M/S Lakhwinder Singh Stone Crushers vs. Union Of INDIA And Others
Held
The Court held that the question of whether GST can be levied on royalty paid by a mineral concession holder for mining concessions granted by the State is no longer res integra. The Seven-Judge Bench judgment in India Cement Ltd. & Ors. vs. State of Tamil Nadu & Ors. (19901) 1 SCC 12, which declared royalty as a tax, has been overruled by the 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 Supreme Court in the latter case held that royalty is not a tax. Therefore, the respondents are within their rights to levy GST on royalty paid by the mineral concession holder. Consequently, the impugned notices and summons are upheld, and the writ petition is dismissed.
Facts
The petitioner, M/s Lakhwinder Singh Stone Crusher, filed a writ petition challenging various notifications and demand notices related to the levy of GST on royalty paid for mining concessions. The petitioner contended that royalty is a tax, citing the Supreme Court's judgment in India Cement Ltd. & Ors. vs. State of Tamil Nadu & Ors. (19901) 1 SCC 12. The respondents, Union of India and others, sought to levy GST on this royalty. Previously, a Division Bench of the High Court had stayed the demand for GST on royalty based on the India Cement Ltd. judgment.
Key Issues
1. Whether GST can be levied on royalty paid by a mineral concession holder for any mining concession granted by the State, considering the provision of the CGST Act, 2017 and relevant notifications? The petitioner argued that royalty is a tax, relying on the Seven-Judge Bench decision in India Cement Ltd. & Ors. vs. State of Tamil Nadu & Ors. (19901) 1 SCC 12, and therefore, GST should not be leviable on it. The respondents contended that the levy of GST on royalty is permissible under the relevant notifications and the law. They relied on the subsequent judgment of the Nine-Judge Bench of the Supreme Court in Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr., 2024 INSC 554, which overruled the India Cement Ltd. case.
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. 8637/2023 Decided on: 4.11.2024
M/s Lakhwinder Singh Stone Crusher
…..Petitioner
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 Petitioner: Mr. Arvind Sharma, Advocate.
For the Respondents: Mr. Balram Sharma, Dy.S.G.I. with
Mr. Rajeev Sharma, Advocate, for
respondents No. 1, 3 and 4. 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 respondent No.2. ____________________________________________________________________
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 28.06.2017 (Annex
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