New Sidhu Brar Bricks Killan 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 outcome 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, concerning the issue of demand of GST on DMFT contribution, which was raised in ten specific writ petitions, the Court permitted the petitioners in those petitions to continue their challenge, 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 GST on royalty paid by the petitioners to the Mining Department for their mining leases. In ten specific writ 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., dismissed similar petitions without adjudicating on merits, relying on older cases concerning service tax on royalty, which they contended is different from GST. They claimed this prejudiced their right to argue on merits. The respondents argued that the coordinate bench's decision in Sudershan Lal Gupta, which dismissed identical challenges to GST on royalty, should apply.

Key Issues

1. Whether the demand of GST on royalty paid by the petitioners to the Mining Department is liable to be set aside, considering the petitioners' contention that the previous Division Bench judgment in Sudershan Lal Gupta (supra) was based on an incorrect premise regarding the distinction between service tax and GST on royalty, and that their right to agitate on merits has been frustrated. 2. Whether the demand of royalty on contribution to DMFT, as raised in ten specific writ petitions, is legally sustainable. Petitioner's Arguments: The petitioners contended that the judgment in Sudershan Lal Gupta (supra) was not an adjudication on merits and was based on earlier cases dealing with service tax, not GST, on royalty. They argued that this precedent unfairly dismissed their right to argue the merits of their GST demands. They sought to distinguish the present case from the cited precedents. Respondent's Arguments: The respondents argued that a coordinate bench of the High Court had already dismissed identical challenges to the demand of GST on royalty in the case of Sudershan Lal Gupta (supra), and therefore, these writ petitions should also be rejected on the same ground.