ORDER : K. LAKSHMAN, J. Heard Mr. S. Ravi, learned Senior Counsel representing M/s. R.S. Associates, learned counsel for the petitioners, learned Government Pleader for Mines and Geology appearing on behalf of respondent Nos.1 to 3 and Mr. V. Narasimha Goud, learned Standing Counsel for HMDA appearing on behalf of respondent No.4. 2. CASE OF THE PETITIONERS i) Petitioner No.2 is the absolute owner and possessor of the land admeasuring Acs.4.07 guntas in Survey No.88/AA of Kokapet Village, Gandipet Mandal, Rangareddy District, which is hereinafter referred to as ‘subject property’. ii) He has entered into a registered Development Agreement- cum-General Power of Attorney (for short ‘DAGPA’) bearing document No.2659 of 2018, dated 21.03.2018 with petitioner No.1 for development of Commercial Building over the subject property. The construction was going on. iii) Respondent No.3 has issued a show-cause notice dated 12.03.2024 in the name of M/s. GAR Corporation Private Limited stating that the said Company excavated and transported 1,41,120 Metric Tons (MT) of Gravel and 60,480 MT of Rough Stone unauthorizedly. Fifteen (15) days time was granted to submit explanation as to why seigniorage fee along with ten (10) times penalty should not be imposed. iv) According to the petitioners, respondent No.3 had issued the said show-cause notice in the name of M/s. GAR Corporation Private Limited. In fact, the said Company is nothing to do with the construction. However, petitioner No.1 - M/s. Gavva AR Real LLP, is the sister concern of the aforesaid Corporation. Therefore, petitioner No.1 had submitted a detailed reply dated 27.03.2024 contending that the petitioners have already made payments towards Environment Impact Fee @ Rs.3/- per square feet of built up area, to respondent No.4 in terms of G.O.Ms.No.34, dated 17.06.2015 and G.O.Ms.No.8, dated 24.02.2016. v) Without considering the same, respondent No.3 has issued the impugned demand notice dated 18.04.2024 demanding an amount of Rs.67,53,600/- (Rupees Sixty Seven Lakhs Fifty Three Thousand and Six Hundred) towards normal seigniorage fee and ten (10) times of penalty. Challenging the said notice, the petitioners filed the present writ petition contending as follows: (a) There is no consideration of the explanation dated 27.03.2024 submitted by petitioner No.1 to the show-cause notice dated 12.03.2024. (b)Though petitioner No.1 specifically mentioned the details of payment including challan number, date and amount in the explanation, the same were not considered by respondent No.3. Challenging the said notice, the petitioners filed the present writ petition contending as follows: (a) There is no consideration of the explanation dated 27.03.2024 submitted by petitioner No.1 to the show-cause notice dated 12.03.2024. (b)Though petitioner No.1 specifically mentioned the details of payment including challan number, date and amount in the explanation, the same were not considered by respondent No.3. (c) The alleged site inspection by the Technical Staff of respondent No.3 is behind back of the petitioner. (d)Respondent No.3 has not furnished copy of the Inspection Report to the petitioners herein. (e)Entire action is in violation of the Telangana State Minor Mineral Concession Rules , 1996 (for short ‘TSMMC Rules’), more particularly, Rule - 26. As per the said Rules, only Nominated Officer has to conduct inspection. (f) In the show-cause notice dated 12.03.2024, there is mention about the inspection conducted by the Technical Staff. (g)The principal activity of petitioner No.1 is to execute civil works and incidentally if any minor mineral was unearthed during the course of construction, it was re-used in site and not transported anywhere outside the site for any commercial purpose. The said aspects were specifically mentioned in the reply submitted by petitioner No.1. The same was not considered by respondent No.3 in the impugned demand notice. (h)The petitioners also placed reliance on the principle laid down by the High Court of Andhra Pradesh in Prasad and Company Project Works Limited v. State of Andhra Pradesh , [MANU/AP/0200/2020] , The Indian Hume Pipe Co. Ltd. v. State of Andhra Pradesh , [ 2013 (4) ALD 490 ] rendered by the erstwhile High Court of Andhra Pradesh at Hyderabad, Promoters and Builders Association of Pune v. State of Maharashtra , [ (2015) 12 SCC 736 ] rendered by the Hon’ble Supreme Court, Paranjape Schemes (Construction) Ltd., v. The State of Maharashtra , [2022 (1) ABR 621] rendered by the High Court of Bombay and M/s. LRhaks Steels Sand Pvt. Ltd. v. State of Telangana , [W.P. No.2351 of 2023, decided on 19.02.2025] and M/s. Kisan Stone Crusher v. The State of Telangana , [W.P. No.25814 of 2023, decided on 25.02.2025] rendered by Co-Ordinate Benchs of this Court. 