ORDER
K. Sreedharan, J.
1. Petitioner is a firm engaged in the business of manufacturing and selling tiles and bricks. The earth required as raw material for the manufacture of files and bricks is being purchased by it from various suppliers. Petitioner does not directly engage itself in the work of digging out or excavating earth for its manufacturing process. The second respondent issued Ext. P1 calling upon the petitioner to remit a sum of Rs. 1,971.25 as royalty for the clay used in its manufacturing process. Since the petitioner did not pay the amount demanded, proceedings under the Revenue Recovery Act were initiated. The 4th respondent issued Ext. P2 notice under Section 34 of the Revenue Recovery Act demanding the above amount. Petitioner challenged Exts. P1 and P2 before this Court in O.P. No. 3404 of 1978. That petition was disposed of by this Court by Ext. P3 judgment directing the petitioner to file a revision before the Government. In pursuance to that direction petitioner filed Ext. P4 revision, under R. 49 of the Kerala Minor Mineral Concession Rules, Government by Ext. P5 order rejected the revision petition. Hence this original petition.
2. The petitioner prays for the issue of a writ of certiorari to quash Exts. P1, P2 and P5. He also prays for a declaration that Rules 17, 48A and 48L of the Kerala Minor Mineral Concession Rules 1967 (hereinafter referred to as the Rules) are invalid, inoperative and ultra vires the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as the Act).
3. The power of the Government to make rules in respect of minor minerals is dealt with by Section 15 of the Act. Clause (1) of that Section provides that the State Government may, by notification in the official Gazette, make rules for regulating, the grant of quarry leases, mining lease or other mineral concessions in respect of minor minerals and for purposes connected therewith. This provision, according to the learned counsel, empowers the Government to frame rules regulating the grant of quarry leases, mining leases and other mineral concessions. Those rules can also cover matters connected with the above purposes namely quarry leases, mining leases or other mineral concessions. In other words, the rules cannot regulate the activities of the person who purchases the minor minerals from one who has obtained the quarry lease, mining lease or other concessions. Clause (3) of Section 15 of the Act provides that the holder of a mining lease or any other mineral concession granted under any rule shall pay royalty in respect of minor minerals removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee at the rate prescribed in the rules. This provision, according to the learned counsel authorises the Government to frame rules providing for
levy of royalty in respect of mineral removed or consumed by the holder of a mining lease his agent, manager, employee contractor or sub-lessee. In other words, the argument is that royalty can be levied only from the holder of a mining lease, his agent, manager, employee, the contractor or sub-lessee and not from any other person like the purchaser from the above mentioned persons.
4. The petitioner has averred in paragraph 1 of the original petition that earth required as raw material for the manufacture of tiles and bricks is purchased by the firm from various suppliers of the same and that the petitioner does not directly engage itself in the work of digging out or excavating earth for tile manufacture. The petitioner is not the holder of a mining lease. It is not mining any minor mineral by itself or through agents. It purchases the mineral from person who dig it or excavates ft. This means the petitioner is only a purchaser from the holders of mining leases. This activity of the petitioner is admitted in para. 4 of the counter affidavit filed on behalf of the first respondent. The averments made therein are : —
“The petitioner is a Firm engaged in the business of manufacturing and selling tiles and bricks. The statement of the petitioner that the earth required for the manufacture of tiles and bricks is purchased by him from various suppliers of the same and the petitioner does not directly engage in the work of digging out or excavating earth for the manufacture of tiles, is substantially correct.”
Thus it is conceded that the petitioner is not a holder of mining lease or any other mineral concession granted under any Rule framed by the Government as provided by Section 15 of the Act.
5. Rule 17 of the Rules provides that the holder of mining lease granted under the rules shall pay royalty in respect of any mineral removed by him from the land in respect of which the lease has been granted at the rate specified in Schedule I. Since the petitioner is not the holder of a mining lease the imposition of royalty on the holder of a mining lease is not open to challenge. Therefore the petitioner’s prayer to have Rule 17 of the Rules; declared ultra vires has only to be rejected and I do so.
