2020 (10) TMI 1263 - HC - Service Tax

Maintainability of petition - availability of alternative remedy of appeal - Levy of service tax - royalty and allied charges paid by the petitioner on the minerals extracted by virtue of granting of mining lease by the Government - HELD THAT - If the order impugned is appealable, we relegate the petitioner to approach the appropriate forum in accordance with law. At this point of time, Mr. A.K. Mohanty, learned counsel for the petitioner contended that the petitioner has no objection to approach the appropriate forum under the provisions of law, but the pre-condition of entertaining the appeal is to deposit 75% of the demanded amount, which will cause prejudice to the petitioner. Therefore, the petitioner has approached this Court by filing the present writ petition. Petition disposed off.

Summary

Issues:
- Imposition of service tax on royalty and allied charges paid by the petitioner on minerals extracted by virtue of a mining lease granted by the Government.

Analysis:
The petitioner, a private limited company, challenged the imposition of service tax on royalty and allied charges paid for minerals extracted from iron ore mines in Odisha. The government contended that the grant of the right to mine constituted a service under Section 66D of the Finance Act, 1994. The petitioner argued that royalty is not a payment for a taxable service but a statutory levy under the Mines and Minerals Act, representing the state's share in minerals. The petitioner cited pending cases before the Apex Court regarding the nature of mining royalty as a tax. The Revenue Department insisted that the order was appealable, urging the petitioner to follow the appellate process.

The High Court, after considering the arguments, decided to relegate the petitioner to the appropriate appellate forum if the order was appealable. The petitioner expressed willingness to approach the appellate forum but objected to the pre-condition of depositing 75% of the demanded amount. The court acknowledged the pending adjudication at the Apex Court regarding the levy of service tax on mining royalty and advised the petitioner to file an interlocutory application before the appellate authority seeking waiver of the pre-deposit amount. The court instructed the petitioner to file an appeal within 15 days and assured that the appellate authority would consider the application in light of the Apex Court's orders.

In conclusion, the High Court disposed of the writ petition, directing the petitioner to utilize the soft copy of the order due to the ongoing COVID-19 pandemic situation. The court emphasized the importance of following the prescribed procedures for filing appeals and seeking appropriate relief in accordance with the law.