Dinesh Kumar Bagri 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 final assessment orders, remains unaffected by the writ petition's outcome. Regarding the demand for GST on royalty, the Court noted that this issue was concluded by the judgment in Sudershan Lal Gupta vs UOI & Ors. (dated 27.09.2022), and thus, the writ petitions challenging this demand were dismissed. However, concerning the issue of GST on DMFT contributions, 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 on the GST on royalty aspect. 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 respondent GST Department demanding GST on royalty paid by the petitioners to the Mining Department for their mining leases. In ten of these petitions, an additional issue regarding the demand of royalty on contribution 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 present matter on merits. The respondents argued that the coordinate bench's decision in Sudershan Lal Gupta, which dealt with an identical challenge to GST on royalty, justified dismissing these petitions.

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 vs Union of India & Ors. (dated 27.09.2022)? 2. Whether GST is leviable on royalty paid by mining leaseholders to the Mining Department? 3. Whether GST is leviable on contributions made to the District Mineral Foundation Trust (DMFT)? Petitioner's arguments: The petitioners contended that the judgment in Sudershan Lal Gupta was based on prior cases dealing with service tax on royalty, which is distinct from the current GST regime, and that the dismissal without merit adjudication prejudiced their case. They argued that their right to raise objections on the merits of the show cause notices or assessment orders has been unfairly curtailed. Respondent's arguments: The respondents argued that the identical challenge to the demand of GST on royalty had already been repelled by a coordinate bench in Sudershan Lal Gupta, and therefore, these writ petitions should also be dismissed.