JUDGMENT : B.R. SARANGI, J. The Petitioners, by way of this writ petition, seek to quash the letters dated 20.01.2004, 06.04.2004, 29.08.2008, 04.10.2008 and 15.04.2011 as at Annexures-1, 3, 7, 8 and 12 respectively issued by the Deputy Director Mines, Joda, Keonjhar, directing the Petitioner-Company to pay a sum of Rs.6,93,99,308/- towards loss of royalty and Rs.7,07,44,492/- as interest thereon due to beneficiations of high grade lump iron ore for the period from October, 1994 to September, 2000, and to issue direction to the Opposite Parties to grant “Mining Dues Clearance Certificate” in favour of the Petitioner- Company without any further delay. 2. The factual matrix of the case, in brief, is that Petitioner No.1, being a Company registered under the Companies Act, 1956 and a manufacturer of iron and steel in the country, has set up an integrated steel plant at Jamshedpur. Petitioner No.2 is the Chief Resident Executive of Petitioner No.1 Company and is authorized to file the writ petition by virtue of the Board Resolution dated 07.04.2008 of Petitioner No.1-Company. As such, it is an old Mining Company in the country and owns mineral rights of various minerals like iron ore, chromite, limestone, dolomite, manganese, coal etc. 2.1 Petitioner-Company was granted the mining lease in the name of Joda East Iron and Manmore Manganese in the year 1925 by the then Maharaja of Keonjhar Estate over an area of 2.59 sq. mile for a period of 30 years from 01.07.1925 to 30.06.1955 vide Registered Deed No.9 of 1926 dated 28.04.1926. Two subsequent renewals for 30 years each were also granted by the Mining & Geology Department, Govt. of Orissa for the period from 01.07.1955 to 30.06.1985 vide Registered Lease Deed No.1487 dated 19.07.1965 and from 01.07.1985 to 30.06.2005 vide Registered Lease Deed No.23 dated 20.01.1998 respectively. During the 1st renewal period, Joda East Iron and Manmora Manganese were bifurcated and formed a separate lease for Manmora Manganese lease over 16.350 ha. As per the provision under Rule-24A (1) of Mineral Concession Rules, 1960, Petitioner-Company had applied for its 3rd renewal on 27.04.2004. 2.2 When the matter stood thus, Petitioner- Company set up a beneficiation plant of iron ore within its leasehold area of Joda East Iron Mines. The ore is extracted by open cast method of mining for which mining benches are prepared. 2.2 When the matter stood thus, Petitioner- Company set up a beneficiation plant of iron ore within its leasehold area of Joda East Iron Mines. The ore is extracted by open cast method of mining for which mining benches are prepared. Firstly, holes are drilled on the benches covering entire height of the bench at regular distance depending on ore types. After charging of the holes with explosives the portion of the bench is blasted. The blasted materials, which are known as Run of Mines (of grade from 58% Fe to 65% Fe), consist of boulders, fragments, fines and other extraneous material transported to the processing plant for crushing, screening and washing. Usable products of more than 0.15 mm are recovered as size and fines ore. The minus 0.15 mm fraction in the form of slime (mixed with washed water and impurities) are stored in the slime dam inside the leasehold area. The water is recovered and reused after settling of slime. 2.3 Petitioner-Company has been regularly submitting its return in Form-A and A-1 in respect of production, dispatch of iron from its Joda East Iron Mines and also paying the royalty in due time as prescribed under the provisions of Mines and Minerals (Regulation and Development) Act, 1957 and Rules made thereunder. 2.4. The Deputy Director of Mines, Joda-Opposite Party No.3 wrote vide letter dated 20.01.2004 to the Petitioner-Company stating inter alia as follows:- “From No.A-1 submitted by you are in a consolidated form pertaining to whole year, from there it is observed that some loss of iron ore has been shown while processing of High grade Lump Iron Ore produced from your mines and fed to the crusher in operation in the leasehold area. The total quantity of unprocessed run of mine ore consumed in the process of beneficiation for recovery of processed mineral will be taken into account fir the recovery of processed mineral will be taken into account for the purpose of assessment of royalty but not on the processed mineral (sized iron Ore and Fines) in accordance with Sect.9 of M.M.(DR) Act, 1957 at the rate specified in the IInd Schedule of the Act basing on the judgment of the Hon’ble Supreme Court of India, Dt.10.08.98 vide Civil Appeal No.3693 and 94 of 1998 (Arising out of SLP© No.16718/91 and 16665/92). Further, it is revealed that you have fed 1, 14, 41,817 Mts of Iron Ore (+ 65% Fe (Lump) and (-65% Fe) Iron Ore (Fines) recovered there from 69, 58,274 Mts of +65% Fe, (Lump) and (Fines) showing loss of 45, 13,543 Mts, for which you are liable to pay royalty in view of judicial pronouncement cited above.” 2.5 Relying upon the judgment of the apex Court in the case of State of Orissa v. Steel Authority of India, (1998) 6 SCC 476 , the aforesaid letter was issued by the Deputy Director of Mines, Joda-Opposite Party No.3. In response to the letter dated 20.01.2004 of the Deputy Director of Mines, Joda-Opposite Party No.3, Petitioner-Company gave reply to the same denying its liability to pay the royalty and further stated that the judgment dated 10.08.1998 of the apex Court in the case of Steel Authority of India (supra) has no application to the present case. In spite of such letter being issued, Deputy Director of Mines, Joda-Opposite Party No.3, wrote a letter on 06.04.2004 to the Petitioner-Company directing to pay a sum of Rs.1,55,06,518/- as loss of royalty due to beneficiation of high grade lump iron ore within the leasehold area. On 08.06.2004, Petitioner-Company wrote a letter to the Deputy Director of Mines stating that in view of the judgment of the apex Court in the case of National Mineral Development Corporation Limited v. State of M.P., (2004) 6 SCC 281 , it is not liable to pay the royalty either on the Run of Mine iron ore or on slime generated from beneficiation of iron ore (i.e. loss due to beneficiation). Thereafter, the Deputy Director of Mines, Joda-Opposite Party No.3, wrote a letter on 05.08.2004 to the Director of Mines, Orissa-Opposite Party No.2, brining to its notice about the judgment dated 05.05.2004 of the apex Court in the case of National Mineral Development Corporation Limited (supra), wherein the apex Court held that the slimes are excluded from the charge of royalty and further requested to issue necessary instructions whether he will allow the Petitioner-Company to sell the slimes. On 30.08.2004, the Director of Mines, Orissa-Opposite Party