2024 (11) TMI 378 - HC - GST

Levy of GST on Royalty paid by a Mineral Concession Holder for any mining concession granted by the State - Constitutional validity of N/N. 11/2017-Central Tax (Rate) dated 28.06.2017, N/N. 1/2017-Central Tax (Rate) dated 28.06.2017 (Annexure P-2), Himachal Pradesh Govt. N/N. 11/2017 dated 30.06.2017, Himachal Pradesh Govt. N/N. 1/2017 dated 30.06.2017, N/N. 27/2018-Central Tax (Rate) dated 31.12.2018 and Himachal Pradesh Govt. N/N. 27/2018 dated 31.12.2018 - HELD THAT - It is not in dispute that the judgment rendered in INDIA CEMENT LIMITED VERSUS STATE OF TAMIL NADU 1989 (10) TMI 53 - SUPREME COURT has now been overruled by Nine-Judge Bench of the Hon ble Supreme Court in MINERAL AREA DEVELOPMENT AUTHORITY ANR. VERSUS M/S STEEL AUTHORITY OF INDIA ANR ETC. 2024 (7) TMI 1390 - SUPREME COURT (LB) , wherein it has been held that royalty is not a tax. Therefore, the respondents are well within their rights to levy GST on the royalty paid by the mineral concession holder for any mining concession granted by the State. The orders impugned herein i.e. notice dated 16.02.2024 (Annexure P-11) and summon dated 15.03.2024 (Annexure P-15) are upheld and the instant petition is accordingly dismissed.

Summary

The petition sought to quash notifications imposing GST on royalty paid by mineral concession holders. The High Court upheld the legality of levying GST on royalty following the overruling of a previous judgment. The court dismissed the petition and upheld the impugned orders.