Punjab & Haryana HC issued notice of motion on plea challenging validity of levy of tax on the payment of royalty made to the Govt. of Punjab for mineral rights under reverse charge mechanism
The petitioner, M/s Mahadev Enclave Pvt. Ltd has challenged the constitutional validity of Entry 17 (viii) of the Table in Notification No. 11/2017 CT (Rate) dated 28.06.2017 as amended vide Notification No. 27/2018-CT (Rate) dated 31.12.2018 which seeks to levy tax on the royalty payment made to the Govt. of Punjab for mineral rights under reverse charge mechanism
The petitioner also challenged the validity of Circular No. 121/40/2019-GST dated 11.10.2019 being contrary to Entry 50 of the List-II of Seventh Schedule appended to the Constitution of India and for the reason that the tax on mining rights could either be imposed by State Govt. or Central Govt, but not by both concurrently.
A Bench headed by Justice S. Muralidhar heard the submissions of Advocate Sandeep Goyal, alongwith Advocate Rishab Singla, appearing on behalf of Petitioner who contended that the said levy was unconstitutional as the same was in contravention of Entry 50 of List-II of the Seventh Schedule appended to the Constitution of India. Besides, by virtue of the assailed Notification, tax is being levied on land also, which is an immovable property and thus, in contravention of Entry 49 of List-II of the Seventh Schedule appended to the Constitution of India.
After hearing the parties, the Division bench issued notice of motion to the respondents with respect to the reliefs as prayed for.