3. CONTENTIONS OF RESPONDENT Nos.2 & 3 i) Respondent No.3 filed counter contending that the aforesaid two G.Os. are inapplicable. The technical staff of its office inspected the site on 05.03.2024. 3. CONTENTIONS OF RESPONDENT Nos.2 & 3 i) Respondent No.3 filed counter contending that the aforesaid two G.Os. are inapplicable. The technical staff of its office inspected the site on 05.03.2024. As per the field observations, petitioner No.1 Company has excavated and transported the quantities of Gravel and rough stone outside the site/area. The details of the said quantity are specifically mentioned. Therefore, they have issued the aforesaid show-cause notice dated 12.03.2024 granting fifteen (15) days time to the petitioners herein. Petitioner No.1 has submitted explanation, but it has not submitted any proof along with the said explanation. The said explanation submitted by petitioner No.1 was not satisfactory. Therefore, respondent No.3 has issued impugned demand notice dated 18.04.2024. There is no irregularity. ii) It is further contended that the petitioners have an alternative remedy of filing an appeal/revision in terms of Rules - 35 and 35A of the TSMMC Rules. Therefore, the present writ petition is not maintainable. 4. REPLY OF THE PETITIONERS i) The petitioners filed rejoinder to the said reply contending that the entire action of respondent No.3 is in violation of the procedure laid down under the TSMMC Rules and also the principle laid down in the aforesaid judgments and also in M/s. GSR Stone Crushers v. The State of A.P. , W.P. No.8390 of 2022 & batch, decided on 30.09.2022 rendered by the High Court of Andhra Pradesh. ii) However, during the course of hearing, it is brought to the notice of this Court that the State has already preferred an Intra-Court Appeals challenging the common order passed by High Court of Andhra Pradesh in M/s. GSR Stone Crushers and a Division Bench of High Court of Andhra Pradesh reserved the matter. 5. ANALYSIS AND FINDINGS OF THE COURT i) In the light of the aforesaid rival submissions, it is relevant to note that the erstwhile High Court of Andhra Pradesh at Hyderabad in The Indian Hume Pipe Co. Ltd. observed in paragraph Nos.8 and 9 thus: “8. The word "mining" is not precisely defined under any enactment Section 3(d) of Mines and Minerals (Regulation and Development) Act , defines the expression, "mining operations", "as any operation undertaken for the purpose of winning any mineral". Ltd. observed in paragraph Nos.8 and 9 thus: “8. The word "mining" is not precisely defined under any enactment Section 3(d) of Mines and Minerals (Regulation and Development) Act , defines the expression, "mining operations", "as any operation undertaken for the purpose of winning any mineral". Beyond that, what constitutes mining is not mentioned, either under that enactment or under the Mines Act As held by the Supreme Court in Bhagwan Dass v. State of UP., (1976) 3 SCC 784 , any mineral that exists upon a private or Government land would vest in the State, and mining operation can be only with the specific permission accorded under a lease or licence. 9. However, if one takes into account the provisions of the relevant enactments and the rules made thereunder, it becomes clear that the necessity or obligation to pay the seigniorage fee had arisen, if only the mineral is removed from any particular area. Mere digging of earth for a purpose, not connected with the mining activity cannot result in obligation to pay the seigniorage fee or dead rent." ii) In Promoters and Builders Association of Pune, the said principle was also reiterated. iii) Placing reliance on the said judgments and also on examination of the facts therein i.e., activity of excavation of soil undertaken by the writ petitioner is not a mining activity, the High Court of Andhra Pradesh in Prasad and Company Project Works Limited held that levying seigniorage fee by the Mining Department against the writ petitioner therein is illegal. iv) In Paranjape Schemes (Construction) Ltd., a Division Bench of Bombay High Court held that an excavation undertaken to lay the foundation of a building would not, ordinarily, carry the intention to use the excavated earth for the purpose of filling up or levelling. In the said case, the allegation against the writ petitioner was that the petitioner excavated minor minerals using the same for the purpose of filling up and leveling of earth is inbuilt in the course of building operations. Therefore, the petitioner therein contended that the activity so undertaken is not a mining activity. On consideration of the said aspects, the Division Bench of Bombay High Court held that there is no need of payment of seigniorage fee. Therefore, the petitioner therein contended that the activity so undertaken is not a mining activity. On consideration of the said aspects, the Division Bench of Bombay