2022 (1) TMI 608 - HC - GST

Levy of GST - amount of Royalty and District Mineral Fund Contribution paid by them to the State of Jharkhand in respect of minor mineral lease - reverse charge mechanism - HELD THAT - Apex Court in M/S. LAKHWINDER SINGH VERSUS UNION OF INDIA ORS. 2021 (11) TMI 336 - SC ORDER , that the petitioners herein, lessee of minor mineral, also raised similar issues of levy of GST on royalty and District Mineral Fund Contribution, we deem it proper to grant similar interim relief (s) to the petitioners herein. Learned counsel for the Respondent CGST and State of Jharkhand are allowed three weeks' time to file counter affidavit in the matter. One week time thereafter is allowed to the learned counsel for the petitioners to file reply, if so advised. Petition disposed off.

Summary

Issues:
Writ petitions involving the levy of goods and service tax under Reverse Charge Mechanism on Royalty and District Mineral Fund Contribution paid by petitioners to the State of Jharkhand for mining leases of stone boulders.

Analysis:

1. Levy of GST on Royalty and District Mineral Fund Contribution:
- The petitioners in multiple writ petitions sought a declaration that no GST is leviable on the amount of Royalty and District Mineral Fund Contribution paid to the State of Jharkhand for mining leases of stone boulders.
- Notices issued by Respondents holding liability towards payment of GST under Reverse Charge Mechanism were challenged by the petitioners.
- The High Court had earlier stayed the recovery of service tax for grant of mining lease/royalty from the petitioners, indicating a similar approach to other High Courts on the issue.
- The Supreme Court allowed withdrawal of Special Leave Petitions against the refusal of interim protection for CGST and/or JGST levy, with a stay on payment of GST for mining lease/royalty granted in a related case.
- Considering the similar issues raised by the petitioners and the interim relief granted by the Apex Court in another case, the High Court deemed it proper to grant interim relief by staying the payment of GST for mining lease/royalty by the petitioners until further orders.

2. Interim Relief and Counter Affidavit:
- The Respondents did not dispute the stay granted by the Apex Court on the payment of GST for mining lease/royalty in similar cases.
- In light of the interim protection granted by the Apex Court in a related case and the common issues raised by the petitioners, the High Court granted similar interim relief to the petitioners.
- The Respondent CGST and State of Jharkhand were given three weeks to file a counter affidavit, with the petitioners allowed one week thereafter to file a reply.
- The writ petitions were tagged along with a previous case where similar issues were involved for consolidated listing and consideration.

This detailed analysis outlines the key legal issues, court orders, and submissions made by both parties, resulting in the grant of interim relief to the petitioners regarding the levy of GST on Royalty and District Mineral Fund Contribution paid for mining leases in Jharkhand.