Ultratech Cement Limited Vs Union of India And Others (Chhattisgarh High Court)
Hon’ble Chhattisgarh High Court Grants Stay on GST Penalty under Section 74 in Mining Lease Fee Dispute
The petitioner is a manufacturer of cement. It had received mining lease from the State Government of Chattisgarh. It paid upfront fees to the State for the said rights. The Revenue alleged that the petitioner is liable to pay GST (on reverse charge basis) on the said fees. The petitioner paid the said GST amount along with interest before show cause notice itself. However, invoking section 74 of the GST Act, notice was issued proposing equivalent penalty. Demands were confirmed. Appellate authority also upheld invocation of section 74. Hence, writ petition.
The Hon’ble Chattisgarh High Court admitted the petition and granted stay from recovery. It allowed the stay application. It held: (i) there is a vacancy of the State President of the Tribunal; hence; no remedy; (ii) refers to Supreme Court order in Udaipur Chamber case to note that issue relating to applicability of GST and service tax on royalty/ upfront fees is pending before the Apex Court; notices that Gujarat High Court and Delhi High Court had passed interim orders granting stay; (iii) on a plain reading of section 74; it notes that there could not be; prima facie; case of fraud or suppression of facts; (iv) directs Revenue to file reply to the petition.
