Court dismisses Simplex Infrastructure's plea challenging the Assam Government's royalty demand on minor minerals utilized in a national highway project.
In a significant judgment, the Gauhati High Court has dismissed a writ petition filed by Simplex Infrastructures Ltd. challenging the Assam government's demand for royalty on minor minerals, including earth, utilized in the construction of a national highway project. The case, presided over by Justice Kardak Ete, revolved around the contentious issue of whether the earth excavated and reused within the project site attracted royalty under the Mines and Minerals (Development and Regulation) Act, 1957 and the Assam Minor Mineral Concession Rules, 2013.
The petition was filed after the Divisional Forest Officer, Nagaon Division, issued a demand notice on March 9, 2023, requiring Simplex to pay Rs. 1,45,84,055 towards forest royalty, GST, and other penalties. Simplex contended that the excavated earth was reused within the project site and thus should not attract royalty. However, the Forest Department maintained that the company failed to provide adequate documentation to substantiate its claims, prompting the imposition of the royalty.
The court meticulously examined the statutory framework under the Mines and Minerals (Development and Regulation) Act, 1957, and the Assam Minor Mineral Concession Rules, 2013. It noted that the contractor executing government infrastructure projects is obligated to pay royalty unless it can substantiate the internal utilization of excavated materials through proper documentation.
Justice Kardak Ete observed that the levy of royalty in this case is justified as Simplex could not adequately substantiate its claim of exemption through contemporaneous engineering records. The court reiterated that the statutory scheme empowers authorities to enforce royalty compliance and ensure recovery of dues through structured processes of verification and assessment.
The judgment also touched upon the limitations of writ jurisdiction under Article 226 of the Constitution of India, emphasizing that the court's role is not to reappreciate technical data or substitute factual conclusions made by competent authorities.
The court dismissed the writ petition, stating that the impugned communications by the Forest Department did not suffer from any illegality or arbitrariness. However, it left the door open for Simplex to pursue other legal remedies to adjudicate disputed factual issues related to the quantification of liability.
Bottom line:-
A contractor executing an EPC project cannot avoid royalty liability for minor minerals unless utilization within the project site is substantiated by proper documentation and contemporaneous records.
Statutory provision(s): Mines And Minerals (Development And Regulation) Act, 1957 Sections 14, 15; Assam Minor Mineral Concession Rules, 2013 Rules 5, 63, 64; Constitution of India, 1950 Article 226
Simplex Infrastructures Ltd. v. State of Assam, (Gauhati) : Law Finder Doc id # 2934009
