Simplex Infrastructures Limited vs. The State Of Assam And 5 Ors

Held

The Court held that the petitioner's contention that all procurement was duly covered by valid permits or otherwise lawfully sourced raises disputed questions of fact. These require examination of voluminous records, source-wise reconciliation of quantities, scrutiny of permits, transit passes, and royalty receipts, and technical verification of project execution data. The Court, exercising writ jurisdiction under Article 226, is concerned with the decision-making process, not re-appreciation of disputed facts. The exercise undertaken by the respondent authorities, based on materials collected during a prolonged verification and inspection process, was not ex facie without jurisdiction. The invocation of Rule 64 of the Rules of 2013 was also found to be not ex facie without jurisdiction, as the respondents concluded extraction was without valid mineral concession based on their assessment. The contractual framework clearly placed the obligation on the contractor to obtain permits and bear statutory dues. The cited case laws were distinguished as they involved recovery without statutory determination or proper authority, unlike the present case which is founded on a structured statutory exercise under the Rules of 2013 involving notice, verification, inspection, and assessment. Therefore, the impugned communications were not found to suffer from illegality, arbitrariness, or want of jurisdiction.

Facts

Simplex Infrastructures Limited (the petitioner) was awarded an EPC contract on April 12, 2017, for the four-laning of a section of NH-52 in Assam. During project execution, the petitioner required substantial quantities of minor minerals like earth, sand, and boulders. The petitioner claims these were procured legally from authorized sources within Assam, Arunachal Pradesh, river beds, and by re-utilizing excavated earth. The State of Assam, through various communications between July 2022 and March 2023, issued demand notices for forest royalty, price of minor minerals, GST, income tax, and penalty, initially amounting to Rs. 12,97,46,245/- and escalating to Rs. 40,04,04,926/-. The contract was later foreclosed by mutual agreement. The petitioner challenged these demand and recovery communications.

Key Issues

1. Whether the demand and recovery communications issued by the State authorities for forest royalty, price of minor minerals, GST, income tax, and penalty are arbitrary, illegal, and without jurisdiction, particularly concerning the petitioner's contention that all minor mineral procurement was in compliance with the Mines and Minerals (Development and Regulation) Act, 1957, and the Assam Minor Mineral Concession Rules, 2013? (Question of law and mixed fact and law, turning on the interpretation and application of the Act of 1957 and Rules of 2013). Petitioner's arguments: The petitioner contended that all procurement and utilization of minor minerals were strictly in compliance with the Act of 1957, the Rules of 2013, and other applicable statutory provisions. They argued that royalty was duly deposited in advance with necessary permits and transit passes wherever payable. They relied on case law such as Md. Muslim Ali and Dipayan Paul, asserting that recovery without clear statutory determination and proper contractual authority or prior adjudication is impermissible, and unilateral deductions from bills without due process are not allowed. They also cited Promoters & Builders Association of Pune and TATA Projects Ltd., emphasizing the need for precise determination of end-use of excavated earth. Revenue/State's arguments: The respondents, based on their enquiry, recorded a finding that valid documentation existed only for part quantities of minor minerals, with the remaining quantities being unsupported by statutory permits, thus falling under "unauthorised extraction" under Rule 63 of the Rules of 2013. They argued that the invocation of Rule 64 of the Rules of 2013 was justified as extraction was found to be without valid mineral concession. They also pointed to the EPC Agreement, which casts the obligation on the contractor to obtain all applicable permits and bear all statutory dues, and an indemnity clause protecting NHIDCL.