M/S Rajpal Singh vs. State Of Rajasthan

Held

The Court held that the writ petition lacked substance and was dismissed. Regarding the issue of GST leviability on mining royalty/dead rent and DMFT/RSMET contributions, the Court noted that the Assessing Officer had considered the petitioner's pleas, including the pendency of a matter before the Supreme Court. The Court stated that the effect of the "Mineral Area Development Authority (MADA)" judgment could be taken up in a statutory appeal, if filed. Concerning the procedural aspect of personal hearing, the Court observed that the petitioner had not explicitly stated in the writ petition that the statements recorded in the order dated April 10, 2023, were not their stand. The Court found it unbelievable that the Assessing Officer would note defenses without a reply. Furthermore, the petitioner failed to demonstrate any prejudice caused by the alleged denial of a personal hearing. The Court also noted that Section 75(4) of the RGST Act, 2017, does not necessarily mandate a personal hearing in all cases. The Court concluded that no writ should be issued in futility, referencing "S.L. Kapoor v. Jagmohan & Ors.".

Facts

The petitioner, M/s Rajpal Singh, challenged an order dated April 10, 2023, and GST Circular No. 20 of 2021. The petitioner contended that GST is not leviable on mining royalty/dead rent for mineral exploration, nor on contributions to the District Minerals Funds Trust/Rajasthan State Mineral Exploration Trust. The petitioner argued that the order dated April 10, 2023, was illegal, and the levy of GST on these amounts was ultra-vires the Constitution and the Rajasthan Goods and Services Tax Act, 2017 (RGST Act, 2017). The petitioner also raised grounds that a show cause notice was not served and that a personal hearing was not afforded before the order was passed.

Key Issues

1. Whether the order dated April 10, 2023, is illegal and ultra-vires to the Constitution of India and the RGST Act, 2017, due to the levy of GST on mining royalty/dead rent and contributions to DMFT/RSMET? (Question of law) 2. Whether the petitioner was denied a proper opportunity of hearing as mandated by Section 75(4) of the RGST Act, 2017, prior to the passing of the order dated April 10, 2023? (Question of mixed law and fact) Petitioner's arguments: The petitioner argued that GST is not leviable on mining royalty/dead rent and DMFT/RSMET contributions, citing the Supreme Court judgment in "Mineral Area Development Authority (MADA) v. Steel Authority of India & Ors." (2024 SCC Online SC 1796) to support the illegality of the demand notice. They also contended that Section 75(4) of the RGST Act, 2017, mandates a personal hearing, which was not provided. Furthermore, they claimed the show cause notice was not served. Respondents' arguments: The respondents did not explicitly record arguments in the judgment, but the Assessing Officer's order, as noted by the Court, classified the service under SAC 997337 and stated that the pendency of a matter before the Supreme Court does not stay the adjudication for others. The Court also noted that the petitioner did not explicitly state in the writ petition that the statements in the order were not their stand, and it was unbelievable that the Assessing Officer would note defenses without a reply.