B.P. Das, J.
1. The petitioner is a company registered under the Companies Act, 1956 and is engaged in the business of purchase of manganese ore from G.P. No. 5- M/s. Bhanja Minerals Pvt. Ltd., which has been granted two Mining Leases under the Mines and Minerals (Regulation & Development) Act, 1957 (MMRD Act, in short) for iron and manganese ore in village Inganijharan and iron ore in village Deojhar, both in the district of Keonjhar, and is engaged in the business of mining of iron and manganese ore.
The petitioner-company through its Partner-Biplab Roy has filed this writ petition questioning the legality and validity of the Notification dated 15.1.2004 issued by the Government of Orissa in the Department of Steel and Mines, vide Annexure-2, declaring the Policy Decisions on grant of mining lease and transfer of land for commercial projects in Scheduled Areas, 2003, more particularly Clause 8 (e) thereof and praying for issuance of a writ of certiorari quashing the said Notification in Annexure-2 and declaring the same as illegal and unconstitutional and further declaring that the petitioner is not legally obliged to pay such contribution at the rate of 5% of the net annual profit so also at the flat rates as mentioned in paragraph No. 4-U of the writ petition.
2. Under Clause 8(e) of the notification it is decided that 5% of the net annual profit accrued to the project should be spent for the development of health, education, communication, irrigation and agriculture of the said scheduled area within a radius of 50 Kms. and the amount should be spent through Societies/Trusts constituted at the District/Divisional level besides by respective Collectors/R.D.Cs. The aforesaid Policy Decision of the State Govt. was taken in order to protect the interest of the tribal land losers and to give effect to the judgment of the apex Court rendered in Civil Appeal Nos. 4601-2002 of 1996, in Samatha v. State of Andhra Pradesh and Ors. on 11.7.1997 reported in AIR 1997 SC 3297.
3. According to the petitioner, O.P. No. 5-Bhanja Minerals by communication dated 10.7.2005, vide Annexure-3, informed the petitioner-company that the rates agreed upon are liable for upward revision in view of the fact that the State Govt. has levied an extra cost of 5% as Periphery Development Fund on the annual net profit and accordingly added 5% to the rates agreed upon with the petitioner-company.
It has been further averred that in terms of the notification in Annexure-2 a meeting was convened by the R.D.C. (N.D.) at the Collectorate on 12.3.2005 in which it was informed that a Periphery Development Society has been formed under the chairmanship of the Collector, Keonjhar, in accordance with the decision taken in the notification in Annexure-2 for supervising and monitoring the Periphery Development. In the said meeting several decisions were taken. The minutes of the aforesaid meeting of the Periphery Development Committee is annexed as Annexure-4. Under agenda No. 4 of the said meeting the ways and means for computation and collection of periphery development from the mining industries was decided and under agenda No. 1, i.e., Review of implementation of previous decisions, it has been indicated that a sum of Rs. 14,37,40,000.00 has been collected upto that date, Rs. 4,37,377.00 as interest and Rs. 3,35,000.00 as sale of tender papers, thereby totalling to Rs. 14,44,91,377.00.
4. Thereafter O.P. No. 4-the Member Convenor-cum-Deputy Director, Mines, Joda, Periphery Development Committee, by letter dated 9.5.2005 indicating the rates of different types of product per tonne raised a demand against Bhanja Minerals, which is the principal of the petitioner-company, for an amount of Rs. 33,25,580/-, vide Annexure-5, and requested to deposit the demanded amount in shape of D.D. in favour of the Periphery Development Society, Keonjhar, by 30.6.2005. The relevant part of said letter in Annexure-5 is extracted hereunder:
As per the decision taken in the Periphery Development Committee meeting held under the Chairmanship of R.D.C. on 12.03.2005 and rationalization made in the special PDC meeting held in the Residential Office of R.D.C. (ND) at Sambalpur on 18.04.2005 regarding fixation of rate per tonne of ore dispatched which was agreed to by the Mine Owners and Industrial House present, the following derivations have been made.
