Case Law Details
Shree Basant Bhandar Int Udyog Vs Union of India (Rajasthan High Court)
This bunch of writ petitions primarily involves the issue of permissibility of raising demand of GST on royalty. The petitioners in these petitions have challenged the notifications whereby, royalty paid by them on mining activity is being subjected to GST and/or notices issued for alleged incriminating discrepancies in returns after scrutiny and analogous proceedings.
In the case of M/s Shivalik Silica Vs. Union of India & Ors. (D.B. Civil Writ Petition No.14849/2021) decided on 17.12.2021, Division Bench of this Court examined the issue of service tax on royalty, and held that as this Court had already decided this issue against the assessee in the case of Udaipur Chambers of Commerce & Industry Vs. Union of India reported in 2018 (8) G.S.T.L. 170 (Rajasthan), and even though the same controversy is under consideration of a larger Bench of nine Hon’ble Judges of Hon’ble Supreme Court in the case of Mineral Area Development Authority etc. Vs. M/s. Steel Authority of India and Ors. and finally, the assessee was denied the relief sought for. Based on the rejection of the writ petition in the case of Shivalik Silica, Coordinate Division Bench at Rajasthan High Court, Bench Jaipur in a similar matter, has rejected the prayer for interim relief to the extent of proceedings initiated against the assessee for recovery of GST on royalty vide order dated 17.12.2021 passed in M/s Shivalik Silica Vs. Union of India & Ors. (D.B. Civil Writ Petition No.14849/2021).
This Court is apprised that the judgment rendered by the Division Bench of this Court in the case of Udaipur Chambers of Commerce & Industry (supra), and which was relied upon in the case of M/s Shivalik Silica (supra), has been subjected to challenge before Hon’ble Supreme Court by way of Special Leave to Appeal No.37326/2017 wherein Hon’ble Supreme Court has stayed payment of service tax for grant of mining lease/royalty. Thus, for all purposes, effect of the judgment of the Division Bench in the case of Udaipur Chambers of Commerce & Industry (supra) remains in abeyance.
In this background, we are not persuaded by the argument advanced by the learned counsel for the respondents that the prayer for interim relief in these petitions should be turned down on the basis of the order dated order dated 17.12.2021 passed in D.B. Civil Writ Petition No.14849/2021 more so, when replies are still awaited in these writ petitions.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
