Dayaram vs. Union Of INDIA

Held

The Court held that there was no merit in the writ petition. The reasoning was based on a prior decision by a Coordinate Bench of the same High Court at Jaipur, which had dismissed an identical challenge to the levy of GST on royalty. Although the petitioner's counsel argued that this prior decision misinterpreted a Supreme Court judgment and that the larger issue is pending before the Supreme Court, the Court stated that it was not inclined to take a different view from its Coordinate Bench. Therefore, the writ petition was dismissed. The operative direction was the dismissal of the writ petition.

Facts

The petitioner, Dayaram, has filed a writ petition challenging orders and notices issued by the respondent department demanding Goods and Services Tax (GST) on royalty collected by him. The petitioner's counsel was informed that a Division Bench of the Rajasthan High Court at Jaipur, in a connected matter (Sudarshan Lal Gupta vs. Union of India & Ors.), had previously dismissed an identical challenge to the levy of GST on royalty. Despite this, the petitioner's counsel argued that the earlier decision misinterpreted a Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha. 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 demand for GST on royalty collected by the petitioner is legally sustainable, considering the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha? Petitioner's Arguments: The petitioner argued that the Division Bench in Sudarshan Lal Gupta erred in its interpretation of the Supreme Court's decision in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha, and therefore, the writ petition should be accepted. Revenue/State's Arguments: The judgment does not record any specific arguments made by the respondents. However, it notes that a Coordinate Bench had previously repelled a similar challenge.