------------------------------------------------------------------Sl. No. Type of product Rate per tonne(In Rs.)------------------------------------------------------------------1. Iron ore Fines 7.00------------------------------------------------------------------2. Iron ore lumps 16.00------------------------------------------------------------------3. Sized Iron Ore 30.00------------------------------------------------------------------4. Mn. Di-oxide 180.00------------------------------------------------------------------High grade 140.00------------------------------------------------------------------Med. Grade 80.00------------------------------------------------------------------Low grade 20.00------------------------------------------------------------------5. Chrome Ore All grades 69.00------------------------------------------------------------------6. Pyrophylite 1.00------------------------------------------------------------------7. Ferro Manganese 400.00------------------------------------------------------------------8. Ferro Chrome 200.00------------------------------------------------------------------9. Sponge Iron 30 X 300 X Capacity TPD------------------------------------------------------------------10. Crushers 4 X Capacity TPA------------------------------------------------------------------Basing upon the rate fixed, the type of product made in your mine plant, quantity of ore dispatched from mines/Ferro Chrome Plant/Ferro Manganese Plant, Capacity of Sponge iron plant and iron ore crusher units as stood during the financial year 2004-05, your share for contribution towards Periphery Development has been worked out below..
5. Bhanja Minerals passed on the demand to the petitioner- company. The petitioner refused to pay the demanded amount on the ground that the same would amount to deviation from their annual contract. When such refusal was communicated to Bhanja Minerals, dispute arose between Bhanja Minerals and the petitioner and because of such dispute Bhanja Minerals did not pay the demanded amount to the Society. Though Bhanja Minerals was regularly paying all other taxes and statutory dues and no dues were outstanding against it, yet O.P. No. 4-the Deputy Director, Mines, Joda, refused to grant Ore Removal Permission to Bhanja Minerals which directly affected the business of the present petitioner, as it could not meet its back to back commitment with other buyers and business associates. O.P. No. 4 stopped grant of ore removal permission from 9.6.2005, but on deposit of 1/4th of the demand, i.e., Rs. 8,31,295/-, such permission was granted from 7.7.2005, that too for a short period. Thereafter pressure mounted for payment of the balance amount, but Bhanja Minerals did not pay the same for which grant of ore removal permission was again stopped. According to the petitioner, when the notification spelt out levy in terms of 5% of the annual net profit, the same has been calculated in a most arbitrary manner for manganese ore, i.e., @ Rs. 180/- for Dioxide, Rs. 140/- for high grade, Rs. 80/- for medium grade and Rs. 20/- for low grade, as indicated in the minutes of the proceedings of the Special Meeting for Periphery Development held on 18.4.2005, vide Annexure-7.
6. The petitioner finding no other alternative has come up with this writ petition assailing the decision of the State Govt. in Annexure-2 on the ground that (i) the entire field including taxes and fees relating to regulation and development of mines and minerals has been occupied and regulated by the MMRD Act with reference to Entry 54 of List-I and there is no scope left for any State to legislate with reference to mineral-bearing lands or to impose any tax or fees under Entry 23, 66, 49 or 50 of the List-II; (ii) the imposition and collection of Periphery Development Fund does not have any statutory back-up and, therefore, the same amounts to collection of tax without any legislation; (iii) the aforesaid amount has been collected by the agency of the State by using hand-twisting tactic like stoppage of supply of minerals; (iv) such imposition is violative of Article 14 of the Constitution. On the aforesaid grounds the petitioner has filed this writ petition alleging that the levy and collection of 5% on the net annual profit by virtue of the notification in Annexure-2 is illegal and has no legislative back-up.
7. The State Govt. through the Principal Secretary to Govt. in the Department of Steel and Mines, O.P. No. 1, has filed a counter affidavit. Pursuant to this Court's order, the Chief Secretary to the Govt. and the Collector, Keonjhar, (O.P. No. 3) have filed separate counter affidavits.
