’s August 14 ruling that states are entitled to seek refund of royalty collected by the Centre towards mineral tax.

It had also dismissed the plea for an “open-court” hearing of the review petitions, which are mostly held within the chambers of the judges without the presence of lawyers or litigants.

However, Justice B.V. Nagarathna, who was the sole dissenting judge in the August 14 verdict, had on October 4 reiterated her stand that only the Centre had the right to collect tax on minerals.

The majority quorum of the eight judges had ruled in favour of the states.

On August 14, the constitution bench, by an 8:1 majority, ruled that the states are entitled to seek refund of royalty collected by the Centre, overruling a 35-year-old judgment of another constitution bench that had taken a contrary view.

However, upon a request by the Centre and PSUs such as Steel Authority of India Limited, which complained of a heavy financial burden, the bench allowed the recovery of dues by the states retrospectively from April 1, 2005. It also ruled that interest and penalties on demands before July 25, 2024, would be waived for assessees.

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