2022 (2) TMI 294 - HC - GST

Levy of GST - minerals on which already royalty has been paid - HELD THAT - Since the very issue as to whether GST would be chargeable on minerals on which already royalty has been paid is actively under consideration before a Nine Judges Bench of the Hon ble Supreme Court, in M/S. LAKHWINDER SINGH VERSUS UNION OF INDIA ORS. 2021 (11) TMI 336 - SC ORDER in the present matter, the petitioner has made out a case for interim order - it was held in the said case that Until further orders, payment of GST for grant of mining lease/royalty by the petitioner shall remain stayed. The matter be listed after disposal of Writ Petition in M/S. LAKHWINDER SINGH VERSUS UNION OF INDIA ORS. 2021 (11) TMI 336 - SC ORDER - In the meantime, there shall be stay of the notice dated 02.12.2021 issued to the petitioner, which is impugned in the present writ petition.

Summary

Issues:
1. Challenge to notice under Section 73 of APGST Act, 2017 for payment of GST on minerals already subject to royalty charges.

Analysis:
The petitioner sought a direction to declare the notice under Section 73 of APGST Act, 2017, dated 02.12.2021, asking for GST payment on minerals as arbitrary, illegal, ultra vires, and unconstitutional. The petitioner argued that royalty charges for the extracted minerals had already been paid. Citing the case of Mineral Area Development Authority & Ors. v. Steel Authority of India & Ors., (2011) 4 SCC 450, the petitioner's counsel highlighted a conflict referred to a Nine Judges Bench of the Supreme Court. Referring to the case of M/s. Lakhwinder Singh v. Union of India & Others, where the Supreme Court stayed GST payment for grant of mining lease/royalty, the petitioner requested similar interim protection. Additionally, it was noted that in a similar matter, interim stay had been granted by the Court suspending the impugned show cause notice.

The Government Pleader, Commercial Tax, clarified that only the impugned notice had been issued. Considering the ongoing consideration of whether GST should be charged on minerals where royalty has been paid by a Nine Judges Bench of the Supreme Court, the Court found merit in granting an interim order in favor of the petitioner. Consequently, the Court decided to list the matter after the disposal of specific cases before the Supreme Court and ordered a stay on the notice dated 02.12.2021 issued to the petitioner. The parties were allowed to mention the matter after the disposal of cases before the Supreme Court, and instructions were given to complete the pleadings in the meantime.