Ramdev Stone And Granite, Udaipur 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 are statutory remedies available under the GST Act and are independent of the fate of the writ petitions. Regarding the demand of GST on royalty, the Court noted that this issue stands concluded by the judgment dated 27.09.2022 in Sudershan Lal Gupta (supra). Consequently, the majority of the writ petitions challenging the GST demand on royalty 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 the petitioners to continue pursuing this specific relief 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 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 by the Jaipur Bench, in Sudershan Lal Gupta vs Union of India & Ors., had dismissed similar petitions without adjudicating on merits, relying on unrelated precedents concerning service tax on royalty. They contended this prejudiced their right to argue the present matter on its merits. The respondents argued that the identical challenge to GST on royalty had already been rejected by a Coordinate Bench, warranting dismissal of these petitions.

Key Issues

1. Whether the demand of GST on royalty paid for mining leases is legally sustainable, considering the petitioners' right to agitate the matter on merits, and in light of previous judgments by this Court? (Question of law, turning on the interpretation of GST provisions and principles of natural justice). 2. Whether the demand of GST on contributions to the District Mineral Foundation Trust (DMFT) is legally sustainable? (Question of law, turning on the interpretation of GST provisions). Petitioner's Contentions: - The Division Bench judgment in Sudershan Lal Gupta (supra) was based on unrelated precedents concerning service tax and did not adjudicate the present GST issue on merits, thus prejudicing the petitioners. - The petitioners should have the right to raise objections against the show cause notices and assessment orders on their merits. Respondent's Contentions: - A Coordinate Bench of this Court has already dismissed identical challenges to the demand of GST on royalty in its judgment dated 27.09.2022 in Sudershan Lal Gupta (supra). - Therefore, these writ petitions also deserve rejection.