Sultane Hind Granites And Marble vs. State Of Rajasthan

Held

The Court held that the petitioners' right to avail statutory remedies, such as filing replies to show cause notices or appeals against assessment orders, remains unaffected by the writ petition's outcome. Regarding the demand for GST on royalty, the Court deferred to the judgment in Sudershan Lal Gupta vs UOI & Ors., which had concluded this controversy. For the issue concerning the demand of GST on DMFT contribution, the Court permitted the petitioners in specific writ petitions (Nos. 6368/2022, 6370/2022, 6373/2022, 6513/2022, 7801/2022, 8629/2022, 8671/2022, 10681/2022, 8407/2022, and 8492/2022) to pursue this relief, while denying relief against the imposition of GST on royalty. Consequently, these ten petitions were deferred for consideration of the DMFT issue, and the remaining batch of writ petitions was dismissed.

Facts

A batch of writ petitions challenged show cause notices and assessment orders issued by the GST Department demanding Goods and Services Tax (GST) on royalty paid by the petitioners to the Mining Department for their mining leases. In ten of these petitions, an additional issue regarding the demand of royalty on contributions to the District Mineral Foundation Trust (DMFT) was also raised. The petitioners argued that a previous Division Bench judgment at the Jaipur Bench, in Sudershan Lal Gupta vs Union of India & Ors., had dismissed similar petitions without adjudicating on merits, relying on unrelated prior cases concerning service tax on royalty. They contended this prejudiced their right to argue the current matter on merits. The respondents argued that the coordinate bench's decision in Sudershan Lal Gupta, which dealt with an identical challenge to GST on royalty, warranted dismissal of these petitions.

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 vs Union of India & Ors. (dated 27.09.2022)? 2. Whether the demand of GST on royalty paid by the petitioners to the Mining Department is liable to be set aside? 3. Whether the demand of royalty on contribution to DMFT is liable to be set aside? Petitioner's arguments: The petitioners contended that the judgment in Sudershan Lal Gupta was not an adjudication on merits and relied on earlier cases dealing with service tax on royalty, which they argued is distinct from the current GST issue. They claimed this prejudiced their right to a merits-based hearing. Respondent's arguments: The respondents argued that since a coordinate bench had already dismissed identical challenges to the demand of GST on royalty in Sudershan Lal Gupta, these petitions should also be rejected.