Saroj Dudi vs. Union Of INDIA

Held

The Court held that there was no merit in the writ petition. The Court acknowledged the petitioner's argument that the Division Bench in Sudarshan Lal Gupta had misinterpreted the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha. However, the Court also noted that the issue of GST on royalty is 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. Despite these points, the Court stated that since a Coordinate Bench of the same High Court had already repelled the same challenge to the leviability of GST on royalty, it was not inclined to take a different view. Therefore, the writ petition was dismissed.

Facts

The petitioner, Saroj Dudi, proprietor of M/s Dudi Int Udyog, 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. The petitioner argued that the demand was incorrect, citing a Supreme Court judgment. However, the Court noted 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. The petitioner's counsel argued that the Jaipur Bench had misinterpreted a Supreme Court judgment. The Court also acknowledged 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 of 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? (Question of law) Petitioner's arguments: The petitioner contended that the GST demand was unsustainable and that the Division Bench in Sudarshan Lal Gupta had misinterpreted the Supreme Court judgment in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha. The petitioner relied on the Supreme Court judgment to support their claim. Respondents' arguments: The respondents relied on the previous judgment of a Coordinate Bench of the Rajasthan High Court at Jaipur in Sudarshan Lal Gupta vs. Union of India & Ors., which had dismissed an identical challenge to the levy of GST on royalty. The respondents did not present separate arguments but implicitly supported the precedent set by the Coordinate Bench.