The Chief Secretary in his counter affidavit has stated that as evident from the nature of the fund, it is entirely a voluntary contribution with prior consent and it is not a requirement of the fund that it may be parsed on to the purchaser. The aforesaid decision of the State Govt. to spend the same for development of health, education, communication, irrigation and agriculture of the said schedule area within a radius of 50 Kms. through Societies/ Trust constituted at the District/Divisional Level by respective Collectors/R.D.Cs. was taken on the basis of the judgment rendered by the apex Court in Samatha case (supra). The Chief Secretary has further stated in the counter affidavit that O.P. No. 5 - Bhanja Minerals is operating two mining leases in Keonjhar district and is to voluntarily contribute the amount out of its annual profit accrued during the year 2004-05 and nowhere O.P. Nos. 1, 2, 3 and 4 have directed O.P. No. 5 to realize the amount from its purchaser, i.e., the petitioner. Moreover, it is neither a tax nor fee but a voluntary contribution from the annual profit made by the mine owner during the year 2004-05 for spending towards peripheral development work in Keonjhar district. It is submitted that for the management of the said fund a society called Periphery Development Society, Keonjhar, has been formed and a Periphery Development Committee for Sponge Iron, Steel Industry, Mine Owners operating in Keonjhar district, was also constituted in terms of the resolution dated 4.8.2003 issued by the State Govt. in the Revenue Department, vide Annexure-A/12. Moreover, the Govt. in Department of Steel and Mines vide notification dated 23.11.2004 formed a committee to the monitor and supervise improvement of road projects in the district.
8. According to the Chief Secretary, it is a fact that O.P. No. 4 issued a notice to Bhanja Minerals to contribute Rs. 33,25,580/- towards Peripheral Development Fund based on the dispatch of iron and manganese ore from their Inganijharan Iron Manganese Mining leases as per the rates unanimously accepted in the special meeting of Periphery Development Committee convened on 18.4.2005 and it was only to make Bhanja Minerals aware of the amount and request was made under Annexure-8 to contribute out of its profit made during the year 2004-05 on account of Iron and Manganese Ore dispatched during that period. Nowhere Bhanja Minerals has been asked to recover the said due from the petitioner. But in regard to refusal to grant ore removal permission from time to time, it is stated that the same is an inter se dispute between the petitioner and O.P. No. 5. According to him, it can never be said that the calculation of contribution has been made in a most arbitrary manner for manganese ore. It is further indicated that fixation of measure even in matters of tax and fees are not justifiable unless they are confiscatory and since it is voluntary, the said issue does not arise. The mine owners and industries are not such a class of the society that they can be forced with such a measure.
9. The sum and substance of the averments made in the counter affidavit is that the Periphery Development Fund has been created and the mine owners and other industrial houses have accepted the measure of taxation voluntarily. There is no question of pressurizing anybody to pay the same. Out of the said fund several development works have been executed in the scheduled areas.
The Collector, Keonjhar, O.P. No. 3, in his counter affidavit has taken similar stand and has stated that the society is also taking steps for augmentation of drinking water facility in Barbil-Joda area for which projects have been prepared. The Society has also prepared a project to renovate the District Headquarters Hospital for which work has commenced and such improvements are also going to be taken up in the Sub-divisional Headquarters Hospitals of Champua and Anandapur.
The Principal Secretary to Govt. in the Department of Steel and Mines, Orissa, O.P. No. 1, in his counter affidavit has reiterated the stand taken by the Chief Secretary.
From the counter affidavits filed by the opposite parties so also the Chief Secretary, the main legal justification for collection of Periphery Development Fund by the State Govt. is that such power has been derived from the judgment of the Supreme Court in Samatha.
10. Learned Counsel for the petitioner submitted that the basis of the judgment in Samatha's case was the absolute prohibition for transfer of lands in Scheduled Areas as per Section 3 of Andhra Pradesh Scheduled Areas Land Transfer Regulations, 1959, as amended by Regulation 2 of 1970, and also the amendment of Section 11(5) of the MMRD Act by the Govt. of Andhra Pradesh. These two amendments when read together envisaged a total prohibition of transfer of Govt. lands in Scheduled Areas to any non-tribal. The aforesaid local amendments imposed a total embargo on transfer of Govt. land in favour of non-tribals. 'State' has also been included in the definition of 'Person' so as to make even transfer of lands by the State to be illegal, null and void and contrary to the local legislation. Therefore, all the leases in Andhra Pradesh were declared null and void.
But, according to the petitioner, the relevant piece of legislation in Orissa is the Orissa Scheduled Areas (Transfer of Immovable properties by the Scheduled Tribes) Regulation, 1956 which the State Govt. in its notification also admits comprehensive enough to deal with the lot of the tribal population. The relevant Section of the Orissa Act dealing with the transfer of immovable properties is Section 3 which itself does not contain any absolute bar for transfer of immovable properties by the Govt. Hence the sanctity of mining leases granted in the State of Orissa cannot be challenged by an interpretation of Section 3 of the Orissa Regulations and the State of Orissa has also not taken such a stand.
