The Government informed this in an affidavit filed before the apex court on Monday.

"The Government is not at all averse to the mode of going for competitive auction of the mining leases in Goa, subject to law permitting the same," mines secretary R K Verma told the court.

The Government has submitted the affidavit as a rejoinder to a petition filed by NGO Goa Foundation against illegal mining in the coastal State.

The NGO has demanded total ban on mining activities in Goa and implementation of the Justice M B Shah Commission's report on illegal mining.

In an interim order on the petition in October last year, the SC halted mining operations in Goa and formed a committee to investigate illegalities in operation of iron-ore and manganese mines in the State.

"As a matter of principle, the State Government is of the opinion that distribution of natural resources of any kind must be always by auction or tender which can earn highest revenue," the affidavit noted.

The State Government has sought dismissal of the NGO's petition, stating they are in a position to take action against all illegalities in the mining sector.

The Government has assured that any one found guilty of committing irregularities would be punished and leases of erring mining companies would be cancelled.

"Appropriate penal action would be taken against such persons and also mining companies, whose leases would be cancelled or revoked if found guilty of irregularities," according to the affidavit.

The State earns Rs. 1,000-crore revenue per year from mining, a sector still governed by decades-old rules as the existing leases were given to the owners when the Portuguese ruled over Goa, a top exporter of iron ore.