Tata Steel has filed a curative petition before the Supreme Court in connection with the apex court judgment that empowered states to levy tax on mineral rights.

The move follows rejection of a batch of review petition filed by multiple entities including the central government after a constitutional bench of the SC legitimised state’s power to tax minerals.

On July 25, the bench ruled that the Mines and Minerals (Development & Regulation) Act, 1957, will not denude the states of the power to levy tax on mineral rights.

This was followed by an order dated August 14, 2024, of the constitutional bench clarifying that the July order would be applied retrospectively and directed mining companies to settle unpaid taxes in instalments over 12 years starting in 2026.

While none of the mineral bearing states have imposed the tax post the SC judgment as yet, companies who have legacy mines such as Coal India, SAIL and Tata Steel may face huge tax burden if states do so.

A curative petition is a legal remedy that allows the Supreme Court to reconsider a final judgment in exceptional circumstances. It can be filed only after a review petition is rejected.

Tata Steel was one of the entities who had filed the review petition. The company is praying the SC to reconsider its July judgment and August order in the curative petition, the final legal remedy available to challenge a judgment.

There has been a clamour among industry that the Centre suitably modify the MMDR Act which has paved the way for the auction of mineral reserve by prospective bidders by paying top dollar in the form of royalties. For instance, the state of Odisha’s annual income from royalty reached close to ₹50,000 crores.

The constitution bench held royalty is a payment from miners to landowners and does not have the characteristics of a tax. However, one of the members of the bench had said royalty is akin to a tax because it is compulsory.

In 2004, Tata Steel had challenged imposition of tax by Odisha on minerals underthe provisions of the Orissa Rural Infrastructure and Socio-Economic Development Act, 2004.

The Odisha High Court had quashed the demands of ₹129 crore raised by Odisha as per the Act. The state of Odisha then appealed the order before SC which referred the matter of legislative authority of states to tax minerals to a constitution bench.