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Case Law Details

Case Name : C. Srinivasa Moorthy Vs Deputy State Tax Officer (Madras High Court)
Appeal Number : W. P. No.12426 of 2024
Date of Judgement/Order : 07/06/2024
Related Assessment Year :
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C. Srinivasa Moorthy Vs Deputy State Tax Officer (Madras High Court)

In the case of C. Srinivasa Moorthy vs. Deputy State Tax Officer, the petitioner challenged an intimation regarding GST liability imposed on seigniorage fee and mining lease amounts paid to the Government under applicable GST laws. Here’s a detailed summary of the case:

Background: The petitioner contested the communication of GST liability on payments made for seigniorage fee and mining lease to the Government. The petitioner’s argument rested on Notification No.13/2017 – Central Tax (Rate), which excludes GST on services provided by the Central, State Government, or local authorities through renting of immovable property. Additionally, the petitioner cited interim orders from the Supreme Court, particularly in SLP(C) No. 37326 of 2017, where an interim stay was granted on GST imposition not only on royalty but also on mining leases pending a decision by a nine-judge Constitution Bench.

Legal Precedents: The petitioner’s counsel also referenced a Division Bench judgment in Venkatachalam v. Assistant Commissioner (ST), Palladam, which provided directions regarding the adjudication of show cause notices related to similar issues. The Division Bench had instructed that objections or representations should be submitted within four weeks of receiving the court order. It further mandated that adjudication should proceed only after affording a reasonable opportunity for the petitioners to be heard, and any orders were to be held in abeyance until the nine-judge bench’s decision regarding the nature of royalty.

Court’s Decision: Considering the principles laid down in the Venkatachalam case, the Madras High Court disposed of the present writ petition under similar terms. It allowed the petitioner a period of four weeks to submit a reply to the GST liability intimation received. The court reiterated that pending a decision by the nine-judge Constitution Bench on the nature of royalty and related issues, no recovery of GST on seigniorage fee or mining lease should be undertaken. The petitioner was also granted liberty to pursue appropriate remedies after the outcome of the nine-judge bench’s decision.

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