11. Therefore, the Samatha case does not have any application in the State of Orissa. It was further submitted that the ratio of Samatha case was later on clarified in BALCO Employees' Union of India v. Union of India and Ors. : (2002)ILLJ550SC , which limited the scope and applicability of Samatha only to the facts of that case and also to the State of A.P. in BALCO case, the apex Court Categorically held that the Samatha case would not have applicability to the State of M.P. since in M.P., there is no absolute prohibition like in A.P. for transfer of land by Govt. to non-tribals in Scheduled Areas. Therefore, when Samatha case does not apply, any collection of fund pressing reference on Samatha case would not have any justification.
It was further stated that the stand taken by the State that the collection is voluntary is not true because the Units were being constantly pressurised to make such payments and in this regard attention of the Court was drawn to the minutes of the special meeting held on 18.4.2005 for periphery development under the Chairmanship of the R.D.C. (ND), vide Annexure-7, wherein it was decided, inter alia, that since the contributions are being made against the business already carried out during 2004-05, the DDM, Joda will make mines-wise and industry-wise calculation based on the dispatch figures and capacity and the entire contribution has to be deposited in one go or in 2-3 instalments by 30.6.2005 and any deviation in this regard will not be tolerated. The petitioner, therefore, submitted that the aforesaid would go to show that the collection is not voluntary and there is element of coercion and the purported levy takes on the character of a tax, i.e., enforced by way of notification, amounts specified at particular rates, etc. and hence is against the mandate of Article 265 of the Constitution of India and the aforesaid collection has no legal sanction, inasmuch as there is no legislation on the subject.
12. The petitioner in its affidavit filed on 3.3.2005 has stated that the amount so collected under the fund has not been spent for the benefit of the tribal population so as to come within the self-professed goals of Periphery Development but out of the said fund expenditure has been made over construction of compound wall at Police Reserve Line, construction of Citizen Interface Kiosk and for strengthening the On-line Mutation Cell including construction of Waiting Hall, Platform and for fixation of Ashok Stambha at Keonjhar Stadium, Remodelling of Grievance Cell, Citizen Information Centre waiting hall and cycle stand for visitors at Keonjhar Collectorate, extension and repair of Pendal at Kalipadia in Keonjhargarh, special repair of Keonjhar Town Hall-cum-Auditorium and supply of audio equipment for Durbar Hall, Keonjhar, etc.
O.P. No. 5-Bhanja Minerals in its affidavit has stated that it is the lessee of the mine concerned and it has been pressurized through several methods by withholding the permission for raising of the manganese ore, stopping the permission after 18.8.2005. The same was done in order to pressurize O.P. No. 5 to pay the P.D. tax. It has been further indicated that the amount so collected has not been spent on the periphery development.
13. A rejoinder has been filed by O.Ps. 3 and 4 through the Deputy Director, Mines, Joda, in which it is stated that as to the constructions as indicated in the foregoing paragraph, it is admitted that some constructions were taken but the activities undertaken for construction of compound wall at Police Reserve Line, construction of Citizen Interface Kiosk, etc. are not legitimate expenses linked to tribal development.
On the background of aforesaid facts, the moot question that falls for consideration in this writ petition is : whether the amount collected under the Periphery Development Fund in terms of the Policy Decision of the State Govt. in Annexure-2 is in the nature of cess or is a contribution made voluntarily to a society registered under the Societies Registration Act for the benefit of the tribal of the Scheduled Areas and the same has been created in the light of the principles enunciated in the case of Samatha, as argued by the learned Advocate General.
