South Eastern Coal Field Ltd. Vs Commissioner of CGST And Central Excise (Madhya Pradesh High Court)
The petitioners challenged Orders-in-Original dated 29.12.2022, 27.12.2022, 21.12.2023, and 28.12.2023 through writ petitions under Article 226 of the Constitution, despite the availability of an appellate remedy under Section 107 of the CGST Act. The dispute concerned the levy of service tax under the Reverse Charge Mechanism (RCM) on payments made under the Madhya Pradesh Gramin Avsanrachna Tatha Sadak Vikas Adhiniyam, 2005 (MPGASTVA).
The petitioner, a coal mining company operating in Madhya Pradesh and Chhattisgarh, had paid royalty, dead rent, District Mineral Foundation (DMF), National Mineral Exploration Trust (NMET) contributions, and amounts under MPGASTVA, 2005. A show cause notice alleged that payments made under MPGASTVA were in the nature of a “fee” rather than a “tax” and therefore constituted consideration for services provided by the State Government, making them liable to service tax under RCM.
The petitioner contended that a previous Division Bench decision in M/s Neogy & Sons v. State of Madhya Pradesh had already held that the levy under MPGASTVA was a “tax on land” under Entry 49 of List II of the Seventh Schedule to the Constitution. According to the petitioner, since service tax cannot be levied on an amount that is itself a tax, the GST authorities acted contrary to a binding precedent while confirming the demand.
