Bansal Bricks Udyog vs. Union Of INDIA

Held

The Court held that the right of the petitioners 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 found that this issue had been concluded by the judgment dated 27.09.2022 in D.B. Civil Writ Petition No. 8109/2022 (Sudershan Lal Gupta vs UOI & Ors.) and connected matters. Consequently, the majority of the writ petitions challenging this demand were dismissed in light of that precedent. However, for the ten writ petitions that also raised the issue of demand for GST on DMFT contribution, the Court permitted the petitioners to pursue this specific relief while denying relief against the imposition of GST on royalty. These ten petitions were deferred for further consideration of the DMFT issue.

Facts

A batch of writ petitions challenged show cause notices and assessment orders issued by the respondent GST Department demanding Goods and Services Tax (GST) on royalty paid by the petitioners to the Mining Department for their mining leases. In ten of these 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 at the Jaipur Bench, in Sudershan Lal Gupta vs Union of India & Ors., which dismissed similar petitions, did not adjudicate on the merits and was based on different controversies (service tax on royalty). They contended that this precedent prejudiced their right to argue the current matter on its merits. The respondents argued that the coordinate bench's prior ruling on identical challenges to GST on royalty should lead to the dismissal of these petitions.

Key Issues

1. Whether the demand of GST on royalty paid for mining leases is valid, considering previous judgments of this Court? 2. Whether the petitioners' right to agitate the merits of the show cause notices and assessment orders has been frustrated by the judgment in Sudershan Lal Gupta (supra)? 3. Whether the demand of GST on contribution to DMFT is valid? Petitioner's arguments: The petitioners contended that the judgment in Sudershan Lal Gupta (supra) was not on merits and relied on cases concerning service tax on royalty, which is distinct from GST. They argued that this precedent unfairly prevented them from arguing the current GST issue on its merits. They also sought to raise the issue of DMFT contribution separately. Respondent's arguments: The respondents argued that a coordinate bench had already dismissed identical challenges to GST on royalty in Sudershan Lal Gupta (supra), and therefore, these petitions should also be dismissed on the same ground.