(1.) UNION of India has taken resort to Articles 226 and 227 of the Constitution of India and seeks quashing of order Annexure X by which monetary liability to the extent of Rupees Fifteen thousand eight hundred sixty only has been imposed.

(2.) THE brief facts are as under :

Union of India required some land for providing dual railway track falling within the territorial limits of the State of Madhya Pradesh. Notifications under Sections 4 and 6 of the Land Acquisition Act, 1894 were issued. Further steps were taken under Section 9 of the Act and the land which was subject-matter of acquisition came to vest in the Union of India free from all encumbrances. Executive Engineer, Central Railway, Jhansi, proceeded with the job of providing dual railway track. For this purpose, the ground level had to be raised. The railway administration resorted to lifting the earth from the vacant land acquired by it. In this way the requisite height for laying the dual railway tract was achieved.

(3.) SOMEHOW or the other, the Mining Inspector, Datia formed a view that the lifting of the earth from the land owned by the Union of India fell within the term "mining operation" and accordingly called upon the petitioner Union of India to pay royalty. This position was controverted by the petitioner but it failed to persuade the Mining Officer and other functionaries right till the Board of Revenue. The Board of Revenue passed an order on 10th of January, 1984 by which the various contentions raised by the Union of India were rejected. It came to the conclusion that the provisions of Section 248 (1) of the M. P. Land Revenue Code, 1959 (hereinafter referred to as the code, were attracted to the facts of the case and as mining operations had been carried out, the Union of India became liable to pay the royalty. The appeals preferred before various departmental authorities having failed, the present petition under Article 226 of the Constitution was filed.

(4.) THE learned counsel for the Union of India has contended :

(i) that the lifting of the earth from one level to another does not amount to mining operation; (ii) that the provisions of Section 247 of the M. P. Land Revenue Code are not attracted to the facts of this case and even if it be presumed that they are attracted, there is a provision in the shape of Section 264 of the Code which exempts the properties which are owned or which vest in the Union of India; (iii) that, payment of royalty under Rule 3 of Minor Mineral Rules for extraction of earth from land belonging to the Government is exempt; (iv) that, if any earth is taken for certain purposes such as falling within the purview of Rule 3 (v), then no royalty is payable; (v) that, under the Mines Act, 1885 the minerals if any would vest in the Government as no express reservation was made in the notification by which the land was acquired; and (vi) that, the property which is owned by the Central Government is exempt from taxation on account of the provisions contained in Article 285 of the Constitution of India.

(5.) HE has also relied on a judgment of this Court reported as Khusiram v. State of M. P. , 1981-2 MPWN 247. In this case, it was held that where the material which may otherwise attract Royalty would attract no such levy when it is used for construction of Government work and the State Government is not within its right to charge royalty from the contractor. He has also placed reliance on a decision given by the Punjab and Haryana High Court in M/s. Amar Singh Modi Lal v. State of Haryana, AIR 1972 P and H 256.

(6.) THERE is merit in the contention of the counsel for the Union of India. Article 285 was interpreted in Union of India v. The City Municipal Council, Bellary, AIR 1978 SC 1803 [LQ/SC/1978/239] . Para 7 of the judgment is relevant and it reads as under :

"article 285 reads as follows : " (1) The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State. (2) Nothing in clause (1) shall, until Parliament by law otherwise provides, prevent any authority within a State from levying any tax on any property of the Union to which such property was immediately before the commencement of this Constitution liable or treated as liable, so long as that tax continues to be levied in that State. " the property of the Union is exempt from all taxes imposed by a State or by any authority within a State. But the Parliament may by law provide otherwise and then any tax on the property of the Union can be imposed and levied in accordance with the said law. But then an exception has been carved out in clause (2). The exception is not meant for levying any tax on such property by any State; but it is merely for the benefit of any authority including the local authority like the Municipal Council in question. Clause (1) cannot prevent such authority from levying any tax on any property of the Union if such property was exigible to such tax immediately before the commencement of the Constitution. The local authority, however, can reap advantage of this exception only under two conditions namely (1) that it is that tax which is being continued to be levied and no other; (2) that the local authority in that State is claiming to continue the levy of the tax. In other words, the nature, type and the property on which the tax was being levied prior to the commencement of the Constitution must be the same as also the local authority must be the local authority of the same State to which it belonged before the commencement of the Constitution. On fulfilment of these two conditions it is authorised to levy the tax on the Union property under clause (2). As in the case of clause (1) it lies within the power of the Parliament to make a law withdrawing the exemption of the imposition of the tax on the property of the Union, so in the case of clause (2) it is open to the Parliament to enact a law and finish the right of the local authority within a State to claim any tax on any property of the Union, a right it derived under clause (2). That is to say, in both the cases the ultimate power lies with the Parliament. "

(7.) IN Union of India v. State of Punjab, (1990) 7 Legal Reports and Statutes 692 (Pb) the State of Punjab made an effort to impose tax on vehicles belonging to the Railways. It was held that this could not be done. Justice J. S. Sehehon came to the conclusion : "there is absolutely no doubt that the property of the Union would continue to be taxable under the existing State Laws at the time of the commencement of the Constitution if actually such taxes were imposed in the pre-Constitution period. In the case in hand, there is no dispute that tax was not being levied on the motor vehicles of the Railways in the pre-Constitution period or the post-Constitution period and it was for the first time that the. State Authorities had thought of taxing the motor vehicles of the Railway Department at Amritsar. So the provisions of Article 285 (1) of the Constitution clearly bar the imposition of this tax. "

(8.) THE same is the position in this case. The respondents cannot impose any levy, the burden of which would fall on the property of the Union of India.

(9.) APART from this, the lifting of earth from one place and dumping the same at higher place would not fall within the ambit of mining operation and in any case no levy can be imposed in view of Rule 3 (iii) of the Madhya Pradesh Minor Minerals Rules, 1961 (hereinafter referred to rules for short). The contention that Rule 3 (v) also comes to the rescue of the Union of India is also not without merit. These rules read as under :

"3. Exemptions.- Nothing in these rules shall apply to ******** ******** (iii) the removal of minor minerals from mines, whether situated in private or Government land, when such mines have not been appropriated to the use of a department of the State Government and the minor minerals are not quarried for sale but are required for the construction or repairs of wells, or other agricultural works or for the construction or improvement of the dwelling house of agriculturists (Village artisans and labourers residing in revenue or forest villages); ******** ******** (v) the minor minerals removed by Government departments for public works and by village panchayats for their own works from Government land; and ******** ********

(10.) APART from this the State Government having made no reservation in the matter of minerals when notifications were issued under Section 4 and 6 of Land Acquisition Act, 1894 cannot claim any Royalty. The land came to vest in the petitioner free from all encumbrances and is absolute owner of the minerals. The view expressed by this Court in Khusiram v. State of M. P. , (1981) 2 MPWN 247 also supports the petitioner. Levy is sought to be made under Section 247 of the M. P. Land Revenue Code, 1959. The respondents have not taken note of Section 264 of the Code. Because of the provisions contained in Section 264 the State is not competent to levy or charge any Royalty from the petitioner. Thus looking from any point of view the orders passed by the respondents authorities are without jurisdiction. The orders dated 24th March, 1982 (Annexure P-VIII), 10th January, 1983 (Annexure P-IX) and 10th January, 1984 (Annexure P-X) are quashed.

(11.) BEFORE parting with this judgment it would be apt to observe that this dispute or other inter-Government disputes should have been resolved by the contending parties at their own level. This would reduce the burden on judicial system to some extent.