No.2, wrote a letter to the Principal Secretary, Department of Steel stating that in view of the decision of the apex Court, the amount so demanded on TISCO is not payable and, as such, the same may be dropped. On 30.08.2004, the Director of Mines, Orissa-Opposite Party No.2, wrote a letter to the Principal Secretary, Department of Steel stating that in view of the decision of the apex Court, the amount so demanded on TISCO is not payable and, as such, the same may be dropped. But the Deputy Director of Mines, Joda-Opposite Party No.3, without taking into consideration the judgment of the apex Court in National Mineral Development Corporation Limited (supra), issued letter on 29.08.2008 to the Petitioner-Company directing to pay a sum of Rs.6,80,54,191/- as loss of royalty and interest (Rs.3,47,63,581/-+Rs.3,32,90,610/-= Rs.6,80,54,191/-) in respect of Joda East Iron Mines for the period from 1994-95 to 2000-01 towards shortage of iron ore due to beneficiation. Further, the Deputy Director of Mines, Joda-Opposite Party No.3, also issued a letter on 04.10.2008 stating inter alia that as per the A.G. audit (revised) calculation, Petitioner-Company is liable to pay a sum of Rs.6,93,99,308/- towards loss of royalty and interest of Rs.7,07,44,492/- due to beneficiation of iron ore in respect Joda East Iron Mines for the period from 1994-95 to September, 2000. The Director of Mines-Opposite Party No.2, vide letter dated 31.03.2009, addressed to F.A.-cum-Joint Secretary to Government Department of Steel and Mines, Orissa, stated that the amount demanded on M/s TISCO Limited is not payable and, as such, the same may be dropped. On 18.08.2010 and 14.02.2011, Petitioner-Company applied for its “Mining Dues Clearance Certificate” to the Director of Mines, Orissa-Opposite Party No.2. The said applications are pending before the Director of Mines, Orissa-Opposite Party No.2, on the ground of non-payment of royalty and interest. Due to non-issuance of “No Due Certificate” Petitioner-Company has been facing difficulties in renewing its lease, trading license and removal of ore etc. The Deputy Director of Mines, Joda-Opposite Party No.3, on 15.04.2011, issued a letter by giving reference of his earlier letters dated 29.08.2008 and 04.10.2008 and mentioned that “once again you are requested to pay a sum of Rs.6,93,99,308/- towards loss of royalty and interest of Rs.7,07,44,492/- due to beneficiation of iron ore in respect of Joda East Iron Mines for the period from 1994-95 to September, 2000, as pointed out by the A.G. Audit within 15 days, failing which action will be taken to recover the aforesaid dues through certificate proceeding. Hence this application. 3. Mr. Hence this application. 3. Mr. S.P. Sarangi, learned counsel for the Petitioners emphatically contended that the letters issued on 20.01.2004, 06.04.2004, 29.08.2008, 04.10.2008 and 15.04.2011 by the Deputy Director of Mines, Joda, directing the Petitioner-Company to pay royalty and interest thereon due to beneficiation of high grade lump iron ore for the period from October, 1994 to September, 2000 are without jurisdiction, illegal, arbitrary, contrary to the law laid down by the apex Court and also violates Articles 14 and 19 (1) (g) of the Constitution of India. It is further contended that the demand of royalty levied by the Deputy Director Mines, Joda-Opposite Party No.3, is based on the A.G. Audit Report, which is based on the judgment of the apex Court in the case of Steel Authority of India Limited (supra) and, as such, the same was distinguished by the apex Court in the case of National Mineral Development Corporation Limited (supra). Thereby, the demand so raised cannot have any justification and the same has to be quashed. It is further contended that on the basis of the ratio decided in National Mineral Development Corporation Limited (supra), Opposite Party No.2-Director of Mines, on 30.08.2004 and 31.03.2009, has recommended to the State Government to drop the proceeding against the Petitioner-Company. In spite of such communication made, no action has been taken and arbitrarily demands have been raised, which cannot sustain in the eye of law and has to be quashed. Even though the Petitioner-Company applied for grant of “mining dues clearance certificate” by filing applications dated 18.08.2010 and 14.02.2011 for the purpose of renewal of its lease, trade license and removal of ore from mines, the same are still pending before the Opposite Party No.2-Director of Mines, on the ground of non-payment of royalty and interest thereon, even though the Petitioner-Company is not liable to pay the same. It is further contended that determination of royalty by the A.G. Audit has not been arrived at in accordance with the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 and Mineral Concession Rules, 1960. Therefore, the same cannot be enforced and compelled by the Opposite Parties to pay the same, as the same is contrary to the judgment of the apex Court. Therefore, the same cannot be enforced and compelled by the Opposite Parties to pay the same, as the same is contrary to the judgment of the apex Court. Therefore, he seeks for quashing of the demand made by the authority vide letters dated 20.01.2004, 06.04.2004, 29.08.2008, 04.10.2008 and 15.04.2011 under Annexures-1, 4, 8, 9 and 12, respectively. To substantiate his contentions, he has placed reliance on the judgments of the apex Court in the cases of State of Orissa v. Steel Authority of India Ltd., (1998) 6 SCC 476 ; and National Mineral Development Corporation Ltd. v. State of M.P., (2004) 6 SCC 281 . 4. Mr. T. Pattnaik, learned Addl. Standing Counsel for the State-Opposite Parties contended that the Accountant General, Audit, vide Report on RAP-27 (Mining Review) dated 11.12.2003 and Report on RAP- 16 (Mining Review) has held that the referred demanded dues to be payable towards loss of royalty and interest accrued thereon till the date of demand and in accordance therewith the demand has been raised pursuant to letters, as mentioned above. As per the provisions contained in M.M. (D&R) Act, 1957 and Rules framed thereunder, the lessee has to maintain a correct and intelligible account of ore/mineral produced, consumed and dispatched daily and to submit a copy of such account as a monthly return in administrative Form-A and A-1. But the Petitioner- Company did not follow the Rules and submitted a consolidated Annual Return for three consecutive years stating that the ore fed to the Plant was high grade. After examining the Reports submitted by the Petitioner-Company, it is observed that loss of some ore has been shown while processing of high grade iron ore produced from the Petitioner-Company’s mines and fed to the crusher in operation