A CRITICAL ANALYSIS OF RETROSPECTIVE TAXATION IN MINING INDUSTRY

AUTHOR – GARVIT MAHENDRA, STUDENT AT CHRIST UNIVERSITY

BEST CITATION – GARVIT MAHENDRA, A CRITICAL ANALYSIS OF RETROSPECTIVE TAXATION IN MINING INDUSTRY, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (1) OF 2026, PG.754-760, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT

This paper examines the Supreme Court ruling of 2024 that allowed Indian states to impose and collect taxes from back date i.e retrospectively (royalty and cess) from April 2005 on mining activities. It analyzes the legal and constitutional framework (Income Tax Act, MMDR Act 1957, and fiscal federalism entries) governing such taxes, focusing on the Mineral Area Development Authority v. SAIL case which resolved long-standing disputes over royalty as tax. The economic impact on investors and companies is assessed, including investor sentiment, financial strain on mining firms, and ripple effects on allied sectors. We find that, while the decision reinforces state taxing powers and federal fiscal autonomy, it imposes massive, backdated liabilities (₹1.5–2 lakh crore) on mining companies, threatening investment and growth.

Keywords:

Retrospective taxation; mining royalty; India; income tax; MMDR Act 1957; fiscal federalism; investor sentiment.