2022 (5) TMI 533 - HC - GST

Levy of GST - grant of mining lease/royalty - ex-parte order or not - Section 73 of the U.P. GST Act, 2017 - HELD THAT - Matter requires consideration, both on the issue of liability to pay GST and royalty as also as to jurisdictional error in the second proceeding for the same tax period. List on 07.09.2022.

Summary

Issues:
Challenge to appeal order dated 02.07.2021 under Section 73 of the U.P. GST Act, 2017 and ex parte order dated 23.06.2021 by State GST authority for the same tax period of Financial Year 2017-18.

Analysis:
The High Court entertained a writ petition challenging the appeal order dated 02.07.2021 and the ex parte order dated 23.06.2021 concerning the same tax period. The petitioner contests the liability of GST on royalty payment for mining activities. Citing a previous interim order and a Supreme Court decision, it argues that royalty payment is akin to a tax and not subject to GST as it is not consideration for goods or services. The petitioner also highlights a similar issue pending before the Supreme Court in another case. The High Court notes the need for a detailed examination of the liability for GST and royalty, along with a potential jurisdictional error in the second proceeding for the same tax period.

The Court grants the State Standing Counsel six weeks to file a counter affidavit and allows the petitioner two weeks thereafter to file a rejoinder affidavit. The case is listed for further hearing on 07.09.2022. Until further orders, the High Court stays the demand for GST and payment of royalty as per the challenged orders and proceedings initiated based on the notice dated 15.03.2021. The Court's decision indicates a willingness to delve into the complex issues of tax liability and jurisdictional errors raised by the petitioner, emphasizing the importance of a thorough legal analysis in resolving the dispute.