Karamjeet Singh vs. Union Of INDIA

Held

The Court held that the right of the petitioners to file replies and raise objections against the show cause notices, or to file appeals against final assessment orders, is a statutory remedy available under the GST Act and they are free to avail such remedies irrespective of the fate of the writ petitions. Regarding the demand of GST on royalty, the Court found that this issue was 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 were dismissed on this ground. However, for the ten writ petitions that also raised the issue of demand of GST on DMFT contribution, the Court permitted the petitioners to continue their challenge specifically on this remaining issue, while turning down the relief against the imposition of GST on royalty. These ten petitions were deferred for 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. 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 decision by the Jaipur Bench of the High Court in Sudershan Lal Gupta vs. Union of India & Ors. was not based on merits and was distinguishable from the present case, as it dealt with service tax on royalty, not GST. They contended that this prior judgment unfairly prejudiced their right to argue the merits of their GST notices. The respondents argued that the coordinate bench's decision in Sudershan Lal Gupta, which dismissed identical challenges to GST demands on royalty, should apply here.

Key Issues

1. Whether the demand of GST on royalty paid by the petitioners for their mining leases is legally sustainable, considering the prior judgment of this Court in Sudershan Lal Gupta vs. Union of India & Ors. (DB Civil Writ Petition No.8109/2022) and other related cases. 2. Whether the petitioners are entitled to raise objections against the show cause notices and assessment orders on merits, or if the prior judgment precludes them from doing so. 3. Whether the demand of royalty on contribution to DMFT is legally sustainable. Petitioner's contentions: The petitioners argued that the decision in Sudershan Lal Gupta was not on merits and was based on earlier cases dealing with service tax, which is distinct from GST. They asserted that this prior judgment unfairly denied them the opportunity to agitate their case on the merits of the GST demand. They relied on the principle that their right to raise objections against show cause notices and assessment orders should be preserved. Respondent's contentions: The respondents contended that the coordinate bench's decision in Sudershan Lal Gupta, which dismissed identical challenges to GST demands on royalty, should be applied, and therefore, these writ petitions should also be rejected.