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2023 (12) TMI 360 - HC - GSTImposition of GST - grant of lease/royalty by the petitioner - HELD THAT - In the wake of preceding discussion, the impugned order dated 02.08.2023 shall remain stayed till the next date of listing. Connect this matter with Writ Tax No.606 of 2023 (M/s Amorous Trading India Private Limited v. State of U.P. and 2 others).
Issues involved: Challenge to imposition of GST on grant of lease/royalty; Nature of royalty payment as tax or consideration; Stay on payment of GST pending decision.
Challenge to imposition of GST on grant of lease/royalty: The petitioner challenged the imposition of GST for grant of lease/royalty, contending that royalty is in the nature of tax and thus not liable for GST payment. The petitioner relied on the judgment in India Cement Ltd. and others v. State of Tamil Nadu and others (1990) 1 SCC 12, and the order in M/s Lakhwinder Singh v. Union of India and others in Writ Petition (Civil) No.1076 of 2021. Nature of royalty payment as tax or consideration: The Division Bench of the Court considered the nature of royalty payment, with the petitioner arguing that it is a tax and not consideration for the privilege granted by the State. Citing the India Cement Ltd. case, it was asserted that royalty payment is not amenable to GST as it does not relate to the sale of goods or services provided. The Supreme Court's attention to a similar controversy in M/s Lakhwinder Singh v. Union of India & Ors. was highlighted, where a stay on GST payment for grant of mining lease/royalty was ordered until further notice. Stay on payment of GST pending decision: The Court ordered a stay on the payment of GST for grant of mining lease/royalty by the petitioner until further orders, referencing the pending Writ Tax No. 606 of 2023 and the petitioner's challenge to the quantum of royalty imposed in Writ-C No. 8700 of 2023 (Ateequllah v. Union of India and 3 others). The impugned order was stayed until the next listing date, with directions for filing counter affidavits and subsequent proceedings.
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