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

Held

The Court held that there was no merit in the writ petition. It reasoned that a Coordinate Bench of the same High Court had already considered and rejected an identical challenge to the leviability of GST on royalty in a previous case (Sudarshan Lal Gupta vs. Union of India & Ors.). Despite the petitioner's argument that the previous judgment mis-interpreted a Supreme Court ruling, and acknowledging that the issue was pending before a larger Bench of the Supreme Court, the Court stated it was not inclined to take a different view. The ratio decidendi is that a High Court should generally follow the decisions of its Coordinate Benches on similar matters, even if the issue is under consideration at a higher judicial forum, unless there are compelling reasons to deviate. The Court did not grant any specific relief to the petitioner and dismissed the petition.

Facts

The petitioner, M/s Hariom Mines And Minerals, through its partner, filed a writ petition challenging orders/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 at Jaipur in a bunch of writ petitions led by D.B. Civil Writ Petition No.8109/2022 (Sudarshan Lal Gupta vs. Union of India & Ors.). The Jaipur Bench, vide an order dated 27.09.2022, had rejected the challenge to the demand of GST on royalty. The petitioner argued that the Jaipur Bench's interpretation of the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha was incorrect. The Court noted that similar previous judgments had been challenged before the Supreme Court, and the issue was pending before a nine-judge Bench in the case of Mineral Area Development Authority etc. & Ors. vs. M/s. Steel Authority of India & Ors.

Key Issues

1. Whether the demand of GST on royalty collected by the petitioner is legally sustainable, considering the interpretation of the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha (Civil Appeal No.6492/2002)? Petitioner's contention: The petitioner argued that the Division Bench of the Rajasthan High Court at Jaipur, in the case of Sudarshan Lal Gupta (Supra), failed to correctly interpret the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha, and therefore, the present writ petition merits acceptance. Respondents' contention: The judgment records no specific arguments from the respondents. However, it notes that a Coordinate Bench of the same High Court had previously repelled a similar challenge to the leviability of GST on royalty.