Sun Sep 15 13:59:48 UTC 2024: ## Supreme Court’s 35-Year Error: Royalty, Taxes, and Judicial Accountability
**New Delhi:** A 35-year-long saga of confusion and inconsistency surrounding the definition of mining royalty has highlighted the need for greater accountability and efficiency within the Indian Supreme Court.
In 1990, a seven-judge bench in the case of *India Cement vs State of Tamil Nadu* mistakenly ruled that mining royalty was not a tax, despite the court’s intention to declare it a tax. This error, later acknowledged by the Supreme Court as an “inadvertent error,” remained uncorrected for several years.
It was only in 2004, in the case of *State of West Bengal vs Kesoram Industries Ltd*, that a five-judge bench pointed out the discrepancy, but due to the previous ruling’s finality, it could not overturn it.
Finally, in 2011, the Supreme Court referred the issue to a nine-judge bench for a definitive decision. However, it took another 13 years, until 2024, for the court to deliver its verdict in the case of *Mineral Area Development Authority (MADA) vs Steel Authority of India*. This time, the court declared that royalty is indeed not a tax.
This long-drawn process has raised serious concerns about the Supreme Court’s internal mechanisms for error correction and accountability. Questions have been raised about the lack of a robust system for reviewing and proofreading judgments. Furthermore, the court’s delay in addressing the evident error and its 13-year wait to deliver a verdict after the reference to a larger bench have been criticized.
This case serves as a stark reminder of the potential for judicial errors to have significant and long-lasting impacts on policy, law, and the economy. The confusion surrounding the definition of mining royalty has led to inconsistencies in tax policies across different states, affecting businesses and consumers alike.
The Supreme Court’s decision to retrospectively apply the MADA ruling from 2005 has also created further uncertainties. States are now authorized to levy taxes on mining companies, potentially leading to financial strains on several companies.
The entire incident raises crucial questions about the responsibility of the Supreme Court in upholding its own standards of accuracy and efficiency. While the court has made strides in using technology for real-time translations, the need for basic diligence in ensuring the accuracy of its judgments remains paramount.
The authors, experts from Pune International Centre and CUTS International, argue that the Supreme Court must take active steps to address these concerns, ensuring that its decisions are not only just but also free from avoidable errors.
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