14. Let us first see the principles decided by the apex Court in Samatha on the basis of which the State Govt. proceeded to take the Policy Decision in Annexure-2. The apex Court in paragraphs 113 and 114 of the judgment held-
113. In the absence of any total prohibition, undoubtedly Article 298 empowers the Governor being the head of the Executive to sanction transfer of its lands. Since the Executive is enjoined to protect social, economic and educational interest of the tribals and when the State leases out the lands in the Scheduled Areas to the non-tribals for exploitation of mineral resources, it transmits the correlative above constitutional duties and obligation to those who undertake to exploit the natural resources should also to improve social, economic and educational empowerment of the tribals. As a part of the administration of the project, the licensee or lessee should incur the expenditure for:
(a) re-forestation and maintenance of ecology in the Scheduled Areas;
(b) maintenance of roads and communication facilities in the Scheduled Areas where operation of the industry has the impact;
(c) supply of potable water to the tribals;
(d) establishment of schools for imparting free education at primary and secondary level and providing vocational training to the tribals to enable them to be qualified, competent and confident in pursuit of employment;
(e) providing employment to the tribals, according to their qualifications in their establishment/factory;
(f) establishment of hospitals and camps for providing free medical-aid and treatment to the tribals in the Scheduled Areas;
(g) maintenance of sanitation;
(h) construction of houses for tribals in the Scheduled Areas as enclosures; The expenditure for the above projects should be part of his/its Annual Budget of the industry establishment or business avocation/venture.
114. In this behalf, at least 20 per cent of the net profits should be set apart as a permanent fund as a part of industrial/business activity for establishment and maintenance of water resources, schools, hospitals, sanitation and transport facilities by laying roads etc. This 20% allocation would not include the expenditure for re-forestation and maintenance of ecology. It is needless to mention that necessary sanction for exemption of said amount from income-tax liability, may be obtained; and the Centre should ensure grant of such exemption and see that these activities are undertaken, carried on and maintained systematically and continuously. The above obligations and duties, should be undertaken and discharged by each and every person/industry/licensee/lessee concerned so that the constitutional objectives of social, economic and human resource empowerment of the tribals could be achieved and peace and good government is achieved in Scheduled Areas. We have not examined the other Acts in detail but as and when such need arises, they may be examined in the light of the language used therein and the law.xxx xxx xxx
15. In the aforesaid case Hon'ble G.B. Patnaik, J. (as his Lordship then was) recorded minority view and in paragraph 231 said:
231. ...Since the mining activities are being carried out mostly within the scheduled areas it is the duty of the State to see that a part of the profits earned by the lessees should be spent for ameliorating the living conditions of the tribals by the lessees themselves. It is in this context Brother Ramaswamy, J. has made some observations at pages 141 and 142 of the judgment which have my general concurrence but the said objective has to be achieved by appropriate legislation making it compulsory for the lessees within the tribal area to spend a portion of the income arising out of the mining business for the general upliftment of the living conditions of the tribal people. This should be in addition to the royalty and other cess under different legislations. The State may also consider the question of incorporating some provisions in the leases itself for achieving the aforesaid objectives.
16. So, the apex Court in the above quoted paragraphs 113 and 114 observed that the expenditure for the above project should be part of the Annual Budget of the industry, establishment or business avocation/venture. So, there is nothing in the aforesaid decision that amount would be collected by the State. It is totally voluntary in nature.
In this regard, at the cost of repetition, we may mention here that in Samatha, it is indicated in paragraph 231 that the objective can be achieved by appropriate legislation making it compulsory for the lessee to spend some portion of the income for the general upliftment of the living condition of the tribal people.
17. In the case of hand, firstly, there is admittedly no legislation, and secondly, the question that arises is whether there is any coercion or compulsion for collection of the fund or it is totally voluntary. Before going to address the aforesaid questions, it would be profitable to state here that the apex Court in its later decision in BALCO explained the ratio of Samatha and limited its scope and applicability only to the facts of that case and only to the State of Andhra Pradesh. The apex Court in paragraph 70 of the judgment further held:
70. While we have strong reservations with regard to the correctness of the majority decision in Samatha's case, which has not only interpreted the provisions of aforesaid Section 3(1) of the A.P. Scheduled Areas Land Transfer Regulation, 1959 but has also interpreted the provisions of the Fifth Schedule of the Constitution, the said decision is not applicable in the present case, because the law applicable in Madhya Pradesh is not similar or identical to the aforesaid Regulation of Andhra Pradesh. Article 145(3) of the Constitution provides that any substantial question of law as to the interpretation of the provisions of the Constitution can only be decided by a Bench of five judges. In Samatha's case, it is a Bench of three Hon'ble judges who by majority of 2:1 interpreted the Fifth Schedule of the Constitution. However, what is important to note here is, as already observed herein above that the provisions of the Madhya Pradesh Land Revenue Code, 1959 and Section 165, in particular, are not in pari materia with the aforesaid Section 3 of the Andhra Pradesh Regulation.
