Lakhwinder Singh Stone Crusher Vs Union of India & ors. (Himachal Pradesh High Court)
In Lakhwinder Singh Stone Crusher Vs. Union of India & Ors., the Himachal Pradesh High Court addressed whether Goods and Services Tax (GST) can be levied on mining royalty paid by mineral concession holders for state-granted mining rights. The petitioner challenged various notifications and notices that imposed GST on the royalty, arguing that such royalty was a tax and, therefore, should not be subject to GST. This argument was based on the Supreme Court’s 1990 decision in India Cement Ltd. v. State of Tamil Nadu, which declared royalty to be a form of tax. The petitioner sought to quash the notifications and stay the GST demand during the pendency of the petition.
However, the court noted that the legal position had changed after the India Cement judgment was overruled by the Supreme Court in Mineral Area Development Authority v. Steel Authority of India (2024). In this case, the nine-judge bench ruled that royalty is not a tax, thereby clearing the way for the levy of GST on the royalty paid by mineral concession holders. The High Court found the demand for GST to be legally valid and upheld the impugned notices and summons issued under the CGST Act. As a result, the petition was dismissed, and the court left the parties to bear their own costs.
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