6. The petitioner attacks Rule 48A of the Rules. As per that Rule no person; other than a quarrying permit or a quarrying lease holder, shall stock, sell or offer for sale any minor mineral except under a dealer’s licence issued by the competent authority. The petitioner manufacturer of tiles and bricks has no case that he is stocking the minor mineral for sale. Therefore he is not to take any licence as contemplated by Rule 48A. In such a situation the petitioner cannot challenge the vires of Rule 48 A. The attack levelled against that Rule is unsustainable and it is rejected.
7. The next attack is against Rule 48 L. For a proper understanding of that provision, I read the same.
“Checking of unauthorised dealing in minor mineral — Any person who, possesses any minor mineral for, consumption or for sale or consumed or sold any minor mineral shall if so required produce sufficient proof to the competent authority or to any other person authorised in this behalf by the competent authority of the Government, to the effect that the minor mineral had been purchased from any duly authorised producer or dealer as the case may be. If he fails to, produce sufficient proof to that effect the competent authority or such authorised person may recover the minor mineral or where such mineral has already been disposed of or consumed, the price thereof and also recover from the person the royalty or tax and fine, if any imposed.”
Petitioner purchases minor mineral for consumption. In the manufacturing process the petitioner uses the minor mineral purchased from others. As per this Rule, if the competent authority calls on the petitioner to furnish details of the person who sold the minerals the petitioner is bound to give the details. That provision cannot be objected to by petitioner. The Government have got power to frame rules regulating the grant of quarry leases etc. and for purposes connected therewith as is” evident from Section 15(1) of the Act. The purchaser when called upon to maintain register giving the details of the persons who sell the minor minerals to him, that, rule will squarely fall within the scope of Section 15(1) because it will be a measure regulating the quarrying or mining of minor minerals. So the earlier part of Rule 48L is not objectionable and is intra vires the Act.
8. As per the latter part of Rule 48L, on the failure of the person to furnish details of the authorised producer or dealer of the minor minerals he is made liable to a penalty. The penalty is that the authority declared to be competent in this regard may recover the minor mineral, if it has been consumed its price and also royalty or tax and fine. Now the question is whether the Government can frame rules authorising the levy of the value of the minerals if consumed or recover the minerals and also royalty or tax and fine on account of the failure to give details regarding the person who sold the same to him? It appears that the Government has no such power. As per Section 15(3) the Government can make rules authorising levy of royalty from the holder of a mining lease. The rule making power conferred by the Act does not authorise he Government to frame Rules enabling it to confiscate the minor minerals in default of payment of royalty by the holder of a mining case or any other person mentioned in Clause 3 of Section 15 of the Act. The person who has purchased the minor minerals from the holder of a mining lease if fails to give the details of the lessee who sold the minerals to him the Government can at best recover the royalty from such person. Nothing more than that. He cannot be made to pay the value of the minerals. The latter portion of Rule 48L which provides for recovery of the minor mineral or its value if already disposed of or consumed and fine is beyond the rule making power of the Government. So the latter portion of Rule 48L which provides for recovery of the value of the minerals from the purchaser must be held to be ultra vires Section 15 of the Act. So, I strike down that part of Rule 48L which enables the Government to recover the minor mineral or where such mineral has already been disposed of or consumed the price thereof. This means that the Government can recover from the person who fails to give details of the person from whom he purchased the minor minerals only royalty tax and, fine that have been fixed under the Rules.
9. The petitioner was not called upon to
furnish the details of the persons who sold
the minerals to it. The Government have no
case that the petitioner failed to give details
of the persons who sold minerals to him.
Without calling for such details, by Ext. P1
order the petitioner was directed to remit a
sum of Rs. 1,971.25 by way of royalty. As
stated earlier, the petitioner is not a holder
of a mining lease. Nor is it the agent, manager,
employee, contractor or sub-lessee of the
holder of a mining lease either. Under such a
situation the imposition of royalty on the
petitioner is clearly erroneous. It therefore
follows that Ext. P1 order is without
jurisdiction and has to be set aside. I do so.
When Ext. P1 has been struck down, Exts. P2
and P5 which are consequential have no
independent existence. Accordingly they are
also quashed.
The original petition is allowed in the above terms. No costs.