In Brief
A contractor in Jaipur purchasing minerals from the open market for construction claimed that the Government's deduction of royalty from bills was unlawful. The State argued it was verifying that only legally-mined minerals were used. The Supreme Court held that royalty is payable only by mining lease holders and only once per mineral. If a contractor proves minerals were purchased from legitimate sources where royalty was already paid, no further royalty is due. The Court remitted the matter to the Mining Engineer to consider the contractor's representation with supporting documents and decide within three months on refund entitlement.", "obiter":["The Court noted that earlier Government Orders (dated 22.09.1994 and 03.07.1995) providing for automatic 2% deductions were subsequently replaced by a more nuanced scheme requiring verification of mineral sources.", "The Court observed that the High Court in R.S. Shekhawat case had already protected contractors' interests by permitting them to approach the mining department for refund upon proving royalty-paid status of minerals.", "The specific letter dated 26.03.2002 was merely a request for compliance with earlier circulars and was not independently challengeable without also challenging the underlying circulars."]
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