M/S Krishna Granite 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 appeals against final assessment orders, remains unaffected by the fate of the writ petitions. Regarding the demand of GST on royalty, the Court noted that this issue was concluded by the judgment dated 27.09.2022 in Sudershan Lal Gupta (supra) and connected matters. For the issue concerning the demand of GST on DMFT contributions, the Court permitted the petitioners in ten 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 against the imposition of GST on royalty. Consequently, these ten petitions were deferred for consideration of the DMFT issue, and 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 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 at the Jaipur Bench, in Sudershan Lal Gupta vs Union of India & Ors., did not adjudicate on the merits and incorrectly dismissed petitions based on earlier cases dealing with service tax on royalty, which they contended is different from GST. They claimed this prejudiced their right to argue the merits of their cases.

Key Issues

1. Whether the demand of GST on royalty paid for mining leases is valid, considering the precedent set by previous Division Bench judgments of this Court? (Question of law) 2. Whether the petitioners' right to agitate the merits of their show cause notices or assessment orders has been frustrated by the dismissal of their writ petitions based on prior judgments? 3. In ten specific writ petitions, whether the demand of GST on contributions to DMFT is valid? (Question of law) Petitioner's Arguments: The petitioners contended that the Division Bench's dismissal in Sudershan Lal Gupta (supra) was based on incorrect reliance on earlier cases dealing with service tax on royalty, which is distinct from the current GST regime. They argued that this dismissal prejudiced their right to a merits-based adjudication. They also raised the issue of DMFT contributions in specific cases. Respondent's Arguments: The respondents argued that as a Coordinate Bench had already dismissed identical challenges to the demand of GST on royalty in Sudershan Lal Gupta (supra) on 27.09.2022, these writ petitions should also be rejected.