Neelkanth Industries vs. Union Of INDIA

Held

The Court held that the petitioners' right to avail statutory remedies, such as filing replies to show cause notices or appeals against final assessment orders, remains unaffected by the writ petition's outcome. Regarding the demand for GST on royalty, the Court found that this issue was concluded by the judgment dated 27.09.2022 in D.B. Civil Writ Petition No. 8109/2022 (Sudershan Lal Gupta vs UOI & Ors.) and connected matters. Consequently, the majority of the writ petitions challenging this demand were dismissed. However, concerning the issue of GST demand on DMFT contributions, the Court permitted the petitioners in ten specific writ petitions (listed in the judgment) to pursue this relief while denying relief on the GST on royalty aspect. These ten petitions were deferred for further consideration of the DMFT issue.

Facts

A batch of writ petitions challenged show cause notices and assessment orders issued by the respondent GST Department demanding GST on royalty paid by the petitioners to the Mining Department for their mining leases. In ten specific writ petitions, an additional issue regarding the demand of royalty on contribution to the District Mineral Foundation Trust (DMFT) was also raised. The petitioners argued that a previous Division Bench judgment by the Jaipur Bench, in Sudershan Lal Gupta vs Union of India & Ors., incorrectly dismissed similar challenges by relying on unrelated cases concerning service tax on royalty, thereby frustrating their right to argue on merits. The respondents contended that the identical challenge had already been dismissed by a Coordinate Bench.

Key Issues

1. Whether the petitioners' right to agitate against the show cause notices on merits has been frustrated by the Division Bench judgment in Sudershan Lal Gupta (supra)? 2. Whether the demand of GST on royalty paid for mining leases is liable to be dismissed in light of previous judgments of this Court? 3. Whether the demand of GST on contribution to DMFT is liable to be considered on merits? Petitioner's arguments: The petitioners contended that the judgment in Sudershan Lal Gupta (supra) was based on a misapprehension of the facts, as it relied on cases dealing with service tax on royalty, which is distinct from the current GST issue. They argued that this dismissal prejudiced their right to a proper adjudication on the merits of their GST demands. The petitioners also argued that the demand for GST on DMFT contributions should be considered separately. Respondent's arguments: The respondents argued that since a Coordinate Bench had already dismissed identical challenges to the demand of GST on royalty in the Sudershan Lal Gupta case, these writ petitions should also be rejected.