Saini Bricks Udyog vs. Union Of INDIA

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 noted that this issue stood concluded by the judgment dated 27.09.2022 in Sudershan Lal Gupta vs UOI & Ors. and connected matters. For the issue concerning the demand of GST on DMFT contribution, the Court permitted the petitioners in ten specific writ petitions (listed in the judgment) to continue their challenge while turning down the 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 were dismissed in light of the Sudershan Lal Gupta judgment.

Facts

A batch of writ petitions challenged show cause notices and assessment orders issued by the respondent GST Department demanding 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 earlier cases concerning service tax on royalty, which they contended was a different issue. They claimed this prejudiced their right to argue their case on merits. The respondents argued that the identical challenge to GST on royalty had already been rejected by a Coordinate Bench, warranting dismissal of these petitions.

Key Issues

1. Whether the demand of GST on royalty paid by the petitioners for their mining leases is legally sustainable, considering the previous pronouncements of this Court? 2. Whether the petitioners are prejudiced by the dismissal of their writ petitions based on prior judgments without a decision on the merits of their specific contentions regarding GST on royalty? 3. Whether the demand of royalty on contribution to DMFT is legally sustainable? Petitioner's contentions: The petitioners argued that the Division Bench in Sudershan Lal Gupta (supra) did not adjudicate on the merits and erroneously relied on earlier cases dealing with service tax on royalty, which is distinct from the current GST issue. They asserted that this dismissal frustrated their right to agitate the show cause notices on merits. Respondent's contentions: The respondents contended that a Coordinate Bench had already rejected an identical challenge to the demand of GST on royalty in its judgment dated 27.09.2022, and therefore, these writ petitions should also be dismissed.