within the leasehold area. The total quantity of unprocessed run of mines ore is consumed in the process of beneficiating for recovery of the processed mineral. Thereby, the royalty is chargeable on the entire unprocessed run-off ores and not on the processed mineral alone as per the provisions contained in Section 9 of the M.M. (D&R) Act, 1957 at the rate specified in the Second Schedule to the Act, basing upon the judgment of the apex Court in the case of Steel Authority of India Limited (supra). Consequentially, the royalty payable on the fed quantity was assessed and the differential amount, after deducting the demanded/paid royalty over the finished product, was demanded. Thereby, no illegality or irregularity was committed by the Authority by making such demand pursuant to the letters, as mentioned above. It is further contended that the receipts of the mining revenue to the State Exchequer was reviewed by the A.G. Audit annually and after review, the Officers, who had conducted Audit, directed the Assessing Authorities to demand the short levied dues on the basis of their findings. In compliance of the observations of the Audit, the Assessing Authorities raised demand to the defaulters. Thereby, the demands have been raised by the Authorities to pay the royalty and interest thereon on run-off iron ores and slimes. As such, the demand so made is well justified, which does not require any interference of this Court at this stage. Consequentially, he seeks for dismissal of the writ petition. 5. This Court heard Mr. S.P. Sarangi learned counsel for the Petitioners and Mr. T. Pattnaik, learned Addl. Standing Counsel for the State-Opposite Parties by hybrid mode. Pleadings having been exchanged between the parties, with the consent of learned counsel for the parties, this writ petition is being disposed of finally at the stage of admission. 6. For just and proper adjudication of the case, relevant provisions of Mines and Minerals (Regulation and Development) Act, 1957 are extracted hereunder:- “Sec.2. Declaration as to expediency of Union Control. - It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided. NOTES (1) Section-2- The Court, inter alia, pointed out that the expression ‘under the control of the Union’ occurring in Entry 54 in the Union List and Entry 23 in the State List did not mean ‘control of the Union Govt., because the Union consists of three limbs, namely, parliament, the Union Govt., and the Union Judiciary, and the control of the Union which is to be exercised under the said two entries is the one to be exercised by Parliament, namely, the legislative organ of the Union which is, therefore, rest in control of the Union. The Court further held that the Union had taken all the powers in respect of minor minerals to itself and had authorised the State Govt., to make rules for the regulation of leases and thus by the declaration made in Section 2 and the enactment of Section 15 the whole of the field relating to minor minerals came within the jurisdiction of Parliament and there was no scope left to the State Legislatures to make any enactment with respect thereto. (Bajinath Kedia vs. State of Bihar, AIR 1970 S.C.1436= (1970) 1 SCJ 913 ) ( Distg. In AIR 1982 SC 697 & AIR 1995 Ori. 65 ). (2) Section-2- The functions, powers and duties of Municipalities do not become an occupied field by reason of the declaration contained in Section 2. Though, therefore, on account of that declaration, the legislative field covered by Entry 23, List II (Seventh Schedule of the Constitution) may pass on the Parliament by virtue of Entry 54, List I, the competence of the State Government to enact laws for municipal administration will remain unaffected by that declaration. (Western Coalfields Ltd. vs. Spl. Area Development Authority, AIR 1982 SC 697 (707) = (1982) 1 SCC. 125 ). (3) Section-2 The various provisions contained in the central Act of 1957 also indicate that the Parliament while making the declaration in Section 2 has not taken under its control the field of taxation . Royalty is the payment made for the minerals extracted. It is not tax (Laxminarayan Agarwal vs. State of Orissa, AIR 1983 Ori. 210 (223) = (1983) 55 Cut. LT 364). (4) Section-2 The declaration made under this section has resulted to bring the entire field of mines and minerals within the jurisdiction of the Central Govt., and as such,, the State Govt., had no authority to legislate on its own on matters relating to minor minerals. Thus, the State Govt. can choose to frame rules but it cannot enact laws on the subject. (Chandeswar Prasad vs. Sub- Divisional L.R. Officer, AIR 1986 Cal 1 (15) = (1985) 89 Cal. WN 414). Thus, the State Govt. can choose to frame rules but it cannot enact laws on the subject. (Chandeswar Prasad vs. Sub- Divisional L.R. Officer, AIR 1986 Cal 1 (15) = (1985) 89 Cal. WN 414). (5) Section-2 From the discussion made therein, it follows that in view of declaration under Section 2 of the Act, the State is divided of legislative powers to enact any law in respect of regulation of mines and minerals development, hence the State can claim to execute power touching any aspect of regulation of mines and minerals development. (Govt. of A.P. vs. Y S Vivekananda Reddy, AIR 1955 A.P. 1 (FB) = 1994 (3) Alt 179 (FB), 1994 (2) An. WR 300). xxx xxx xxx Sec.9. Royalties in respect of mining leases.? (1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral. (2-A) The holder of a mining lease, whether granted before or after the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972 (56 of 1972) shall not be liable to pay any royalty in respect of any coal consumed by a workman engaged in a colliery provided that such consumption by the workman does not exceed one-third of a tonne per month. (3) The Central Government may, by notification in the Official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification: Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of 1[three years]. xxx xxx xxx Entry-23 23. Iron Ore: (i) Lumps (a) With 65 per cent Fe content or more: twenty seven rupees per tonne. (b) With 62 per cent Fe content or more but less than 65 per cent Fe: Sixteen rupees per tone (c) With less than 62 per cent Fe content: Eleven rupees per tonne (ii) Fines (including inter alia natural fines produced incidental to mining and sizing lumpy ore) (a) With 65 per cent Fe content or more: Nineteen rupees per tonne (b) With 62 per cent Fe content or more but less than 65 per cent Fe: Eleven rupees per tonne (c) With less than 62 per cent Fe content: Eight rupees per tonne (iii) Concentrates prepared by beneficiation and/or concentration of low grade ore containing 40 per cent Fe or less: Four rupees per tonne” Rules 64-B and 64-C of Mineral Concession Rules, 