High Court held that there is no need of payment of seigniorage fee. v) In M/s. LRhaks Steels Sand Pvt. Ltd. a Co-ordinate Bench of this Court, on examination of the facts therein, held that the impugned demand notice therein was issued validly and, therefore, the petitioner therein has to avail alternative remedy of either preferring appeal or filing revision in terms of Rules - 35 and 35A of the TSMMC Rules. vi) It is also apt to note that in M/s. GSR Stone Crushers , the High Court of Andhra Pradesh held that the Assistant Director of mines or any other authority of the State cannot determine the culpability of the person said to be in violation of the MMDR Act or the Concession rules or levy a penalty and it is only a Court of competent jurisdiction which can go into these questions and levy penalties set out under Rule 26 of the Concession Rules or under any of the other provisions of the MMDR Act or the Concession Rules. vii) In M/s. Kisan Stone Crusher , another Co-ordinate Bench of this Court took a contra view to that of High Court of Andhra Pradesh and held that the State is having power to levy penalty under Rule - 26 of the TSMMC Rules, and when the power is sourced through a Statute itself, the petitioner therein cannot contend that penalty shall be levied only under Section - 21 of the MMDR Act, 1957. With the said findings, the said Bench dismissed the writ petition filed by the writ petitioner challenging the impugned notice issued by the Assistant Director of Mines and Geology demanding to pay an amount of Rs.9,43,79,164 including normal seigniorage fee of Rs.85,79,924/- along with 10 times penalty of Rs.8,57,99,240/-. viii) It is apt to note that Rule - 5 of the TSMMC Rules deals with ‘quarrying to be under lease or permit’, while Rule - 26 deals with ‘penalty for unauthorized quarrying’. The same are extracted below: “ 5. viii) It is apt to note that Rule - 5 of the TSMMC Rules deals with ‘quarrying to be under lease or permit’, while Rule - 26 deals with ‘penalty for unauthorized quarrying’. The same are extracted below: “ 5. Quarrying to be under lease or permit :– No person shall undertake quarrying of any minor mineral in any area, except under and in accordance with the terms and conditions of a quarry lease or a permit granted under these rules : Provided that the Government shall have power to grant exemption from obtaining a lease or permit for quarrying any minor mineral in any area in the case of any category of persons, subject to such conditions as may be specified in the order granting such exemption. 26. Penalty for unauthorised quarrying: – (1) If any person carries on quarrying operations or transports minor minerals in contravention of these rules, he shall be liable to pay as penalty, such enhanced seigniorage fee together with assessments as may be imposed by an Officer nominated by the Director of Mines and Geology. (2) Whenever any person raises or transports minor minerals without any lawful authority, such minerals may be seized by an Officer nominated by the Director of Mines and Geology in this behalf in addition to the imposition of the penalty under sub-rule (1): Provided that in no case, the penalty shall exceed ten times the normal seigniorage fee and the lease or permit already granted may, at the discretion of the Deputy Director, be liable to be terminated or cancelled. (3)(i) For the purpose of ascertaining the position of payment of Mineral Revenue due to the Government or for any other purpose under these rules, the person authorised under sub-rule (2) may– (a) enter and inspect any premises; (b) survey and take measurements; (c) weigh, measure or take measurements of stocks of minerals; (d) examine any document, book, register or record in the possession or power of any person having the control of, or connected with any mineral including the processed mineral and place marks of identification thereon and take extracts from, or make copies of such document, book, register or record; and (e) order the production of any such document, book, register, record as is referred in Clause (d). (ii) If no documentary proof is produced in token of having paid the mineral revenue due to the Government by any person who used or consumed or in possession of any mineral including the processed mineral, he shall notwithstanding anything contained in sub-rule (1) be liable to pay five times of the normal seigniorage fee as penalty in addition to normal seigniorage fee leviable under the rules. Explanation:– It shall be competent to the officer nominated by the Director of Mines and Geology to determine the question whether quarrying operation or transportation of minerals are carried or not within the meaning of this rule. (4) The applicant/applicant company convicted for an offence relating to unauthorised mining/quarrying of minor