Dilraj Singh vs. State Of Rajasthan

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, which they are free to pursue 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 D.B. Civil Writ Petition No. 8109/2022 (Sudershan Lal Gupta vs UOI & Ors.) and connected matters. However, concerning the issue of 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 continue their challenge. The remaining batch of writ petitions was dismissed in light of the Sudershan Lal Gupta judgment.

Facts

A batch of writ petitions was filed challenging show cause notices and assessment orders issued by the respondent GST Department. These notices raised demands for GST on royalty paid by the petitioners to the Mining Department for their mining leases. In ten of these 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 of 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 present matter on merits. The respondents argued that the identical challenge to GST on royalty had already been dismissed by a Coordinate Bench, warranting 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 (supra), which relied on earlier cases concerning service tax on royalty, thereby prejudicing the petitioners? Petitioner's argument: The petitioners contended that the judgment in Sudershan Lal Gupta was based on prior decisions dealing with service tax on royalty, which is distinct from the current GST issue. They argued that this dismissal without merit adjudication unfairly prejudiced their right to challenge the GST demands on their specific facts. They also argued that the previous judgments relied upon by the respondents were not applicable to the present GST regime. Respondent's argument: The respondents argued that a Coordinate Bench had already dismissed identical challenges to GST demands on royalty in the Sudershan Lal Gupta case, and therefore, these writ petitions should also be rejected on the same grounds.