1960, being relevant for the purpose of the case are also extracted hereunder:- “64-B- Charging of Royalty in case of minerals subjected to processing: - (1) In case processing of run-of-mine minerals is carried out within the leased area, then, royalty shall be chargeable on the processed minerals removed from the leased area. (2) In case run-of-mine mineral is removed from the leased area to a processing plant which is located outside the leased area, then, royalty shall be chargeable on the unprocessed run-of mine mineral and not on the processed product. NOTES Re.64-B & C Royalty cannot be charged on ‘slimes’ of iron ore. Rules 64-B and 64-C suggest that dumped tailings or rejects (or in other words ‘slimes’) are to be treated as a separate head and charge of royalty therein is not to be made as a matter of course. Dumped tailings or rejects may be liable to payment of royalty if only they are sold or consumed, National Mineral Development Corporation Ltd. v. State of M.P., AIR 2004 SC 2456 = 2004 (5) SCALE 345 = 2004 AIR SCW 2939. Dumped tailings or rejects may be liable to payment of royalty if only they are sold or consumed, National Mineral Development Corporation Ltd. v. State of M.P., AIR 2004 SC 2456 = 2004 (5) SCALE 345 = 2004 AIR SCW 2939. 64-C. Royalty on tailings or rejects:- On removal of tailings or rejects from the leased area for dumping and not for sale or consumption, outside leased area such tailings or rejects shall not be liable for payment of royalty: Provided that in case so dumped tailings or rejects are used for sale or consumption on any later date after the date of such dumping, then, such tailings or rejects shall be liable for payment of royalty. Furthermore, Article 265 of the Constitution of India, having significance for deciding the lis between the parties, is quoted hereunder:- “265. No tax shall be levied or collected except by authority of law.” 7. On perusal of the aforesaid provisions, it is made clear that in view of the declaration contained in Sections 2 and 9 of the MMDR Act, read with the Second Schedule, once the Parliament has declared that it is expedient in the public interest that the Union should take under its control the regulation and development of minerals to the extent provided in the MMDR Act, it becomes the exclusive subject for legislation by the Parliament alone. In view of Section 9(3) of the MMDR Act, it is the Central Government which has the jurisdiction to amend the Second Schedule to enhance or reduce the rate of royalty which shall be payable in respect of each mineral. The law prescribes both the Authority to levy the royalty, the subject of levy as well as the rate at which it is to be levied. As such, the legislation, on all the three aspects, is within the exclusive domain of the Parliament. The role of the State Government is limited to its implementation and collection of royalty for minerals extracted from within its territorial bounds. On perusal of Second Schedule to the MMDR Act it is thus evident that different subjects and rates of royalty have been identified for different minerals in line with their characteristics. When the statute itself treats coal differently from iron ore, the Authority cannot and could not have gone beyond the provisions of law applicable to the present context. On perusal of Second Schedule to the MMDR Act it is thus evident that different subjects and rates of royalty have been identified for different minerals in line with their characteristics. When the statute itself treats coal differently from iron ore, the Authority cannot and could not have gone beyond the provisions of law applicable to the present context. As it appears, demands have been raised pursuant to judgment of the apex Court in the case of Steel Authority of India Limited (supra), wherein Section 9 of the MMDR Act has been taken note of in Paragraph-11 of the said judgment which is extracted hereunder:- “It is to be noted that the levy of royalty is in respect of minerals removed or consumed by the contractor from the leased area. We have seen earlier the process that the mineral was said to undergo before the same was removed from the leased area. Section 9(1) of the Act also contemplates the levy of royalty on the mineral consumed by the holder of a mining lease in the leased area. If that be so, the case of the appellants that such processing amounts to consumption and, therefore, the entire mineral is exigible to levy of royalty has to be accepted. We are unable to agree with the distinction made by the High Court and the conclusion that the royalty can be levied only on the quantity of mineral obtained after processing.” 8. So far as constitutionality of levy of cess on the royalty, the apex Court has referred to the judgment in the case of India Cement Ltd. v. State of Tamil Nadu, (1990) 1 SCC 12 , wherein also reference was made to the judgment of the apex Court in the case of Western India Theatres Ltd. v. Cantonment Board, Poona Cantonment, AIR 1959 SC 582 , and it was held that royalty is payable on a proportion of the minerals extracted. In view of the provisions contained in Section 9, there is no iota of doubt that demand of royalty can be raised on mineral extracted subject to certain process to remove waste and foreign matter. But it was held that such processing amounts to consumption. Thereby, the Lessee-Manufacturer is liable to pay the royalty on the entire mineral extracted by him and not only on the net quantity of mineral obtained after processing. But it was held that such processing amounts to consumption. Thereby, the Lessee-Manufacturer is liable to pay the royalty on the entire mineral extracted by him and not only on the net quantity of mineral obtained after processing. Consequentially, the apex Court held that the High Court was not right in quashing the demands which were rightly calculated and levied and set aside the judgment of the High Court and dismissed the writ petition filed by the Opposite Parties by allowing to operate the Petitioner by the State of Orissa. 