Nitu Bagri 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 noted that this issue was 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 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 GST on royalty paid by mining leaseholders to the Mining Department. In ten specific 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 unrelated prior cases concerning service tax on royalty. They contended this prejudiced their right to argue the current GST on royalty issue on merits. The respondents argued that the identical challenge to GST on royalty 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 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 royalty on DMFT contribution is legally sustainable? Petitioner's arguments: The petitioners contended that the Division Bench in Sudershan Lal Gupta had dismissed their petitions without considering the merits, relying on older cases dealing with service tax on royalty, which they argued is distinct from the current GST issue. They claimed this dismissal prejudiced their right to argue the GST on royalty issue on its merits. Respondent's arguments: The respondents argued that a Coordinate Bench had already dismissed identical challenges to the demand of GST on royalty in a previous judgment dated 27.09.2022, and therefore, these writ petitions should also be rejected.