Tvl. Rajapalayam Cement And Chemicals LTD vs. The Assistant Commissioner (St)

Facts

The petitioner, Tvl. Rajapalayam Cement & Chemicals Ltd., filed a writ petition challenging an assessment order dated 26.02.2025 passed by the Assistant Commissioner (ST), Rajapalayam. The order levied GST on royalty and seigniorage charges payable by the petitioner for its mining activities. The petitioner contended that GST is not payable on mining activities, and this issue is pending before the Supreme Court in a batch of cases, including Udaipur Chambers of Commerce and Industry and Others Vs. Union of India and Others. The Madras High Court has previously stayed recovery proceedings in similar matters pending the Supreme Court's decision.

Held

The Court acknowledged that the issue of GST leviability on royalty and seigniorage charges for mining activities is pending before the Supreme Court. Following the consistent practice of the Madras High Court, the Court granted the petitioner liberty to file a statutory appeal within four weeks from the date of receipt of a copy of the order, without reference to limitation. The Court also directed that the appeal, if filed within the stipulated period, shall be numbered. Crucially, in view of the Supreme Court's decision, the petitioner was not required to make any pre-deposit. The Court disposed of the writ petition with these directions, effectively keeping the issue alive pending the final adjudication by the Supreme Court.

Key Issues

1. Whether GST is leviable on royalty and seigniorage charges payable on account of mining activities, in light of the pending decision of the Supreme Court in Udaipur Chambers of Commerce and Industry and Others Vs. Union of India and Others (Special Leave to Appeal (C)No.37326 of 2017)? Petitioner's contention: The petitioner argued that GST is not payable on mining activities and that the issue is awaiting a final decision from the Supreme Court. They relied on the consistent stand of the Madras High Court to keep recovery proceedings in abeyance pending the Supreme Court's disposal of the appeal. Respondent's contention: The judgment does not record any specific arguments made by the respondent.