9. It is made clear that in view of Section-9 read with Second Schedule, principles have been followed for levy of royalty. But Section-9 is not the beginning and end of the levy of royalty. Rather royalty has to be quantified for the purpose of levy and that cannot be done unless the provisions of the Second Schedule are taken into consideration. Therefore, reading of Section 9, which authorizes charging of royalty, cannot be complete unless what is specified in Schedule-II is also read as part and parcel of Section 9. For the purpose of levying any charge, not only the said charge to be authorized by law, it has also to be computed. The charging provision and the computation provision whether in one place, or not, have to be read together as constituting one integrated provision. In case of doubt or ambiguity, the computing provisions shall be so interpreted as to act in aid of the charging provision. Therefore, in National Mineral Development Corporation Ltd. (supra), the apex Court held that royalty is not payable either on run iron ore or slimes generated from beneficiation from iron ore within the lease hold areas. Relevant paragraphs of the said judgments, such as, Paragraphs-22 to 26 and 28 to 36 read thus:- “22. There can be no manner of doubt that the entire material extracted from the earth , so far as iron ore mines are concerned, has to be subjected to a process for the purpose of winning iron there from. The process results in (i) lumps, (ii) fines, and (iii) slimes. Section 9 of the Act obliges the holder of a mining lease to pay royalty in respect of any minerals removed or consumed from the leased area. The process results in (i) lumps, (ii) fines, and (iii) slimes. Section 9 of the Act obliges the holder of a mining lease to pay royalty in respect of any minerals removed or consumed from the leased area. If only it would have been the question of considering Section 9 and determining the impact thereof, maybe, it is the total quantity of mineral removed from the leased area or consumed in the beneficiation process which would have been liable for payment of royalty and that quantity may have included the quantity of slimes as well, as was held by this Court in State of Orissa v. Steel Authority of India Ltd.. But in case of iron ore the process of beneficiation involves introduction of catalytic agent leading to separation and generation of waste consisting of impurities which the scheme of the Act has left out from charging. 23. Section 9 is not the beginning and end of the levy of royalty. The royalty has to be quantified for purpose of levy and that cannot be done unless the provisions of the Second Schedule are taken into consideration. For the purpose of levying any charge, not only has the charge to be authorized by law, it has also to be computed. The charging provision and the computation provision may be found at one place or at two different places depending on the draftsman’s art of drafting and methodology employed. In the latter case, the charging provision and the computation provision, though placed in two parts of the enactment, shall have to be read together as constituting one integrated provision. The charging provision and the computation provision do differ qualitatively. In case of conflict, the computation provision shall give way to the charging provision. In case of doubt or ambiguity the computing provision shall be so interpreted as to act in aid of charging provision. If the two can be read together homogeneously then both shall be given effect to, more so, When it is clear from the computation provision that it is meant to supplement the charging provision and is, on its own a substantive provision in the sense that but for the computation provision the charging provision alone would not work. The computing provision cannot be treated as mere surplus age or of no significance; what necessarily flows there shall also have to be given effect to. 24. The computing provision cannot be treated as mere surplus age or of no significance; what necessarily flows there shall also have to be given effect to. 24. Applying the above stated principle, it is clear that Section 9 neither prescribes the rate of royalty nor does it lay down how the royalty shall be computed. The rate of royalty and its computation methodology are to be found in the Second Schedule and therefore the reading of Section 9 which authorities charging of royalty cannot be complete unless what is specified in the Second Schedule is also read as part and parcel of Section 9. 25. A bare reading of Entry 23 reveals that Parliament has not chosen to compute royalty on iron ore by itself and quantifiable as run-of-mine( ROM). Parliament is conscious of the fact that iron ore shall have to be subjected to processing is conscious of the fact that iron ore shall have to be subjected to processing to processing where after it would yield (i) lumps, (ii) fines, (iii) concentrates, and (iv) slimes – the last one to be found deposited in the tailing pond. Parliament has to be attributed with the knowledge that keeping in view the advancements in the field of science and technology as on the day, the smiles do not have any commercial value. While carrying out prospecting operations it is known what will be the strength of the iron ore (i.e. the percentage of ferrous content) available in a particular area. By reference to such strength or quality of iron ore, the rate of royalty could have been made available for calculation based on the quantity of the iron ore as run-of-mine and quantifiable on per tonne of iron ore, that is, tonnage of iron ore as such. Parliament has chosen not to do so. Entry 23, the manner in which it has been drafted, mandates the quantification of royalty to await or be postponed until the processing has been carried out and the lumps, fines and concentrates are prepared. Once the result of processing is available, the lumps, fines and the concentrates are subjected to levy of royalty at different rates applied by reference to the quantity of each of the three items earned as a result of processing. The slimes have been left out of consideration vy Entry 23 for the purpose of quantification and levy. 26. Once the result of processing is available, the lumps, fines and the concentrates are subjected to levy of royalty at different rates applied by reference to the quantity of each of the three items earned as a result of processing. The slimes have been left out of consideration vy Entry 23 for the purpose of quantification and levy. 26. The High Court is, therefore, not right in forming an opinion that the slimes are part of fines and hence liable to be included in clause (ii) of Entry 23 for the purpose of charging the royalty. In the mining circles, fines and slimes both have different meanings. Both the terms are well understood as two different objects. Slimes cannot be included in "fines". xxx xxx xxx 28. It is clear that in iron ore production the run-of-mine (ROM) is in a very crude form. A lot of waste material called "impurities" accompanies the iron ore. The ore has to be upgraded. Upgrading the ores is cal led "beneficiation". That saves the cost of transportation. Different processes have been developed by science and technology and accepted and adopted in different iron ore projects for the purpose of beneficiation. In the processes, a stage is reached which yields concentrates. They are treated