M/S Rk Stone vs. Union Of INDIA

Held

The Court held that there was no merit in the writ petition. It reasoned that a coordinate bench of the Rajasthan High Court had already considered and repelled an identical challenge to the leviability of GST on royalty in the case of Sudarshan Lal Gupta vs. Union of India & Ors. dated 27.09.2022. Although the petitioner argued that this previous judgment had misinterpreted a Supreme Court ruling and that the broader issue is pending before the Supreme Court, the Court, as a coordinate bench, was not inclined to take a different view. The ratio decidendi is that a coordinate bench's decision on a similar issue, even if challenged or pending higher review, binds other coordinate benches unless distinguished. The Court did not make any specific findings on the interpretation of the Supreme Court judgments cited, but rather relied on the precedent of the coordinate bench. No specific operative directions were issued beyond dismissing the petition.

Facts

The petitioner, M/s Rk Stone, filed a writ petition challenging orders and notices issued by the respondent Department demanding Goods and Services Tax (GST) on royalty collected by the petitioner. This challenge was identical to one previously considered by a Division Bench of the Rajasthan High Court at Jaipur in the case of Sudarshan Lal Gupta vs. Union of India & Ors. The petitioner argued that the Jaipur Bench's decision in Sudarshan Lal Gupta had misinterpreted a Supreme Court judgment. Despite this argument, and acknowledging that the issue of GST on royalty is pending before a nine-judge Bench of the Supreme Court in the case of Mineral Area Development Authority etc. & Ors. vs. M/s. Steel Authority of India & Ors., the Court noted that a coordinate bench had already ruled on the same issue.

Key Issues

1. Whether the Division Bench of this Court in Sudarshan Lal Gupta vs. Union of India & Ors. correctly interpreted the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha, thereby correctly repelling the challenge to the demand of GST on royalty? (Question of law/mixed law and fact, turning on interpretation of Supreme Court precedent and GST provisions). Petitioner's Arguments: The petitioner contended that the Division Bench in Sudarshan Lal Gupta failed to correctly interpret the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha, and therefore, the writ petition should be accepted. The petitioner implicitly argued that GST should not be leviable on royalty based on this alleged misinterpretation. Respondents' Arguments: The judgment does not record any specific arguments made by the respondents. However, the Court's decision implies that the respondents would have relied on the previous judgment of the coordinate bench upholding the levy of GST on royalty.