Vijay Kumar 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 final assessment orders, remains unaffected by the writ petition's outcome. Regarding the demand for GST on royalty, the Court found that this issue had been concluded by the judgment dated 27.09.2022 in Sudershan Lal Gupta vs. UOI & Ors. and connected matters, and thus, the writ petitions challenging this demand were dismissed. However, concerning the issue of GST demand 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 continue pursuing this relief while denying relief on the GST on royalty. 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 of demanding royalty on contribution to the District Mineral Foundation Trust (DMFT) was also raised. The petitioners argued that a previous Division Bench judgment of the same High Court, in Sudershan Lal Gupta vs. Union of India & Ors., which dismissed similar petitions, did not adjudicate on the merits and was based on different precedents concerning service tax on royalty, thus causing prejudice to their right to argue on merits. The respondents contended that the identical challenge to GST on royalty 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)? (Question of law) 2. Whether the demand of GST on royalty paid for mining leases is liable to be set aside? 3. Whether the demand of royalty on contribution to DMFT is liable to be set aside? (Question of mixed law and fact) Petitioner's arguments: The petitioners contended that the judgment in Sudershan Lal Gupta (supra) did not address the merits of their case and relied on distinct precedents related to service tax, not GST, on royalty. They argued that this prejudiced their ability to raise objections on the merits of the show cause notices. They also argued that the demand for GST on royalty was unsustainable. 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 (supra), these petitions should also be rejected.