M/S Sohan Singh Meet Singh And Sons vs. Union Of INDIA And Others
Held
The Court held that the Supreme Court's judgment in India Cement Ltd. and ors. vs. State of Tamil Nadu and ors. (19901) 1 SCC 12, which declared royalty as a tax, has been overruled by a Nine-Judge Bench of the Supreme Court in Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr., 2024 INSC 554. The latter judgment clearly holds that royalty is not a tax. Consequently, the respondents are justified in levying GST on royalty paid by mineral concession holders for mining concessions granted by the State. The impugned notices dated 16.02.2024 and summon dated 15.03.2024 were upheld. The petition was dismissed, with parties left to bear their own costs. No issue was expressly left undecided.
Facts
The petitioner, M/s Sohan Singh Meet Singh and Sons, filed a writ petition challenging several notifications related to GST levied on royalty paid for mining concessions granted by the State. The petitioner sought to quash these notifications and refund of GST already collected. The core of the dispute revolved around whether GST could be levied on royalty. The petition was initially based on the Supreme Court's judgment in India Cement Ltd. vs. State of Tamil Nadu, which held royalty to be a tax. This Court had previously stayed the demand for GST on royalty. However, the Supreme Court subsequently overruled the India Cement Ltd. judgment in Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr.
Key Issues
1. Whether GST can be levied on royalty paid by a mineral concession holder for mining concessions granted by the State, in light of the Supreme Court's judgment in Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr. (2024 INSC 554)? Petitioner's contention: The petitioner argued that royalty is a tax, relying on the earlier Supreme Court judgment in India Cement Ltd. and ors. vs. State of Tamil Nadu and ors. (19901) 1 SCC 12. They sought to quash notifications imposing GST on royalty and sought refund of taxes paid. Respondents' contention: The respondents contended that the Supreme Court's decision in India Cement Ltd. has been overruled by a Nine-Judge Bench in Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr., which held that royalty is not a tax. Therefore, the respondents are within their rights to levy GST on royalty.
Sections Cited
Notification No.11/2017 Central Tax (Rate), Notification No.1/2017 - Central Tax (Rate), Himachal Pradesh Govt. Notification No.11/2017, Himachal Pradesh Govt. Notification No.1/2017, Notification No.27/2018- Central Tax (Rate), Himachal Pradesh Govt. Notification No.27/2018
AI-generated summary — verify with the full judgment below
( 2024:HHC:10708 )
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
CWP No. 3750 of 2024
Decided on: 5th November, 2024
M/s Sohan Singh Meet Singh and sons .......petitioner
Versus
Union of India and others
...Respondents
Coram The Hon’ble Mr. Justice Tarlok Singh Chauhan, Acting Chief Justice
The Hon’ble Mr. Justice Satyen Vaidya, Judge.
Whether approved for reporting?1
For the petitioner: Mr. Deepak Kaushal, Senior Advocate with Mr.Abhishek Verma, Advocate.
For the respondents: Mr. Balram Sharma, Dy.SGI with Mr. Rajeev Sharma, Advocate for respondents No.1, 3 and 4. Mr. Anup Rattan, A.G with Mr. Rakesh Dhaulta, Addl. A.G and Ms. Priyanka Chauhan, Dy. A.G. for the respondent-State.
Tarlok Singh Chauhan, ACJ (Oral)
The instant petition has been filed for grant of following substantive reliefs: “i. Issue a writ in the nature of Certiorari for quashing the Notification No.11/2017 Central Tax (Rate) dated 28.06.2017 (Annexure P-1), Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017 (Annexure P-2), Himachal Pradesh Govt. Notification No.11/2017 dated 3
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