2021 (4) TMI 833 - HC - Service Tax

Levy of Service Tax - Royalty and District Mineral Fund - period April, 2016 to June, 2017 - HELD THAT - Let this matter be tagged along with SUNITA GANGULY, WIFE OF SHRI ARDHENDU GANGULY VERSUS PRINCIPAL COMMISSIONER, CENTRAL GST CENTRAL EXCISE, SUPERINTENDENT (PREV) , CENTRAL GOODS AND SERVICE TAX CENTRAL EXCISE, THE STATE OF JHARKHAND 2021 (3) TMI 601 - JHARKHAND HIGH COURT , since the issues are common. List these cases accordingly.

Summary

Issues involved:
Levy of service tax on Royalty and District Mineral Fund for the period April 2016 to June 2017; Tagging the case with other analogous cases; Granting interim protection similar to previous orders; Distinction between service tax on royalty and CGST/JGST levy.

Levy of Service Tax on Royalty and District Mineral Fund:
The petitioner, a lessee of minor mineral in Palamau district, challenged the levy of service tax on Royalty and District Mineral Fund for the period April 2016 to June 2017. The counsel for the petitioner requested the matter to be placed with other similar cases and sought interim relief similar to a previous order. The Court granted two weeks to the respondents to file a counter affidavit and allowed the petitioner to reply within one week thereafter. The case was tagged with other similar cases due to common issues.

Tagging with Analogous Cases and Interim Relief:
The Court decided to tag the present case with W.P.(T) No. 3878 of 2020 and granted interim protection in line with a previous order dated 2nd March, 2021. The interim protection stayed the recovery of service tax for grant of mining lease/royalty, while allowing the revenue to conduct and complete assessment proceedings. However, the Court clarified that no interim protection was granted regarding the levy of CGST and/or JGST at that stage. The Court referred to similar interim orders passed by other High Courts on the issue of service tax on royalty.

Distinction between Service Tax on Royalty and CGST/JGST Levy:
The Court highlighted the distinction between the interim protection granted for service tax on royalty and the absence of any interim protection for CGST and JGST levy. While staying the recovery of service tax on royalty, the Court did not find a case for granting similar interim protection for CGST and JGST. The Court referenced the approach taken by other High Courts in similar matters and emphasized the need to differentiate between the two aspects in the present case.

This detailed analysis of the judgment from the Jharkhand High Court provides insights into the issues of levy of service tax on Royalty and District Mineral Fund, tagging with analogous cases, granting interim relief, and distinguishing between service tax on royalty and CGST/JGST levy as addressed by the Court.