Ashok Kumar 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 are statutory remedies available under the GST Act and can be availed 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 petitioners in ten specific writ petitions were permitted to pursue this relief, while the relief against the imposition of GST on royalty was denied. Consequently, ten writ petitions were deferred for consideration of the DMFT issue, and the remaining batch of writ petitions was 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 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 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., 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 coordinate bench's decision in Sudershan Lal Gupta, which dismissed identical challenges to GST on royalty, should apply.

Key Issues

1. Whether the demand of GST on royalty paid for mining leases is maintainable in light of previous judgments concerning service tax on royalty? 2. Whether the petitioners' right to agitate against show cause notices on merits has been frustrated by the judgment in Sudershan Lal Gupta? 3. Whether the demand of GST on DMFT contribution is maintainable? Petitioner's Arguments: The petitioners contended that the Division Bench in Sudershan Lal Gupta had dismissed writ petitions without adjudicating on merits, relying on prior judgments that dealt with service tax on royalty, which is distinct from the current GST issue. They argued that this dismissal prejudiced their right to argue the merits of their case. Respondent's Arguments: The respondents argued that a coordinate bench of the High Court had already dismissed identical challenges to the demand of GST on royalty in the case of Sudershan Lal Gupta, and therefore, these writ petitions should also be rejected.