M/S Hariom Mines And Minerals vs. Union Of INDIA

Held

The Court held that it was not inclined to take a different view from the coordinate bench's decision in Sudarshan Lal Gupta, which had repelled an identical challenge to the leviability of GST on royalty. The reasoning was based on the precedent set by the coordinate bench of the same High Court. Although the Supreme Court has not finally decided the issue, and it is pending before a nine-judge bench, the High Court chose to follow its own prior ruling. The Court found no merit in the writ petition. The operative direction was the dismissal of the writ petition.

Facts

The petitioner, M/s Hariom Mines And Minerals, filed a writ petition challenging orders and notices issued by the respondent department demanding Goods and Services Tax (GST) on royalty collected by the petitioner. This challenge was identical to one previously considered by a Division Bench of the Rajasthan High Court in a batch of writ petitions led by D.B. Civil Writ Petition No.8109/2022 (Sudarshan Lal Gupta vs. Union of India & Ors.). The petitioner argued that the earlier Division Bench's interpretation of a Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha was incorrect. The Court noted that the issue of GST on royalty is pending before a nine-judge bench of the Supreme Court in the case of Mineral Area Development Authority etc. & Ors. vs. M/s. Steel Authority of India & Ors.

Key Issues

1. Whether the Division Bench of this Court correctly interpreted the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha in its decision in Sudarshan Lal Gupta (Supra) regarding the leviability of GST on royalty. Petitioner's contention: The learned Division Bench in Sudarshan Lal Gupta erred in its interpretation of the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha, and therefore, the present writ petition should be accepted. Respondents' contention: Not recorded in the judgment.