Case Law Details
Guruvayurappan Blue Metal Vs State Tax Officer (Madras High Court)
Summary: The Madras High Court disposed of writ petitions challenging orders dated 11.11.2025 passed under the GST enactments concerning levy of GST on seigniorage fee/royalty for quarrying and transporting mines and minerals under the Reverse Charge Mechanism (RCM). The petitioner had neither obtained GST registration nor paid GST on royalty/seigniorage fees and had also not made contributions to the District Mineral Foundation Trust (DMFT). The petitioner relied on an earlier decision of the High Court in Pichandhi, Proprietor of Sri Murugan Ready Mix Concrete and Blue Metal Industries v. Deputy State Tax Officer, where similar proceedings relating to GST on royalty for quarrying and transportation of minerals were kept in abeyance because the issue was pending before the Supreme Court. In that earlier case, the Court directed the authorities to await the Supreme Court’s decision while requiring the petitioner to deposit 10% of the disputed tax as security. Observing that the facts in the present matter were almost identical, the Court held that the earlier order would equally apply to these petitions. Accordingly, the writ petitions were disposed of on the same terms, with no order as to costs, and connected miscellaneous petitions were closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mrs.K.Vasanthamala, learned Government Advocate takes notice for the Respondent.
2. These Writ Petitions are being disposed of at the time of admission with the consent of the learned counsel for the Petitioner and the learned Government Advocate for the Respondent.
3. In these Writ Petitions, the Petitioner has challenged the impugned order(s) passed by the Respondent in Reference No.33AAJCS4031P1Z4/2021-2022 and Reference No.33AAJCS4031P1Z4/2022-2023 dated 11.11.2025 under the provisions of the respective GST Enactments.
4. The Petitioner has not obtained registration and has not paid GST to the Government on the Seigniorage fee/Royalty for quarrying and transporting of mines and minerals under the Reverse Charge Mechanism (RCM). The Petitioner had also not made any contributions to the District Mineral Foundation Trust (DMFT).
5. Under similar circumstances, this Court has passed orders by remitting the case back subject to the outcome of the decision of the Hon’ble Supreme Court regarding the dispute relating to levy of GST on the Seigniorage fee/Royalty paid for quarrying mines and minerals. In this connection, a reference is made to the decision of this Court in Pichandhi, Proprietor of Sri Murugan Ready Mix Concrete and Blue Metal Industries, Vellore Vs. The Deputy State Tax Officer, Vellore Rural Assessment Circle, Vellore, in W.P.Nos.35883 and 35889 of 2025 dated 25.09.2025. Relevant portion of the order is reproduced below:-
“3. In these Writ Petitions, the Petitioner has challenged the impugned Notices in FORM GST DRC-01A dated 16.06.2025 for the Tax Period 2021-2022 and 2020-2021 respectively.
4. The learned counsel for the Petitioner submits that the issue is now pending before the Hon’ble Supreme Court, as the dispute pertains to levyof GST on the Seigniorage fee/Royalty paid for quarrying and transporting mineral.
5. Considering the fact that the issue is pending before the Hon’ble Supreme Court, I am inclined to dispose of these Writ Petitions at the admission stage, by directing the Respondent to keep all the proceedings in abeyance.
6. The Respondent shall await the orders to be passed by the Hon’ble Supreme Court and thereafter proceed in accordance with law. The Petitioner shall however deposit 10% of the disputed tax as security, in line with the directions issued in the Petitioner’s own case earlier.”
6. Considering the facts and circumstances of the above case in W.P.Nos.35883 and 35889 of 2025, which are almost identical to the facts of the present cases, this Court is of the view that the aforesaid order will hold good in respect of the present Writ Petitions also. Accordingly, these Writ Petitions stand disposed of on the same terms. No costs. Connected Writ Miscellaneous Petitions are closed.
