M/S Sanwariya Stone 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, in a similar case (Sudarshan Lal Gupta vs. Union of India & Ors.), had already repelled the identical challenge to the leviability of GST on royalty. Despite the petitioner's argument that the earlier decision misinterpreted a Supreme Court judgment and the pendency of a similar issue before a nine-judge bench of the Supreme Court, the Court was not inclined to take a different view. The ratio decidendi is that a coordinate bench's decision on a similar issue, even if challenged or pending higher adjudication, should be followed by another coordinate bench unless there are compelling reasons to deviate. The Court dismissed the writ petition.
Facts
The petitioner, M/s Sanwariya Stone, has 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 is identical to one previously considered by a Division Bench of the Rajasthan High Court at Jaipur in the case of Sudarshan Lal Gupta vs. Union of India & Ors. dated September 27, 2022. The petitioner argued that the Jaipur Bench's decision in Sudarshan Lal Gupta failed to correctly interpret a Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha. The issue of GST on royalty is also 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 demand of GST on royalty collected by the petitioner is legally sustainable, considering the Supreme Court's 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 vs. Union of India & Ors., misinterpreted the Supreme Court's decision in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha, and therefore, the present writ petition should be accepted. The petitioner relied on the Supreme Court judgment to support their claim. Respondents' contention: The judgment does not record any specific contentions made by the respondents. However, it notes that a coordinate bench of the High Court had previously repelled a similar challenge to the leviability of GST on royalty.
AI-generated summary — verify with the full judgment below
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 13946/2022 M/s Sanwariya Stone, Through Its Authorised Signatory Shri Mrityunjay Sanadhya S/o Shri Kamlesh Kumar Sanadhya, Aged About 45 Years, Office At B-330, R.k. Colony, Bhilwara, Rajasthan 311001. ----Petitioner Versus
Union Of India, Through The Secretary, Finance Department, Government Of India, New Delhi.
The State Of Rajasthan, Through The Principal Secretary, Finance Department (Tax Division), Secretariat, Jaipur.
The Secretary, Mining Department, Government Of Rajasthan, Secretariat, Jaipur.
Deputy Commissioner (State Tax Department), Circle C, Bhilwara, Rajasthan 311001. ----Respondents For Petitioner(s) : Mr. Vinay Kothari For Respondent(s) : -- HON'BLE MR. JUSTICE SANDEEP MEHTA HON'BLE MR. JUSTICE KULDEEP MATHUR Order 10/10/2022 The petitioner, through this writ petition, has laid challenge to the impugned orders/ notice issued by the respondent Department demanding GST on the royalty collected by the petitioner. In a bunch of writ petitions led by D.B. Civil Writ Petition No.8109/2022 (Sudarshan Lal Gupta vs. Union of India & Ors.) and connected matters, Division Bench
The judgment continues below.
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