Ganpati Int Udyog vs. Union Of INDIA

Held

The Court held that the right of the petitioners to avail statutory remedies, such as filing replies to show cause notices or appealing assessment orders, remains available irrespective of the outcome of the writ petitions. Regarding the demand of 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. Consequently, the majority of the writ petitions challenging this demand were dismissed in light of that precedent. However, for the ten writ petitions that also raised the issue of demand of GST on DMFT contribution, the Court permitted these petitioners to continue pursuing this specific relief while denying relief on the imposition of GST on royalty. These ten petitions were deferred for consideration of the DMFT issue only.

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 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 older cases concerning service tax on royalty, which they contended was a different issue. They claimed this prejudiced their right to argue on merits. The respondents argued that the identical challenge to GST on royalty had been repelled by a Coordinate Bench, justifying dismissal.

Key Issues

1. Whether the demand of GST on royalty paid for mining leases is legally sustainable, considering previous judgments of this Court? (Question of law turning on the interpretation of relevant GST provisions and precedents). 2. Whether the petitioners' right to agitate against the show cause notices on merits has been frustrated by the dismissal of previous writ petitions without adjudication on the specific controversy at hand? 3. Whether the demand of royalty on contribution to DMFT is legally sustainable? Petitioner's contentions: The petitioners argued that the Division Bench's dismissal in Sudershan Lal Gupta (supra) was based on prior cases dealing with service tax on royalty, which is distinct from the current GST issue. They contended that this dismissal unfairly prevented them from arguing the merits of their GST demands. They sought to distinguish the present case from the precedents relied upon by the respondents. Respondent's contentions: The respondents contended that a Coordinate Bench had already dismissed identical challenges to the demand of GST on royalty in its judgment dated 27.09.2022 in Sudershan Lal Gupta (supra), and therefore, these writ petitions should also be rejected on the same grounds.