Shree Chowdhary Stone Crasher vs. Union Of INDIA

Held

The Court held that there was no merit in the writ petition. It acknowledged that a Coordinate Bench of the Rajasthan High Court, in a bunch of writ petitions led by Sudarshan Lal Gupta vs. Union of India & Ors., had already repelled an identical challenge to the demand of GST on royalty. Despite the petitioner's argument that the previous judgment was based on an incorrect interpretation of the Supreme Court's decision in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha, and that the issue was pending before a larger bench of the Supreme Court in the case of Mineral Area Development Authority etc. & Ors. vs. M/s. Steel Authority of India & Ors., the Court declined to take a different view. The ratio decidendi is that once a Coordinate Bench has decided a similar issue, a subsequent bench should follow that precedent, especially when the matter is not finally settled by the Supreme Court. The Court did not grant any specific relief to the petitioner.

Facts

The petitioner, Shree Chowdhary Stone Crasher, through its proprietor, filed a writ petition challenging orders and a notice issued by the Deputy Commissioner, Circle Nagaur State Tax Department. The challenge was to the demand of Goods and Services Tax (GST) on royalty collected by the petitioner. The petitioner's counsel argued that a previous Division Bench judgment of the Rajasthan High Court at Jaipur Bench, in the case of Sudarshan Lal Gupta vs. Union of India & Ors. (dated 27.09.2022), which repelled an identical challenge to the GST demand on royalty, was based on an incorrect interpretation of a Supreme Court judgment. The petitioner contended that the writ petition merits acceptance despite the prior ruling.

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 and its application in the context of GST leviability on royalty. Petitioner's Contention: The learned counsel for the petitioner vehemently argued that the Division Bench in 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 writ petition should be accepted. The petitioner relied on the principle that royalty is a tax on land and not a service, thus not exigible to GST. Respondents' Contention: The judgment does not record specific arguments from the respondents. However, it notes that a Coordinate Bench of the Court had previously repelled a similar challenge to the leviability of GST on royalty.