Guru Kripa Int Udhyog 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 fate of the writ petitions. 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 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 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., had dismissed similar petitions without adjudicating on merits, relying on older cases concerning service tax on royalty, which they contended was a different issue. They claimed this prejudiced their right to argue on merits. The respondents argued that the coordinate bench's decision on the identical challenge of GST on royalty should lead to the dismissal of these petitions.

Key Issues

1. Whether the present writ petitions challenging the demand of GST on royalty paid for mining leases are maintainable in light of previous Division Bench judgments of this Court, specifically Sudershan Lal Gupta vs Union of India & Ors. (decided on 27.09.2022) and other related cases. 2. Whether the demand of GST on royalty paid for mining leases is legally sustainable. 3. Whether the demand of royalty on contribution to DMFT is legally sustainable. Petitioner's contentions: The petitioners argued that the judgment in Sudershan Lal Gupta (supra) was based on older cases dealing with service tax on royalty, which is distinct from the current GST regime. They contended that this prior judgment did not adjudicate on the merits of their case and has frustrated their right to raise objections against the show cause notices. Respondent's contentions: The respondents contended that a coordinate bench of this Court had already dismissed identical challenges to the demand of GST on royalty in the Sudershan Lal Gupta case, and therefore, these petitions should also be rejected.