18. Learned Advocate General further relied upon the judgment of the apex Court in T.N. Godavarman Thirumulpad v. Union of India : AIR2005SC4256 , and submitted that the notification dated 23.4.2004 issued by the Central Govt. in the Ministry of Environment and Forest in exercise of the powers conferred under Section 3(3) of the Environment (Protection) Act for creating a Compensatory Afforestation Management Fund and Planning Authority and colleted payments under the heading of Net Present Value (NPV) for a compensatory afforestation fund. This notification was challenged before the apex Court which upheld the same and the Court in no uncertain terms gave stress on collection for afforestation for maintaining forest coverage. In this regard the argument of the learned Counsel for the petitioner was that the aforesaid notification was issued by the Central Govt. in exercise of the power conferred under Section 3(3) of the Environment (Protection) Act, which provides.
(3) The Central Government may, if it considers it necessary or expedient so to do for the purpose of this Act, by order, published in the official Gazette, constitute an authority or authorities by such name or names as may be specified in the order for the purpose of exercising and performing such of the powers and functions (including the power to issue directions under Section 5) of the Central Government under this Act and for taking measures with respect to such of the matters referred to in Sub-section (2) as may be mentioned in the order and subject to the supervision and control of the Central Government and the provisions of such order, such authority or authorities may exercise the powers or perform the functions or take the measures so mentioned in the order as if such authority or authorities had been empowered by this Act to exercise those powers or perform those functions or take such measures.
But in the case at hand it is an admitted fact that the decision taken by the State Govt. under Annexure-2 does not have any statutory sanction nor authority and, therefore, the same shall be taken as an executive decision.
19. So, the questions that fall for consideration are: (i) whether it is a levy and collection and (ii) whether this is a voluntary construction by the industrial houses and mine owners for the development of periphery where the industrial/mining activities are continuing.
20. Article 265 of the Constitution of India lays down that no tax shall be levied or collected except by authority of law. Law is also fairly settled that no tax can be imposed by any bye-law or rule or regulation unless the statute under which the subordinate legislation is made specially authorizes the imposition. See : [1971]81ITR105(SC) B.S. Banerjee v. State of M.P. There is also a distinction between tax and fee. Both are compulsory exactions of money by public authorities. Whereas a tax is imposed for public purposes and is notsupported by any consideration of service rendered in return, a fee is levied essentially for services rendered. As such, there is element of quid pro quo between the person who pays the fee and public authority, which imposes it. The element of compulsion or coerciveness is present in all kinds of imposition. It may be further stated here that the power to impose a tax is undoubtedly a legislative power and that power can be exercised either by the Legislature directly or by its delegate. In the case at hand, as there is no legislation for collection of the fund, the collection has no legislative sanction.
21. Learned Advocate General submitted that it is a policy decision of the State Govt. for the benefit of periphery development and it is voluntary. He further relied upon certain decisions as regards the passing of the demand. The question of passing of-the demand is not relevant for the present purpose as we are only dealing with the questions, as indicated in the foregoing paragraph.
The main argument advanced on behalf of the State was that though there is no legislative sanction behind it and the Executive Govt. while cannot go against the provisions of the Constitution or of any law, as reflected in Article 154, but it does not follow from this that in order to enable the Executive to function there must be a law already in existence and the powers of the Executive are merely to the carrying out those laws. According to the learned Advocate General, where the Executive is deemed to have the primary responsibility for the formulation of governmental policy and its transmission in law, though condition precedent to the exercise of this responsibility is itself retaining the confidence of the legislative branch of the State. It was further submitted that the aforesaid contribution/collection is certainly an experiment which the State is attempting not suo motu but looking at the pragmatic circumstances and the obiter of Samatha. It was further argued that basically the issue is that there may be misuse but merely for possibility of a misuse the law cannot be declared invalid.