in the concentrate plant by resort to physical, chemical and/or electrical methods. The valuable constituents are retained and what is discarded as "tailings" or "slimes" is something of no commercial value, being just impurities consisting of unusable materials. Concentrates is not necessarily a stage reached in all the processes. Concentrates consist of enriched ore segregated from waste in concentration plant. It is a substance of intensified strength having been purified by removal of valueless mud, slurry, impurities and waste. Wet processing (at a stage after fines have already been won) separates extremely fine particles, grains or fragments of ore which are too poor to be treated any further and have to be flown for being consigned to tail ponds as waste separated from concentrates. From concentrates iron can yet be won. Concentrates differ from slimes which are to be found as such not in concentration plant but only in tail pond. What reaches tailings dam or pond is slurry. Solid particles are deposited and clean water overflows. This processing is done to prevent pollution and to protect environment. From concentrates iron can yet be won. Concentrates differ from slimes which are to be found as such not in concentration plant but only in tail pond. What reaches tailings dam or pond is slurry. Solid particles are deposited and clean water overflows. This processing is done to prevent pollution and to protect environment. There are ferrous contents in the slurry but that is a total waste. Inasmuch as, and undisputedly, by any process or technique known to science and technology till this date, winning of ferrous contents from out of the slurry is commercially unviable. The slimes are accepted by the mother earth once again to be dissolved in its womb. 29. Parliament knowing it full well that the iron ore shall have to undergo a process leading to emergence of lumps, fines, concentrates and slimes chose to make provision for quantification of royalty only by reference to the quantity of lumps, fines and concentrates. It left slimes out of consideration. Nothing prevented Parliament from either providing for the quantity of iron ore as such as the basis for quantification of royalty. It chose to make provision for the quantification being awaited until the emergence of lumps, fines and concentrates. Having done so Parliament has not said: "fines including slimes". Though "slimes" are not "fines" Parliament could have assigned an artificial or extended meaning to "fines" for the purpose of levy of royalty which it has chosen not to do. It is clearly suggestive of its intention not to take into consideration "slimes' for quantifying the amount of royalty. This deliberate omission of Parliament cannot be made good by interpretative process so as to charge royalty on slimes by reading Section 9 of the Act divorced from the provisions of the Second Schedule. Even if slimes were to be held liable to charge of royalty, the question would still have remained, at what rate and on what quantity, which questions cannot be answered by Section 9. 30. Maybe, at some point of time in future when science and technology have succeeded in evolving a process rendering the slimes a useful and valuable goods on account of availability of any process making it commercially viable to retrieve iron therefrom, Parliament may make appropriate amendment in Entry 23 by including therein "slimes" and prescribing the rate at which royalty shall be charged thereon. 31. 31. Mr Mukul Rohatgi, the learned Additional Solicitor General assisted by Mr P.S. Narasimha, learned counsel for the appellant, has brought to our notice a very significant amendment made in the Mineral Concession Rules, 1960. The Mineral Concession Rules, 1960 (hereinafter referred to as the Rules for short) have been framed by the Central Government in exercise of the powers conferred by Section 13 of the Mines and Minerals ( Regulation and Development) Act, 1957. Rules 64-B and 64-C have been introduced therein by GSR No. 743(E) dated 25-9-2000 which read as under: "64-B. charging of royalty in case of minerals subjected to processing - (1) In case processing of run-of-mine mineral is carried out within the leased area, then, royalty shall be chargeable on the processed mineral removed from the leased area. (2) In case run-of-mine mineral is removed from the leased area to a processing plant which is located outside the leased area, then, royalty shall be chargeable on the unprocessed run-of-mine mineral and not on the processed product. 64-C. Royalty on tailings or rejects — On removal of tailings or rejects from the leased area for dumping and not for sale or consumption outside leased area, such tailings or rejects shall not be liable for payment of royalty: Provided that in case so dumped tailings or rejects are used for sale or consumption on any later date after the date of such dumping, then, such tailings or rejects shall be liable for payment of royalty”. 32. Though the objects and reasons which prompted the above said amendment are not known to us (none placed for consideration by any of the parties), in all probability the same seems to have been prompted by the pronouncement of this Court in State of Orissa v. Steel Authority of India Ltd. Be that as it may, the above said Rules also suggest the intention of the Government that dumped tailings or rejects (or in other words "slimes") are to be treated as a separate head and charge of royalty thereon is not to be made as a matter of course. Dumped tailings or rejects may be liable to payment of royalty if only they are sold or consumed. Rules 64-B and 64-C are general in nature, applicable to all types of minerals. Dumped tailings or rejects may be liable to payment of royalty if only they are sold or consumed. Rules 64-B and 64-C are general in nature, applicable to all types of minerals. There are several other entries in the Second Schedule where a mineral is liable to royalty on tonnage basis no sooner extracted and as run-of-mine (ROM). Such entries do not further classify the mineral by reference to its constituents. The case of iron ore is different. So far as the iron ore is concerned, the provisions of Section 9 of the Act read with Entry 23 of the Second Schedule and the above said rules homogeneously construed do not subject the run-of-mine (ROM) to payment of royalty. The Second Schedule does not prescribe any rate of royalty on the iron ore as run-of-mine and the levy of royalty has to be postponed until the processing has been done and the quantity of lumps, fines and concentrates (none of which will include slimes) has been found out on the availability of which data alone the royalty is capable of being quantified. Under the Second Schedule, the slimes which have come into existence shall have to be excluded from the charge of royalty. 