A nine-judge Supreme Court bench reserved its decision on applying last week's judgment on states' power to tax mines and minerals rights retrospectively or prospectively. The Solicitor General Tushar Mehta warning of potential economic impact amounting to Rs 70,000-80,000 crore on public sector undertakings. He argued against mineral-rich states seeking refunds, highlighting the broad impact on various sectors and the potential burden on consumers if payments are made retrospectively. View More

A nine-judge bench of the Supreme Court on Wednesday reserved its decision on whether its last week's judgment upholding the power of states to tax mines and minerals rights would be applied retrospectively or prospectively. ET Guide to ITRMissed ITR deadline: These people won't pay penaltyHow to file ITR after July 31 deadline?What is the penalty for filing ITR after the July 31 deadline Solicitor General Tushar Mehta told a bench led by Chief Justice DY Chandrachud that any order giving retrospective effect would have a huge impact on the economy and would put a potential liability of Rs 70,000-80,000 crore on public sector undertakings. Opposing the stand of mineral-rich states seeking refund of the royalty levied on mines and mineral-bearing land since 1989, he argued that minerals were being used in every core sector, including in the manufacture of iron to steel, and thus will impact the economy of the nation critical to the infrastructure sector. And the burden of retrospective implementation will eventually go to the common man as the industry will pass on the financial burden to them. "Can this burden of payment be shifted onto the new consumers? This will be acutely felt in the electricity sector as well. There are several domestic and international contracts based on the law prevailing at that time," he said, adding that the payment, if made retrospectively, will have a "multipolar" impact and will open the floodgates of new litigations. MORE STORIES FOR YOU✕« Back to recommendation storiesI don't want to see these stories becauseThey are not relevant to meThey disrupt the reading flowOthersSUBMIT The mines were leased out in public auctions based on the 2015 amendments made to the Mines and Minerals (Development and Regulations) Act, 1957. The bids were formulated according to existing rates then, and now retrospective evaluation of tax would lead to a heavy load which may crush these sectors, he said. The Solicitor General then went on to suggest that neither any state government should demand any levy retrospectively nor the private parties or PSUs would seek any refund. Several mining operators supported the Centre's position on refund of royalty to the mineral-bearing states. On July 25, the court in a majority 8:1 judgement upheld state governments' power to levy tax on mineral rights and mineral-bearing lands. (You can now subscribe to our Economic Times WhatsApp channel) (You can now subscribe to our Economic Times WhatsApp channel)