22. Learned Advocate General further argued that time has come to protect the interest of tribal land losers and it should be ensured that every such development is accompanied by a sensitive rehabilitation and employment package and the rehabilitation policy should be full-proof and implementation of such policy as well as issues pertaining to peripheral development should be effectively monitored through Committees/Trusts constituted for the purpose. The policy should, inter alia, include preferential employment from the families of the project-affected persons. In order to protect the interest of tribal land losers, this novel idea of Periphery Development Fund was conceived and an independent society has been constituted and registered for the purpose. In this regard, he cited before us the example of Maoris, the indigenous inhabitants of New Zealand, who were mostly indulging in criminal activities and in 1986 the Govt. passed a State-owned Enterprises Act. This established profit as the main motive of nine new and five existing corporations. Land over which Maoris had claims was to be transferred to the corporations. The Maori Council took the Govt. to Court to protect land claims and succeeded. It was a land-mark case against the Govt. which had been heralded as leading to a revolution in Maori affairs. Giving the above example of Maori, learned Advocate General wanted to argue that the said judgment is a court-made law in exercise of judicial power in New Zealand.
23. We appreciate the eagerness, zeal and endeavour of the learned Advocate General to convince the Court that even though there is no legal sanction, a judge-made law can save the situation. But the case at hand is different. Here before us, the petitioner challenges the legality of collection and the question is whether such collection is authorized or unauthorized. In order to answer the aforesaid question, we have examined various aspect of the collection impugned in this proceeding and discussed the same in the foregoing paragraphs.
From the discussion made above, we have no hesitation to say that the levy/collection of Periphery Development Fund from the mine owners and industrial houses as per Annexure-2 does not have the legislative sanction. So, it is in violation of Article 265 of the Constitution. It answers the first issue.
24. So far as issue No. 2 is concerned, the dictionary meaning of the word 'voluntary' is 'working with no expectation' or 'acting by free choice, not by compulsion'. A bare reading of Annexure-2, i.e., fixing the percentage of the net annual profit, and Annexure-5, i.e., the letter of the Member Convenor-cum-Deputy Director Mines, Joda, quantifying the same and directing to pay in shape of demand draft in favour of the Periphery Development Society as well as Annexure-7, i.e., the proceedings of the special meeting for Periphery Development in which the R.D.C. (ND) cautioned to deposit the entire contribution in one go or in 2-3 instalments latest by 30.6.2005 and .observed that any deviation will not be tolerated, would show that (i) the amount of collection is certain, (ii) the manner of payment has been prescribed (iii) the time of payment has been fixed (iv) the authorities issuing notice are Government Officers, who are the Member Convenor-cum-Deputy Director, Mines, and the R.D.C. The element of volunteering is totally absent in the aforesaid collection. Rather there is a relentless effort on the part of the Govt. officials to collect the amount.
25. At this juncture, we refer to paragraph 114 of the judgment of Samatha in which the Apex Court has observed that the amount of profit so set apart as a permanent fund should be exempted from income tax liability and necessary sanction for exemption of the said amount from the income tax liability should be obtained and the Central Govt. should see that these activities are undertaken, carried on and maintained systematically and continuously. This has also not been done in the present case. If it would be compulsory, as observed in paragraph 231 of the judgment in Samatha, the objective can be achieved by bringing an appropriate legislation making it compulsory for the lessees within the tribal area to spend a portion of the income arising out of the mining business for the general upliftment of the living conditions of the tribal people and this should be in addition to the royalty and other cess under different legislations.
The State Govt. has neither made any legislation in this regard nor the collection is voluntary, as indicated above. Accordingly, we have no hesitation to hold that the collection of Periphery Development Fund in the shape as it is done is without any sanction of law. At the same time, we leave it open to the State to take appropriate steps, if it so likes, to make the collection voluntary and it should come up with all transparency to make it voluntary, and as per the observation in Samatha's case should take appropriate step with the Central Govt. for giving income tax exemption to those persons who voluntarily contribute to the Periphery Development Fund. If it wants to make it compulsory, appropriate legislation has to be made to that effect.
26. Accordingly, the resolution dated 15.1.2004 issued by the Govt. of Orissa in the Department of Steel and Mines vide Annexure-2, is quashed. The amount, which has already been spent, as indicated in the foregoing paragraphs and as admitted by the State, but not for the development/welfare of the tribal should be made good by the State Govt. to Periphery Development Fund. The amount which has already been collected need not be refunded to the petitioner but the same should be spent under the strict supervision of the Govt. on the development and welfare of the tribal.
27. The writ petition is disposed of with the above order.
A.K. Parichha, J.
I agree.