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2020 DIGILAW 756 (AP)

S. K. Sarawagi & Co. Pvt. Ltd. v. State of A. P.

2020-12-01

K.VIJAYA LAKSHMI

body2020
ORDER : K. Vijaya Lakshmi, J. 1. This application is filed seeking to pass an interim order directing the respondents to permit the petitioner to operate the mine over an extent of 4.0155 Hec. in Sy. Nos. 5(P), 6/1, 6/2, 6/3P, 6/5, 6/6, 6/7, 9, 10/2 of Chinaravyam village, Merakamudidam Mandal, Vizianagaram District, including issuance of the necessary royalty permits/transit forms. 2. Writ petition is filed challenging the demand raised by the 4th respondent vide demand notice dated 11.09.2020 as confirmed by the order of the 2nd respondent vide proceedings dated 19.11.2020, dismissing the appeal filed by the petitioner/lessee. 3. 2. Writ petition is filed challenging the demand raised by the 4th respondent vide demand notice dated 11.09.2020 as confirmed by the order of the 2nd respondent vide proceedings dated 19.11.2020, dismissing the appeal filed by the petitioner/lessee. 3. Case of the petitioner, in brief is that, for the purpose of carrying out its mining activities, the petitioner company has been entering into various mining leases with the State Government, in terms of the provisions of Mines & Minerals (Development and Regulation) Act, 1957 (for short 'the Act'); it has been carrying on the business of mining and exporting manganese ore since 1950; petitioner merely extracts mine and supply the same to the purchasers, who transport the same from pit head, in their vehicles; petitioner obtains dispatch permits (transit permits) for transporting the mineral by the purchasers, after payment of necessary royalty charges under the rules to the authorities; the mineral rejected and sub-grade material was kept aside in the land owned by the petitioner adjacent to the mining leased area, to facilitate the loading, for transporting of the ore already explored to the customer's place; petitioner obtained royalty permit for transporting the manganese ore and paid the royalty on 20.08.2020 in respect of the ore loaded in ten lorries to be transported to the customer; respondents provided the User ID in respect of the ore for which royalty was paid; by using the said user ID, the print outs of the necessary royalty permits together with transit forms in respect of the said vehicles could not be taken for want of poor net connectivity in the site area; awaiting the royalty permits, the said vehicles were parked in the adjacent site owned by the petitioner; at that stage, the 4th respondent along with his staff inspected the mine in question, compelled to sign and petitioner's representatives signed by endorsing 'under protest' and all the ten vehicles were seized; representatives of the petitioner requested not to effect seizure, as there is no violation and presented all the documents including royalty (transit) permits in original which cover the mineral in the vehicles; they also directed the petitioner's representatives orally not to operate the mines without issuing any proceedings to that effect. 4. 4. While so, petitioner received show cause notice dated 24.08.2020 from the 4th respondent alleging that it attracts penalty under Section 21 of the Act and also amounts to violation of Section 9 of the Act and contravention of Rules 12 and 39 of the Mineral (other than Atomic & Hydrocarbon Energy Minerals) Concession Rules, 2016 and violation of Section 9 of the Act 1957; petitioner was compelled to deposit a huge sum of Rs. 50.00 lakhs under protest on behalf of the 3rd party for the release of the lorries; the rules referred to in the show cause notice do not apply to the petitioner, as the petitioner is not a dealer in minerals. 5. Petitioner received demand notice 11.09.2020 from the 4th respondent raising a demand for a huge sum of Rs. 4,24,40,850/- towards penalty under Section 21(5) of Act, 1957. Challenging the same, petitioner filed an appeal before the 2nd respondent; petitioner also filed an interim application in the said appeal, to permit the petitioner forthwith to operate the mine, pending disposal of the appeal; as there is no response from the 2nd respondent either in the appeal or in the interim application, petitioner filed WP No. 18314 of 2020 questioning the impugned demand notice dated 11.09.2020; the said writ petition came up for consideration on 08.10.2020 and an interim order was passed directing the 2nd respondent to dispose of the interim application in the said appeal within two weeks; petitioner vide letter dated 30.10.2020 requested the appellate authority to furnish copies of certain documents, as they were not given by the 4th respondent-Original Authority, before raising the impugned demand but the said required documents were not furnished to the petitioner; though this court directed the 2nd respondent to pass orders on the interim application, however, the main appeal itself was dismissed by the 2nd respondent on 19.11.2020 without considering the grounds of appeal. Challenging the same, present writ petition is filed. 