minerals shall be debarred/disqualified for getting new Quarry Lease or renewal of the existing Quarry Lease for a period of ten (10) years.” ix) In the light of the aforesaid principle laid down, coming to the facts of the case on hand, admittedly, respondent No.3 has issued show-cause notice dated 12.03.2024 placing reliance on the technical staff report 12.03.2024. In the said show-cause notice, respondent No.3 has specifically mentioned that the technical staff of his office has inspected the ongoing construction project located in Survey No.88/P of Kokapet Village, Gandipet Mandal, Rangareddy District. They have reported that on the date of inspection, security person of the company was present at the site. The said security person gave phone number of the Liasioning Officer and over a telephonic conversation, Mr. Suresh informed that they are going to construct commercial complex in the said area. At present, the construction work stopped due to commercial lease market problem. x) It is further stated that as per physical observation, the cellar work has been completed and constructed 2 cellar slabs. The Supervisor, office of the Deputy Director, Mines & Geology, Hyderabad has measured the worked pit having average measurements i.e., 1) 160Mts X 80Mts X 10.50Mts covering a quantity of 1,34,400cbm. As per physical observation from the workings, it is observed that the proportionate of gravel and rock in the subject area is 70%:30% i.e., 94,080M 3 (1,41,120MT) and 40,320M 3 (60,480MT) respectively. xi) In the said show-cause notice, it is also stated that as per the field observations, the company excavated and transported the quantities of gravel and rock outside the site/area. xi) In the said show-cause notice, it is also stated that as per the field observations, the company excavated and transported the quantities of gravel and rock outside the site/area. Thus, respondent No.3 has issued the said show-cause notice basing on the field report. xii) Petitioner No.1 has submitted reply dated 27.03.2024 to the said show-cause notice specifically contending that it has paid environment impact fee in terms of G.O.Ms.No.34, dated 17.06.2015 and G.O.Ms.No.8, dated 24.02.2016. The details of the said payment including date, challan number and amount are also specifically mentioned in a tabular form in paragraph No.3 of the said reply. It is also relevant to mention that copies of the said challans were enclosed to the said reply as Annexure-I. It is also specifically contended by the petitioners that issuance of show-cause notice is illegal and in violation of the principle laid down by the High Court of Andhra Pradesh at Hyderabad in The Indian Hume Pipe Co. Ltd. xiii) In the impugned demand notice, dated 18.04.2024, respondent No.3 has stated that the reply submitted by petitioner No.1 is not satisfactory and it failed to submit documentary evidence of having paid seigniorage fee under Rule - 26 (2) of the TSMMC Rules for the quantities of minor mineral (gravel) excavated and transported much larger quantities of minor minerals than the permitted quantities outside their premises. Thus, the aforesaid observation of respondent No.3 in the impugned demand notice that petitioner No.1 failed to submit documentary evidence is factually incorrect. Petitioner No.1 has submitted a detailed reply dated 27.03.2024 to the show-cause notice dated 12.03.2024. It has also placed reliance on the principle laid down by the High Court of Andhra Pradesh at Hyderabad in The Indian Hume Pipe Co. Ltd. Therefore, respondent No.3 has to consider the said aspects and pass orders. There is no consideration of the said aspects by respondent No.3 in the impugned demand notice. xiv) As discussed above, respondent No.3 has filed copy of the inspection report dated 05.03.2024 along with counter affidavit. There is no reference to the said inspection report in the show-cause notice dated 12.03.2024. There is reference to the technical staff report dated 12.03.2024 in the said show-cause notice. However, now the petitioners have an opportunity of going through the inspection report dated 05.03.2024. There is no reference to the said inspection report in the show-cause notice dated 12.03.2024. There is reference to the technical staff report dated 12.03.2024 in the said show-cause notice. However, now the petitioners have an opportunity of going through the inspection report dated 05.03.2024. xv) Perusal of the said inspection report filed along with counter would reveal that there is no date. In the stamp put on it, the date is mentioned as 12.03.2024. In the said inspection report also, there is mention with regard to field inspection. Date is not mentioned. xvi) It is also relevant to note that whether the petitioners excavated and transported the quantities of gravel and rock outside the site/area