THE HON’BLE SRI JUSTICE V.V.S. RAO WRIT PETITION No.10293 of 1991 08.08.2006 Between: M/s. Panyam Cements & Mineral Industries Limited, represented by its Managing Director and another. ..Petitioner And State of Andhra Pradesh, represented by its Director of Mines and Geology, Hyderabad. and others. ..Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO WRIT PETITION No.10293 of 1991 ORDER: M/s. Panyam Cements & Mineral Industries Limited (hereinafter called, ‘the Company’), and its Managing Director are the petitioners. They filed the present writ petition assailing the proceedings issued by the second respondent, dated 28.06.1991, 30.04.1991, 21.03.1991 and 08.10.1990, and also for consequential directions to the respondents to issue necessary B- Form transit permits with reference to mining lease granted to the C o mp a n y, vide G.O.Ms.No.622, Industries & Commerce Department, dated 21.11.1980. The Company is engaged in the manufacture of ordinary portal and cement for the purpose of which it has obtained a mining lease in respect of land admeasuring Acs.879.36 cents in survey Nos.572/5, 592/2 and 631 situated at Konidedu Village, Kurnool District. It executed a mining lease on 20.05.1981 and is obliged to pay royalty and also land cess under Section 74 of the Andhra Pradesh (Andhra Area) District Boards Act, 1920 (for short, ‘the District Boards Act’). Besides this, Mineral Rights Tax (MRT) was also levied under the Andhra Pradesh (Mineral Rights) Tax Act, 1975 (for short, ‘the MRT Act’). The Company filed W.P.No.4877 of 1990 questioning the legality of the levy and the collection of land cess and MRT. Following the judgment of the Supreme Court in India Cement Limited V. State of Tamil Nadu[1], the writ petition was allowed on 22.07.1990 declaring that the State Government shall not levy and collect any cess under the District Boards Act and that it cannot collect tax under the MRT Act on the ground that such power is ultra vires. Be that as it is, the Company sought a reference under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, ‘SICA’) and was declared as a sick Company within the meaning of SICA. The matter was pending before the Board for Industrial and Financial Reconstruction (BIFR). The Company paid a sum of Rs.13,64,500/- during the period from 20.04.1990 to 26.06.1991 towards royalty, land cess and MRT as well as surface rent. As and when the Company requested for grant of B-Form permits for transporting mineral, but instead of granting B-Form permits, the second respondent appropriated the amounts towards old dues on the ground that for the period up to 31.03.1990, certain amounts were due from the Company towards mineral revenue. The amounts paid by the Company for B-Form permits on different occasions were accordingly adjusted by impugned orders totalling to a sum of Rs.3,88,500/-. In the impugned orders, it was mentioned that an amount of Rs.47,08,416.99 paise is due from the Company towards mineral revenue for the period up to 31.03.1990, and therefore, the amount paid subsequently by the Company is being adjusted. These proceedings, as noticed supra, are assailed in this writ petition. It is contended by the petitioners that when the reference before the BIFR is pending, the action of the respondents in refusing transit permits amounts to “distress” action, and therefore, contrary to Section 20 of SICA. It is also contended that the amount paid by the Company is adjusted towards arrears of land cess and MRT, which is declared as ultra vires by this Court, and therefore, the same is in violation of Article 265 of the Constitution of India. Learned Government Pleader for Industries submits that as this Court has declared the levy of land cess under the District Boards Act and MRT under the MRT Act as ultra vires by judgment, dated 22.07.1990, the first petitioner is still liable to pay the arrears of levy under these two heads for the period up to 31.03.1990. According to the learned Government Pleader, the Company is liable to pay a sum of Rs.47,08,416.99 paise, till that date, and therefore, the payments made by it were adjusted in accordance with the conditions of mining lease in Form-K read with Rule 27(2) (a) of the Mineral Concession Rules, 1960. Even according to the petitioners, this Court did not pass any specific orders regarding the arrears of levy payable by the first petitioner-Company till the levy towards land cess and MRT was declared as ultra vires. Therefore, this Court finds no illegality on the part of the respondents in collecting the arrears of mineral revenue up to 31.03.1990. The first petitioner appears to have sought only for declaration in W.P.No.4877 of 1990, which means that such declaration by reason of the judgment rendered on 22.07.1990, cannot be deemed to have declared the earlier levy, as illegal. The Writ Petition is devoid of merits and is accordingly dismissed. There shall be no order as to costs. ____________ (V.V.S.RAO, J) 08.08.2006 GJ [1] AIR 1990 SC 85