33. S/Shri S.K. Agnihotri and Prakash Shrivastava, the learned counsel for the States of Madhya Pradesh and Chhattisgarh submitted that Rules 64- B and 64-C have come to be framed on 25-9-2000 and cannot be applied retrospectively. We agree. There is no question of giving the above said amendment in the rules a retrospective operation. These rules only clarify the position as it already existed and are intended to remove the doubts. We have pressed the said two rules into service only for the purpose of reinforcing the conclusion which we have already arrived at dehors the said amendment in the rules. 34. The case of State of Orissa v. Steel Authority of India Ltd. which was relied on by the High Court and by the learned counsel for the respondents before us is distinguishable. There the question arose as to the charge of royalty on dolomite and limestone dealt with by Entries 15 and 26 respectively of the Second Schedule. Both these minerals were utilised as raw material by the mining lessees on the leased area itself. There the question arose as to the charge of royalty on dolomite and limestone dealt with by Entries 15 and 26 respectively of the Second Schedule. Both these minerals were utilised as raw material by the mining lessees on the leased area itself. The mining lessee claimed that dolomite and limestone having been extracted from the mine underwent processing wherein a part of the mineral was wasted and the wastage remained on the leased area and not removed there from. The contention of the lessee was that royalty could not be demanded on that portion of the wastage which was not removed from the mining area. This contention was repelled by this Court by reference to Section 9(1) of the Act which speaks of payment of royalty in respect of any mineral removed or consumed by the lessee. The Court held that though the impurities part of dolomite and limestone were not removed from the leased area but that would not make any difference as the run-of-mine was itself consumed in the processing on the leased area. 35. Entry 15 levies royalty on tonnage basis on the dolomite itself so also Entry 26 levies royalty on limestone itself as run-of-mine though two different rates are prescribed depending on the grade or percentage of silica content in the limestone. The scheme of those two entries is different from the scheme of Entry 23 dealing with iron ore. As no rate of royalty has been prescribed in the Second Schedule to be charged on slimes and also no rate of royalty has been prescribed on iron ore as run-of-mine, royalty cannot be charged on the wastage. 36. Our answers to the questions framed in the earlier part of this judgment are: (i) "Slime" or "slimes" is a term well understood in mining industry and trade. It is different from "fines" and "concentrates" — the term as used in the Second Schedule Entry 23 of this Act. (ii) "Sl ime" or "sl imes" cannot be included in "fines" or "concentrates" for the purpose of charging royalty under Section 9(1) read with Entry 23 of the Second Schedule of the Act." 10. It is different from "fines" and "concentrates" — the term as used in the Second Schedule Entry 23 of this Act. (ii) "Sl ime" or "sl imes" cannot be included in "fines" or "concentrates" for the purpose of charging royalty under Section 9(1) read with Entry 23 of the Second Schedule of the Act." 10. In Paragraph-34, as mentioned above, the apex Court has taken note of the judgment in the case of Steel Authority of India Limited (supra) and, as such, the apex Court has distinguished that judgment taking into consideration the question arose as to the charge of royalty on dolomite and limestone dealt with the Entries 15 and 26 respectively of the Second Schedule. Both these mineral were utilized as raw material by the mining lessee on the lease area itself. The mining lessee claimed that dolomite and limestone having been extracted from the mine underwent processing wherein a part of the mineral was wasted and the wastage remained on the leased area and not removed therefrom. The contention of the lessee was that royalty could not be demanded on that portion of the wastage, which was not removed from the mining area. The said contention was repelled by the apex Court, referring to Section 9(1) of the Act, which speaks of payment of royalty in respect of any mineral removed or consumed by the lessee. Thereby, the said judgment has been distinguished by the apex Court in National Mineral Development Corporation Limited (supra) and also specifically held that “slime” or “slimes” cannot be included in “fines” or “concentrates” for the purpose of charging royalty under Section 9(1) read with Entry 23 of the Second Schedule of the Act. Thereby, the demands raised in various letters, as mentioned above, referring to the judgment of the apex Court in the case of Steel Authority of India Limited (supra), is unsustainable in the eye of law, in view of the law laid down in National Mineral Development Corporation Limited (supra). 11. Furthermore, the reference made to Rules-64B and 64-C of Mineral Concessions Rules, 1960, which was framed on 25.09.2000, cannot be applied retrospectively. These Rules only clarify the position as it already existed and are intended to remove the doubts. 11. Furthermore, the reference made to Rules-64B and 64-C of Mineral Concessions Rules, 1960, which was framed on 25.09.2000, cannot be applied retrospectively. These Rules only clarify the position as it already existed and are intended to remove the doubts. The two Rules have been pressed into service only for the purpose of reinforcing the conclusion which has already been arrived at de hors the said amendment in the Rules. Taking into consideration the judgment of the apex Court in the case of National Mineral Development Corporation Limited (supra), recommendation was made by the Director of Mines to the State Government for dropping of the demand and in turn, the State has not taken any decision thereon. It is made clear that Rules 64-B and 64-C of the Mineral Concessions Rules provide that in case of processing of run-off mine is carried out within the leased area, then royalty shall be chargeable on the processed mineral removed from the leased area. Thus, not only did Entry 23 expressly state that royalty is chargeable on iron ore from on the components resulting from the beneficiation process, the new provision also puts the Petitioner-Company in the same basket. As such, the said Rules have come into force w.e.f. 25.09.2000 and, therefore, the same has no application to the case of the Petitioner-Company. Apart from the same, the Accountant