Star INDIA Industries Through One Of Its Partners, Namely, Kumar Nilabh vs. The State Of Jharkhand Through Its Secretary, Department Of State Tax

Held

The Court held that the writ application is not maintainable. It was undisputed that an appeal lies against the impugned order. Therefore, instead of availing the alternative statutory remedy of appeal, the petitioner approached the High Court by filing this writ application, which cannot be sustained. The Court explicitly stated that it was not expressing any opinion on the merits of the writ application. Consequently, the writ application was disposed of, with the petitioner being permitted to pursue the remedy before the appropriate appellate authority in accordance with the law. No specific findings were made on the leviability of GST on royalty or the nature of royalty payments.

Facts

The petitioner, Star India Industries, filed a writ application challenging an order dated 06.06.2023 passed by the State Tax Officer, Sahebganj Circle, for the period 2019-20. The order imposed GST on royalty paid by the petitioner to the State of Jharkhand for a mining lease of Stone Boulders. The petitioner sought to quash this order and declare that no GST is leviable on royalty and District Mineral Fund contributions, arguing these are in the nature of 'tax' or 'profit a prendre' and not 'consideration' for services. The petitioner also noted the matter is connected to a pending writ petition. The respondents argued that the impugned order is appealable and involves disputed questions of fact, which should be adjudicated by the appellate authority.

Key Issues

1. Whether the writ application is maintainable before this Court, given the existence of an alternative appellate remedy under the statute, as contended by the respondents? 2. Whether GST is leviable on the amount of Royalty and District Mineral Fund Contribution paid by the petitioner to the State of Jharkhand in respect of a mining lease for excavation of stone, as argued by the petitioner? Petitioner's Contention: The petitioner argued that the imposition of GST is not in consonance with the provisions of law. They contended that royalty is in the nature of 'tax' or 'profit a prendre' and cannot be deemed 'consideration' for alleged services provided by the State, such as assignment of rights to use mineral resources or licensing services, classifiable under chapter heading-9973. Respondents' Contention: The respondents vehemently contended that the impugned order is appealable. They argued that since an alternative remedy exists, the petitioner should not have approached the High Court via a writ application, especially as disputed questions of fact are involved, which can only be adjudicated by the Appellate Authority.