In Brief
The State of Rajasthan issued a circular in 2008 requiring construction contractors working on government projects to obtain a short-term permit for minerals and deduct royalty from their bills, with a refund mechanism if they could prove they purchased royalty-paid minerals. The Rajasthan High Court quashed the circular, finding it unreasonable. The Supreme Court allowed the government's appeal, holding that the circular merely prescribed procedure for collecting royalty to prevent illegal mining, not a levy. Since contractors could recover deductions by providing receipts, there was no financial burden. The Court upheld the condition as a reasonable prerequisite for government contracts serving the public interest of checking illegal mining."
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