Welcome Marble Industries vs. Central Board Of Excise And Customs

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 found that this issue was concluded by the judgment dated 27.09.2022 in Sudershan Lal Gupta vs. UOI & Ors. and connected matters. 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 pursue this relief while denying relief against the imposition of GST on royalty. Consequently, these ten writ petitions were deferred for consideration of the DMFT issue, while the remaining batch of writ petitions was dismissed.

Facts

A batch of writ petitions challenged show cause notices and assessment orders issued by the respondent 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 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., did not adjudicate on the merits and dismissed petitions based on earlier cases concerning service tax on royalty, which they contended is different from the current GST issue. They claimed this prejudiced their right to argue on merits. The respondents argued that a Coordinate Bench had already dismissed identical challenges to GST demands on royalty.

Key Issues

1. Whether the demand of GST on royalty paid by mining leaseholders to the Mining Department is legally sustainable, considering the distinction between the current GST regime and the previous service tax regime, and whether previous judgments on service tax are applicable. (Question of law) 2. Whether the petitioners' right to agitate the merits of the show cause notices or assessment orders has been frustrated by prior judgments. Petitioner's Contention: The petitioners argued that the Division Bench's dismissal in Sudershan Lal Gupta (supra) was based on earlier cases dealing with service tax on royalty, which is distinct from the present GST issue. They contended that this dismissal prejudiced their right to argue the merits of their GST demands. They relied on the distinction between service tax and GST. Respondent's Contention: The respondents contended that a Coordinate Bench had already dismissed identical challenges to GST demands on royalty in a previous judgment dated 27.09.2022, and therefore, these writ petitions should also be rejected.