General is not the final or decision making Authority in respect of the manner of levy of royalty on minerals extracted in terms of Section 9 of the MMDR Act. As such, the Audit Report prepared by the Accountant General cannot be the basis of a demand. The office of Accountant General is a part of the Indian Audit & Accounts Department under the Comptroller and Auditor General of India (C&AG). The C&AG is a Constitutional Authority appointed by the President of India to perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other Authority or Body, as may be prescribed by or under any law made by the Parliament. It includes performing Audit of revenue and expenditure of major revenue earning Departments of the Government in the mining areas as well. It includes performing Audit of revenue and expenditure of major revenue earning Departments of the Government in the mining areas as well. Therefore, the recommendations of the Accountant General have just been forwarded to the Petitioner-Company without an attempt being made to determine whether the demand is in fact made out in law. As such, the Report of the Accountant General only contained recommendations and the same is not binding force. 12. The Petitioner-Company has a legitimate expectation of being treated fairly by the Opposite Parties which is a Public Authority and obligated to do so. Such a legitimate expectation is an expectation of a benefit/relief that ordinarily flows from established practice. The term “established practice” refers to a regular, consistent predictable and certain conduct, process or activity of the decision making authority. Therefore, the demands which were raised having not been done in consonance with the provisions of law, vide various letters as mentioned above, cannot sustain in the eye of law. 13. If it is to be considered from other angle that royalty paid under Section 9 of the MMDR Act is essentially a tax, as held by the apex Court in the case of India Cement v. State of Tamil Nadu, AIR 1990 SC 85 , Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. Any demand for collection of royalty can be made only in consonance with the MMDR Act and not otherwise. The law of precedent is clear that a decision passed in the context to which it relates and is binding in similar facts and circumstances and not as a blanket rule. Since the Second Schedule to the MMDR Act must be read as a part and parcel of Section 9, the interpretation given in the decision cannot apply to the computation of every mineral. As such, the reliance placed on the decision of the apex Court in the case of Steel Authority of India Limited (supra) cannot apply to the present fact and circumstances. 14. In Tata Steel Ltd. v. Union of India, (2015) 6 SCC 193 , the apex Court in Paragraphs-59 and 60 observed as under:- “59. Iron ore (with which NMDC [National Mineral Development Corpn. 14. In Tata Steel Ltd. v. Union of India, (2015) 6 SCC 193 , the apex Court in Paragraphs-59 and 60 observed as under:- “59. Iron ore (with which NMDC [National Mineral Development Corpn. Ltd. v. State of M.P., (2004) 6 SCC 281 ] is concerned) falls in the same generic category for levy of royalty as dolomite, limestone and coal, namely, on a tonnage basis but there is a crucial difference between iron ore and coal (as also between dolomite, limestone and iron ore) . In the case of iron ore, beneficiation is necessary before it can be utilised. It has been observed in NMDC that: "28. ... in iron ore production the run-of-mine (ROM is in a very crude form. A lot of waste material called 'impurities' accompanies the iron ore. The ore has to be upgraded. Upgrading the ores is called `beneficiation'. That saves the cost of transportation. Different processes have been developed by science and technology and accepted and adopted in different iron ore projects for the purpose of beneficiation." It is for this reason, inter alia, that the levy of royalty on iron ore is postponed, as held in NMDC, to a post-beneficiation stage. 60. In the case of coal, beneficiation is not necessary since ROM coal can be used as it is straight from the pit-head. In the case of iron ore, as noticed in NMDC, waste material is removed from the extracted iron ore and through the beneficiation process the ore is upgraded. The removal of waste material obviously reduces the weight of the iron ore and that is why it saves the cost of transportation as observed in NMDC. However, in the case of coal apart from the fact that beneficiation is not necessary, if the leaseholder does in fact beneficiate the coal, the weight of the beneficiated coal is more than ROM coal as has been noted above. This would, therefore, increase the cost of transportation which is based on the weight of the coal. Under the circumstances, removal of beneficiated coal as against ROM coal might work to the disadvantage of the leaseholder. This would, therefore, increase the cost of transportation which is based on the weight of the coal. Under the circumstances, removal of beneficiated coal as against ROM coal might work to the disadvantage of the leaseholder. For this reason, no similarity can be found between coal and iron ore or between coal and dolomite and lime stone (apart from the fact that SAIL [State of Orissa v. SAIL, (1998) 6 SCC 476 ]did not deal with removal from the leased area but consumption within the leased area)”. 15. In view of the aforesaid facts and circumstances, there is no iota of doubt that the decision relied upon by the Opposite Parties on which impugned demands have been raised, is not applicable to the Petitioner-Company. As such, the reliance placed on the decision of the apex Court in the case of Steel Authority of India Limited (supra), cannot have any retrospective operation so as to raise the demand by the authority, as impugned in this writ petition. 16. Considering the case from all angles, this Court is of the considered view that the demands raised by the Authority vide letters dated 20.01.2004, 06.04.2004, 29.08.2008, 04.10.2008 and 15.04.2011 as at Annexures-1, 3, 7, 8 and 12, respectively, issued by the Deputy Director of Mines, Joda, Keonjhar, directing to pay a sum of Rs.6,93,99,308/- towards loss of royalty and Rs.7,07,44,492/- as interest thereon due to beneficiations of high grade lump iron ore for the period from October, 1994 to September, 2000, cannot sustain in the eye of law and the same are liable to be quashed and are hereby quashed. Consequentially, this Court directs the Opposite Parties to issue “Mining Dues Clearance Certificate” in favour of the Petitioner- Company without causing any further delay. 17. In the result, the writ petition stands allowed. However, there shall be no order as to costs. S.K. Mishra : I agree.