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Cuttack: In a major blow to the state government's efforts to collect stamp duty from mines operating under deemed extension provision, Orissa High Court today imposed a stay on steel and mines department's notification in this regard.
A bench comprising Chief Justice C Nagappan and Justice Indrajit Mohanti imposed the stay on both May 9 notification on collection of stamp duty from mines and July 3 order of halting operation of those mines which failed to pay stamp duty by July 9.
The bench was hearing a bunch of writ petitions which challenged the May 9 notification and prayed quashing of Indian Stamp (Odisha Amendment) Act under which the state government on July 3 ordered to stop activities in mines operating under deemed extension provision.
The petitioners included PSUs like Steel Authority of India (SAIL) and Mahanadi Coalfields Ltd (MCL), major private miners like Tata Steel, EMIL, Rungta Mines, Jindal group and mining lobby body Federation of Indian Mineral Industries (FIMI).
During the hearing, the petitioners lawyers argued there was no provision of stopping mines operation under the Mines and Minerals Development and Regulation (MMDR) Act or the Mineral Concession Rule (MCR) in the event of non-payment of stamp duty.
MMDR Act and MCR are considered two vital laws of the land under which mining operations are regulated in the country, they said.
The state government decided to strictly collect stamp duty as 57 iron ore, manganese, coal, chromite and bauxite mines were found extricating minerals under deemed extension without paying a single rupee towards stamp duty.
The state government in April had effected changes to the Indian Stamp Act as the miners were earlier allowed to excavate minerals without renewal of lease because of deemed extension provision.
The state government was therefore not getting any levy though the miners extricated more minerals under deemed extension provision.
The stamp duty rate, according to the amended Act, is equivalent to 15 per cent of the total royalty paid by the miner. The amount will be deducted at the time of execution of lease agreement.
If the renewal of mines lease is rejected, the government has to refund the amount, as per the new law. The state government was supposed to collect about Rs 50,000 crore from mines if it successfully implement the stamp duty.
However, the miners strongly opposed the government efforts and moved high court.
