Singodia Ent Udyog vs. Union Of INDIA

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 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 ten specific writ petitions (listed in the judgment) to continue pursuing this relief, while denying relief against the imposition of GST on royalty. Consequently, the Court deferred the consideration of the DMFT issue for these ten petitions and dismissed the remaining batch of writ petitions 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 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., did not adjudicate on the merits and was based on earlier cases concerning service tax on royalty, which they contended is different from the current GST issue. They claimed this prejudiced their right to raise objections on merits. The respondents argued that identical challenges to GST demands on royalty had already been dismissed by a Coordinate Bench.

Key Issues

1. Whether the petitioners' right to agitate against the show cause notices and assessment orders on merits has been frustrated by the Division Bench judgment in Sudershan Lal Gupta (supra)? (Question of law). 2. Whether the demand of GST on royalty paid for mining leases is legally sustainable? (Question of law). 3. Whether the demand of royalty on contribution to DMFT is legally sustainable? (Question of law). Petitioner's contentions: The petitioners argued that the judgment in Sudershan Lal Gupta was not on merits and relied on distinct service tax cases, thus not precluding them from arguing the current GST issue on merits. They contended that their statutory right to raise objections and file appeals has been frustrated. Respondent's contentions: The respondents contended that a Coordinate Bench had already dismissed identical challenges to GST demands on royalty, and therefore, these writ petitions should also be rejected.