The Karnataka State government has filed an Interlocutory Application (IA) before the Supreme Court pleading direction to the Director-General of Survey of India to identify and demarcate the inter-State border between Karnataka and Andhra Pradesh.

In its application to the apex court on December 10, 2012, the State government submitted that minerals extracted by category A and B mines be put for e-auction through a monitoring committee constituted by the apex court considering the investment made by respective leases under these two categories.

The mining leases, where there were least or no irregularities, were classified by the SC-appointed Central Empowered Committee under A category and those with some irregularities under B category. Mines with maximum irregularities fall under category C.

The government said 50 per cent of the sale proceeds could be reimbursed to A and B category leases and income tax on total sale proceeds and labour cess be paid by the lessees.

Of the remaining amount, 15 per cent of the sale proceeds would go to Special Purpose Vehicle (SPV), for implementation of Comprehensive Environment Plans for the Mining Impact Zone (CEPMIZ) and the rest would become part of the State exchequer.

The government said it would be committed to play the role of a catalyst and facilitator to maintain the State as the country’s preferred investment destination and the Global Investors’ Meet 2012 was a step in that direction.

The government stated that the funds of the SPV should be routed through the Consolidated Fund of the State under the overall control of the State legislature. The assessment of the quantity of minerals extracted illegally from the mining pits outside the leased areas may be extended to all mining leases.

According to the IA, the reason for the government to make such an appeal is that it wants to recover the actual gains made “wrongfully” by the lessees through lost tax revenue.

Appealing for transfer of cancelled mining leases of category C to Mysore Minerals Ltd., the government said 50 per cent of the joint venture proceeds may be transferred to MML and the rest should go to the SPV.

Noting that the mechanism proposed may be in place to fix the benchmark price, for the e-auction of the iron ore produced by the lessees, the government sought periodical review by the CEC and fixation of production limits accordingly as per the Rehabilitation and Reclamation plans, being implemented.