Suresh Kumar 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 of GST on royalty, the Court deferred to the judgment in Sudershan Lal Gupta (supra), which had concluded this controversy. However, concerning the issue of GST on DMFT contributions, 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 aspect. 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 of these petitions, an additional issue of demanding GST 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, which dismissed similar writ petitions, did not adjudicate on the merits and was based on different controversies (service tax on royalty). They contended that this prejudiced their right to raise objections on merits. The respondents argued that a coordinate bench had already dismissed identical challenges to GST demands on royalty.

Key Issues

1. Whether the petitioners' right to agitate against the show cause notices on merits has been frustrated by the previous Division Bench judgment in Sudershan Lal Gupta (supra)? 2. Whether GST is leviable on royalty paid for mining leases? 3. Whether GST is leviable on contributions to DMFT? Petitioner's Arguments: The petitioners contended that the judgment in Sudershan Lal Gupta (supra) did not decide the merits of the case and relied on distinct precedents concerning service tax on royalty, thus unfairly prejudicing their right to a merits-based adjudication of their GST liability on royalty. They argued that the controversy regarding GST on royalty is different from the service tax issues decided in prior cases. Respondent's Arguments: The respondents argued that a coordinate bench of the High Court had already dismissed similar challenges to the demand of GST on royalty in its judgment dated 27.09.2022 in Sudershan Lal Gupta (supra), and therefore, these petitions should also be rejected.