Constitutional Distribution of Legislative Powers over Minerals

The Constitution distributes legislative power over minerals through Article 246 and the Seventh Schedule. It treats mineral regulation, taxation of mineral rights, and special matters such as mineral oils and mine safety as distinct legislative fields. Therefore, regulatory control over minerals does not by itself confer a power to tax mineral rights.

Regulation and development of minerals

Legislative competence follows the fields allocated by Article 246 among the Union, State and Concurrent Lists.

• State List Entry 23 assigns regulation of mines and mineral development to the states, subject to Union List provisions concerning Union control.
• Union List Entry 54 empowers Parliament to regulate mines and mineral development to the extent that a parliamentary law declares Union control expedient in the public interest.
• The declaration in Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957 brings mineral regulation under Union control to its specified extent; states consequently act subject to the central statutory framework and delegated powers.

Special mineral-related Union fields

• Union List Entry 53 covers the regulation and development of oilfields and mineral oil resources, petroleum and petroleum products, and other inflammable substances declared by Parliament.
• Union List Entry 55 assigns Parliament the regulation of labour and safety in mines and oilfields.

Taxation of mineral rights and mineral-bearing land

Taxation is a separate legislative field from mineral regulation. State List Entry 50 authorises states to levy taxes on mineral rights, subject to limitations imposed by Parliament through a law relating to mineral development.

• In Mineral Area Development Authority v. Steel Authority of India, 2024, the Supreme Court held that royalty is not a tax and affirmed state competence under Entry 50, subject to parliamentary limitations.
• State List Entry 49, which covers taxes on lands and buildings, can support taxation of mineral-bearing land; the value of minerals may be used as a measure of such a land tax.