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2022 (5) TMI 1296 - HC - GSTLevy of GST - royalty payable to the Government on mining of minerals - petitioner denies his liability of G.S.T. on royalty - HELD THAT - Similar issue decided in the case of M/S SILVERLINE AUTOMOBILES VERSUS STATE OF UP AND 3 OTHERS 2022 (3) TMI 1048 - ALLAHABAD HIGH COURT where it was held that Since in similar matters, interim orders have been passed by this Court in the light of interim orders passed by Hon'ble Supreme Court, therefore, the petitioner is also entitled for interim relief. Considering the facts and circumstances of the case, the petitioner is also entitled to interim order in terms of the aforequoted interim order passed in the case of M/S Silverline Automobiles - application allowed.
Issues:
1. Whether GST is applicable on royalty payments for mining activities. 2. Validity of impugned orders dated 8.2.22, 21.4.22, 20.04.22, 17.1.22, and 17.1.22 under Section 74(9) of the GST Act. 3. Legality of clarification on GST levy for mining activities from 01.07.2017. 4. Similarity with WRIT TAX No. - 270 of 2022 (M/S Silverline Automobiles Vs. State Of U P And 3 Others). 5. Reference to larger Bench by the Supreme Court regarding the nature of royalty payments. 6. Interim orders passed by the High Court and Supreme Court regarding the applicability of GST on mining lease/royalty payments. Analysis: 1. The primary issue in this case revolves around the applicability of GST on royalty payments for mining activities. The petitioner denies liability for GST on royalty and seeks relief through a writ petition to quash the impugned orders and clarification related to GST levy on mining activities. 2. The petitioner challenges the validity of orders dated 8.2.22, 21.4.22, 20.04.22, 17.1.22, and 17.1.22 under Section 74(9) of the GST Act. The court considers similar matters, including WRIT TAX No. - 270 of 2022, where relief was sought to quash the clarification on GST levy for mining activities from 01.07.2017. 3. The court refers to interim orders passed in other cases, highlighting the question of whether GST and Service Tax are chargeable on royalty payments for mining activities. The petitioner cites Supreme Court orders and argues that royalty payments are in the nature of tax, not consideration for goods or services, thereby not subject to GST. 4. In light of interim orders passed by the Supreme Court and previous High Court judgments, the court grants interim relief to the petitioner, staying the demand notices and proceedings related to GST on mining lease/royalty payments until further orders. 5. The court directs the respondents to file counter affidavits within three weeks, allowing the petitioner to file a rejoinder affidavit thereafter. The case is listed for further proceedings after four weeks, along with other similar writ petitions, maintaining the stay on the demand notices and proceedings. 6. Considering the facts and circumstances of the case, the court grants interim relief to the petitioner, aligning with previous interim orders passed in similar matters. The court emphasizes the need for a comprehensive examination of the issue regarding the applicability of GST on royalty payments for mining activities.
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