Shiv Shankar Int Udyog vs. State Of Rajasthan

Held

The Court held that the petitioners' right to avail statutory remedies, such as filing replies to show cause notices or appeals against assessment orders, remains unaffected by the writ petition's outcome. Regarding the demand for 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. However, for the ten writ petitions specifically raising the issue of GST demand on DMFT contribution, the Court permitted the petitioners to pursue this relief while denying relief on the GST on royalty issue. Consequently, the Court deferred the consideration of the DMFT issue in those ten petitions and dismissed the remaining writ petitions 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 specific writ petitions, an additional issue of demanding royalty on contribution to the District Mineral Foundation Trust (DMFT) was also raised. The petitioners argued that a previous Division Bench judgment of the same High Court, 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, thus prejudicing their right to argue on merits. The respondents contended that the identical challenge had already been rejected by a Coordinate Bench.

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)? 2. Whether the demand of GST on royalty paid for mining leases is legally sustainable? 3. Whether the demand of GST on contribution to DMFT is legally sustainable? Petitioner's arguments: The petitioners contended that the judgment in Sudershan Lal Gupta (supra) was based on different facts (service tax vs. GST) and did not adjudicate the merits of their case, thereby frustrating their right to raise objections. They argued that the demand of GST on royalty was distinct from the issues decided in prior cases cited by the respondents. Respondent's arguments: The respondents argued that a Coordinate Bench had already dismissed identical challenges to the demand of GST on royalty in its judgment dated 27.09.2022, and therefore, these writ petitions should also be rejected.