M/S Matri Stone Crusher And Ors vs. Union Of INDIA And Ors
Held
The Court held that the question for consideration was whether GST could be levied on royalty paid by a mineral concession holder for mining concessions. The Court noted that the petition was initially based on the Supreme Court judgment in India Cement Ltd. which held royalty to be a tax. However, this judgment has since 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 held that royalty is not a tax. Consequently, the Court found that the respondents are within their rights to levy GST on royalty paid by mineral concession holders. The impugned notices and summons were upheld, and the writ petition was dismissed.
Facts
The petitioners, M/s Matri Stone Crusher & ors., filed a writ petition challenging various notifications and notices issued by the respondents (Union of India & ors.) concerning the levy of Goods and Services Tax (GST) on royalty paid by mineral concession holders. The petitioners sought to quash these notifications and notices, arguing that GST cannot be levied on royalty, which they contended is a form of tax. They also sought a refund of GST/Service Tax paid on royalty to date, amounting to Rs. 37,31,918/-, along with interest. The petition was initially based on a Supreme Court judgment declaring royalty as a tax, which had led to a stay on demand for GST on royalty by a Division Bench of this Court.
Key Issues
1. Whether GST can be levied on royalty paid by a mineral concession holder for any mining concession granted by the State, as per Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017, Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, and corresponding Himachal Pradesh Government notifications, and Notification No. 27/2018 TFL Central Tax (Rate) dated 31.12.2018 and its Himachal Pradesh counterpart. Petitioner's contention: GST cannot be levied on royalty as royalty is a tax. They relied on the Supreme Court judgment in India Cement Ltd. and ors. vs. State of Tamil Nadu and ors. (19901) 1 SCC 12. Respondent's contention: The respondents argued that they are within their rights to levy GST on royalty.
Sections Cited
Section 70
AI-generated summary — verify with the full judgment below
2024:HHC:10578 IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA
CWP No. 139/2024 Decided on: 4.11.2024
M/s Matri Stone Crusher & ors.
…..Petitioners
Versus
Union of India & ors.
….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?1No
For the Petitioners: Mr. Arvind Sharma, Advocate.
For the Respondents: Mr. Balram Sharma, Dy.S.G.I. with
Mr. Rajeev Sharma, Advocate, for
respondents No. 1 and 3. Mr. Anup Rattan, A.G. with Mr. Rakesh
Dhaulta, Mr. Pranay Pratap Singh,
Mr. Sushant Kaprate, Addl. A.Gs., Mr. Arsh
Rattan and Ms. Priyanka Chauhan, Dy.A.Gs.,
for respondents No.2 and 4. ____________________________________________________________________
Justice Tarlok Singh Chauhan, Acting Chief Justice (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 28.06.201
The judgment continues below.
Read the full judgment
A free account opens 10 full GST judgments a month (one account works on both bharattax.net and this site). Re-reading one you have already opened does not count again.
The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.
Reproduced from the public record of the Himachal Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.