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“Royalty is in the nature of a tax or an exaction. It is not merely a contractual payment but a statutory levy under Section 9 of the MMDR Act.”
Supreme Court said that authorizing the Central Government to lay down the terms of mining leases and grant approval to concessions, the MMDR Act seeks to ensure that there is uniformity in the terms for working of mines and extraction of minerals.
“The payments made to the Government cannot be deemed to be a tax merely because the statute provides for their recovery as arrears”.
This matter was the oldest pending nine-judge Bench case before the Supreme court. The Bench had reserved its judgment in the matter on 14-03-2024