M/S Jakhra Mines And Minerals vs. Union Of INDIA And Others
Held
The Court held that the levy of GST on royalty paid by a mineral concession holder for mining concessions granted by the State is permissible. This decision is based on the Supreme Court's judgment in Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr., 2024 INSC 554, which overruled the earlier judgment in India Cement Ltd. and ors. vs. State of Tamil Nadu and ors. (19901) 1 SCC 12. The Supreme Court in the latter case clarified that royalty is not a tax. Consequently, the respondents are within their rights to levy GST on royalty. The Court upheld the impugned notices dated 15.02.2024 and 15.03.2024 and dismissed the writ petition. The ratio decidendi is that royalty is not a tax, and therefore, GST can be levied on it, following the latest pronouncement of the Supreme Court.
Facts
The petitioner, M/s Jakhra Mines and Minerals, filed a writ petition challenging several notifications related to the levy of Goods and Services Tax (GST) on royalty paid for mining concessions granted by the State. The petitioner sought to quash these notifications and recover amounts already collected as GST 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 vs. M/s Steel Authority of India.
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 decision in Mineral Area Development Authority vs. M/s Steel Authority of India, which overruled the earlier judgment in India Cement Ltd. vs. State of Tamil Nadu. Petitioner's Contention: The petitioner argued that royalty is a tax, relying on the Supreme Court's decision in India Cement Ltd. and ors. vs. State of Tamil Nadu and ors. (19901) 1 SCC 12, and therefore, GST should not be levied on it. Respondents' Contention: The respondents contended that the levy of GST on royalty is permissible, as the Supreme Court in Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr., 2024 INSC 554, has held that royalty is not a tax, thereby overruling the precedent relied upon by the petitioner.
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:10706 )
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
CWP No. 3753 of 2024
Decided on: 5th November, 2024
M/s Jakhra Mines and Minerals .......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-5), Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017 (Annexure P-6), Himachal Pradesh Govt. Notification No.11/2017 dated 3
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