is a factual aspect which respondent No.3 has to consider. The petitioners are disputing about excavation and transportation of the said quantities of gravel and rock outside the site/area which is a factual aspect and this Court cannot consider the same in a writ petition filed under Article - 226 of the Constitution of India. Respondent No.3 should have furnished a copy of the technical staff report dated 12.03.2024 or inspection report dated 12.03.2024 (wrongly mentioned as 05.03.2024) to the petitioners. On receipt of show-cause notice dated 12.03.2024, the petitioners should have sought copy of the said report. Without seeking such report, they have submitted reply dated 27.03.2024 contending that the said inspection was behind their back. xvii) It is also relevant to note that on the representations submitted by the Telangana Real Estate Developers Association (TREDA), Confederation of Real Estate Developers Association (CREDAI) and various Builder Associations on the environment impact fee payable by the builders with built-up area more than 10,000 square fee @ Rs.3/- per square feet before approval of the building plan by the competent authority, the Government has issued the aforesaid G.O.Ms.Nos.8 and 34. The environment impact fee is payable for the entire built-up area and it includes the area meant for parking and other allied services, which includes pathway. Therefore, according to respondent No.3, the said GOs., are not applicable for excavation and transportation of minerals. It is a factual aspect which this Court cannot consider in a writ petition filed under Article - 226 of the Constitution of India. Therefore, according to respondent No.3, the said GOs., are not applicable for excavation and transportation of minerals. It is a factual aspect which this Court cannot consider in a writ petition filed under Article - 226 of the Constitution of India. xviii) In the light of the aforesaid discussion, this Court is of the considered view that respondent No.3 did not consider the explanation/reply dated 27.03.2024 submitted by petitioner No.1 to the show-cause notice dated 12.03.2024, details of payment of environment impact fee mentioned by it including challan dates, number and amount. Copy of the technical staff report dated 12.03.2024 was not furnished to the petitioners. Without seeking copy of the same, petitioner No.1 had submitted explanation to the said show-cause notice. Therefore, this Court is of the considered view that the impugned demand notice dated 18.04.2024 is not on consideration of the said aspect. Thus, there is violation of principles of natural justice by respondent No.3 while issuing demand impugned notice dated 18.04.2024. Therefore, the contention of respondent No.3 that the present writ petition is not maintainable in view of availability of alternative and efficacious remedy is unsustainable. 6. CONCLUSION i) Therefore, without expressing any opinion on merits, the impugned demand notice dated 18.04.2024 of respondent No.3 is set aside and the matter is remanded back to respondent No.3 with a direction to consider the explanation dated 27.03.2024 submitted by petitioner No.1 and pass appropriate orders in accordance with law. Respondent No.3 shall consider the principle laid down in the aforesaid judgments and also the aforesaid G.Os. Liberty is granted to the petitioners to submit additional/further explanation, if any, to respondent No.3. As stated above, respondent No.3 has filed copy of inspection report dated 12.03.2024 along with counter and, therefore, liberty is granted to the petitioners to submit additional/further explanation to the show-cause notice dated 12.03.2024 along with supporting documents. Respondent No.3 shall consider the same. Liberty is also granted to the petitioners to contend that respondent No.3 cannot initiate action and levy seigniorage fee, and it is for the Courts to consider. Liberty is also granted to the petitioners and respondent No.3 to place reliance on the judgment to be delivered by a Division Bench of the High Court of Andhra Pradesh in writ appeals filed challenging the common order in M/s. GSR Stone Crushers and batch. Liberty is also granted to the petitioners and respondent No.3 to place reliance on the judgment to be delivered by a Division Bench of the High Court of Andhra Pradesh in writ appeals filed challenging the common order in M/s. GSR Stone Crushers and batch. Respondent No.3 shall consider the said aspects and pass a reasoned order. However, he shall complete the entire exercise within four (04) weeks from the date of receipt of copy of this order. ii) This writ petition is accordingly disposed of. In the circumstances of the case, there shall be no order as to costs. As a sequel thereto, miscellaneous petitions, if any, pending inthis writ petition shall stand closed.