Rakesh Kumar 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 Rajasthan High Court had already considered and repelled an identical challenge to the leviability of GST on royalty in the case of Sudarshan Lal Gupta vs. Union of India & Ors. dated 27.09.2022. Although the petitioner argued that the interpretation of the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha by the coordinate bench was incorrect, and acknowledged that the issue was pending before a nine-judge bench of the Supreme Court in Mineral Area Development Authority etc. & Ors. vs. M/s. Steel Authority of India & Ors., the Court stated it was not inclined to take a different view from its coordinate bench. The ratio decidendi is that a High Court should generally follow the decisions of its coordinate benches on identical issues, even if a larger bench of the Supreme Court is considering a related matter, unless there are compelling reasons to deviate.

Facts

The petitioner, Rakesh Kumar, proprietor of Rakesh Int Udyog, filed a writ petition challenging orders/notices issued by the respondent department demanding Goods and Services Tax (GST) on royalty collected by him. This challenge was identical to that raised in a batch of writ petitions led by D.B. Civil Writ Petition No. 8109/2022 (Sudarshan Lal Gupta vs. Union of India & Ors.). A Division Bench of the Rajasthan High Court at Jaipur had previously dismissed the challenge in the Sudarshan Lal Gupta case on September 27, 2022. 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. Despite the pendency of a related matter before a nine-judge bench of the Supreme Court in Mineral Area Development Authority etc. & Ors. vs. M/s. Steel Authority of India & Ors., the Court noted the prior decision by a coordinate bench.

Key Issues

1. Whether the Division Bench of this Court in D.B. Civil Writ Petition No. 8109/2022 (Sudarshan Lal Gupta vs. Union of India & Ors.) correctly interpreted the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha (Civil Appeal No. 6492/2002) in repelling the challenge to the demand of GST on royalty? Petitioner's Contention: The learned Division Bench in the Sudarshan Lal Gupta case failed to make a correct interpretation of the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha, and therefore, the writ petition merits acceptance. The petitioner relied on the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha. Respondents' Contention: The judgment records no specific arguments from the respondents.