M/S Jagdamba Bricks Udhyog vs. Union Of INDIA

Held

The Court held that the petitioners' statutory remedies to file replies to show cause notices or appeals against final assessment orders remain available, irrespective of 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. Consequently, the majority of the writ petitions challenging the GST on royalty demand were dismissed in light of this precedent. However, for the ten writ petitions that also raised the issue of demand of GST on DMFT contribution, the Court permitted them to continue consideration of this specific issue while dismissing the challenge to the GST on royalty. The Court deferred these ten petitions for further consideration of the DMFT issue.

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. Ten of these petitions also raised an additional issue concerning the demand of royalty on contributions to the District Mineral Foundation Trust (DMFT). The petitioners argued that a previous Division Bench judgment of the same High Court, 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 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 or assessment orders on merits has been frustrated by the Division Bench judgment in Sudershan Lal Gupta (supra), which allegedly dismissed similar petitions without a detailed adjudication on the merits of the GST on royalty issue? Petitioner's Contention: The petitioners argued that the judgment in Sudershan Lal Gupta (supra) was based on earlier cases dealing with service tax on royalty, which is distinct from the current GST on royalty controversy. They contended that this dismissal without merit adjudication prejudiced their right to raise objections. Respondent's Contention: The respondents argued that a Coordinate Bench had already rejected an identical challenge to the demand of GST on royalty in its judgment dated 27.09.2022, and therefore, these writ petitions should also be dismissed.