6. Challenging the same, present writ petition is filed. 6. Sri C.V. Mohan Reddy, learned senior counsel, representing Sri A. Veeraswamy, learned counsel for the petitioner, submits that the 2nd respondent dealt with the matter as if it is an appeal preferred under Rule 35 of the A.P. Minor Mineral Concession rules, 1960, whereas, the appeal was preferred under Rule 11(1) in the prescribed Form-I appended to the A.P. Mineral Dealers Rules, 2000, though the said rules have no application to the petitioner's case and though the 4th respondent has no jurisdiction to pass the order and consequently, the 2nd respondent could not have entertained the appeal, only for reason that while issuing impugned demand, the respondents invoked Rule 8(i)(iv) of the A.P. Mineral Dealers Rules, 2000. He further submits that the petitioner is only a lessee and not a dealer within the meaning of Rule 2(1)(d) of the A.P. Mineral Dealers Rules, 2000. The learned senior counsel further submits that the petitioner has paid the royalty on the ore as mandated under Section 9 of the Act, read with 39 of the Rules of 2016 which enables the transport of the ore, and that the original royalty permit was also produced during the course of inspection. Learned senior counsel further submits that the said order is passed without giving any reasons whatsoever and that none of the grounds raised in the grounds of appeal were considered and discussed. 7. The contentions raised by the learned senior counsel prima-facie appear to be correct and the issues raised herein can be decided only after filing of the counter-affidavit by the respondents. 8. Apart from that as seen from the impugned order of the 2nd respondent dated 19.11.2020, the appeal was dismissed observing, without answering the contentions raised in the grounds of appeal, as under: "The Assistant Director of Mines St Geology, Vizianagaram has reported that the appellant has procured and stocking manganese ore covering a quantity of 12,776 mts. without having valid transit forms and also without registering the stock point located at Sy. No. 8/6 of Chinaravyam village, Merakamudidam Mandal, Vizianagaram District. Hence, the appellant is liable for payment of normal royalty fee, market value of the evaded mineral along with other applicable taxes of DMF, NMEF totalling to an amount of Rs. 4,24,40,850/-. without having valid transit forms and also without registering the stock point located at Sy. No. 8/6 of Chinaravyam village, Merakamudidam Mandal, Vizianagaram District. Hence, the appellant is liable for payment of normal royalty fee, market value of the evaded mineral along with other applicable taxes of DMF, NMEF totalling to an amount of Rs. 4,24,40,850/-. A personal hearing of the appeal was conducted on 12.11.2020 attended by the appellant and the Assistant Director of Mines and Geology, Vizianagaram. After hearing the arguments, it was decided to dismiss the appeal. In view of the above and in exercise the powers conferred under Rule 35 of Andhra Pradesh Minor Mineral Concession Rules, 1966, the appeal dt. 22.09.2020 filed by M/s. S.K. Sarwagi St Co., Pvt. Ltd., is hereby dismissed. The Deputy Director of Mines and Geology, Vizianagaram and the Assistant Director of Mines and Geology, Vizianagaram are directed to take necessary action in the matter as per rules." 9. Learned Government Pleader appearing for the respondents submits that in cases where demand notices are challenged, petitioners were directed to pay normal fees pending disposal of the writ petitions. 10. In view of the facts and circumstances of the case, on payment of normal royalty fee as demanded in demand notice dated 11.09.2020, there shall be an interim direction to the respondents to issue necessary royalty permits/transit forms in accordance with the Act and the relevant rules, for a period of FOUR (4) weeks. 11. List the matter on 22.12.2020.