Jindal Int Udhyog vs. Union Of INDIA

Held

The Court held that the right of the petitioners to file replies to show cause notices or to file appeals against final assessment orders is a statutory remedy available under the GST Act and they are free to avail it. Regarding the demand of GST on royalty, the Court noted 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. For the issue concerning the demand of GST on DMFT contribution, the Court permitted the petitioners in ten specific writ petitions (listed in the judgment) to continue pursuing this relief, while denying relief against the imposition of GST on royalty. Consequently, ten specified writ petitions were deferred for consideration of the DMFT issue, and the remaining batch of writ petitions was dismissed in light of the Sudershan Lal Gupta judgment.

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 specific writ petitions, an additional issue concerning 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., which dismissed similar petitions, was based on different facts (service tax on royalty) and did not adjudicate on the merits, thus prejudicing their right to argue their case. The respondents contended that the identical challenge had already been rejected 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 judgment in Sudershan Lal Gupta (supra)? 2. Whether the demand of GST on royalty paid for mining leases is legally sustainable? 3. Whether the demand of GST on DMFT contribution is legally sustainable? Petitioner's arguments: The petitioners contended that the judgment in Sudershan Lal Gupta (supra) was not on merits and dealt with service tax on royalty, which is distinct from the current GST issue, thus unfairly preventing them from arguing their case. They argued that the demand for GST on royalty was not justified. Respondent's arguments: The respondents argued that a Coordinate Bench had already dismissed identical challenges to the demand of GST on royalty in the Sudershan Lal Gupta case, and therefore, these petitions should also be rejected.