Can GST and Service Tax be charge on the amount of royalty payable to the Government on mining of minerals?

Can GST and Service Tax be charge

Case Title

M/s Manu Tractors vs State of UP & 2 Others.

Court

Allahabad High Court

Honorable Judges

Justice Surya Prakash Kesarwani & Justice Jayant Banerji

Citation

2022 (5) GSTPanacea 246 HC Allahabad

Writ Tax No 772 of 2022

Judgement Date

24-May-2022

Council for Petitioner

Shubham Agarwal

Council for Respondent

C.S.C.

Section

Section 74(1) of the GST Act

In Favour of

Favour of Assessee

The Allahabad High Court bench of Justice Surya Prakash Kesarwani & Justice Jayant Banerji has held that the petitioner has granted interim order in terms of the aforequoted interim order passed in the case of M/S Silverline Automobiles (supra). Until further orders, payment of GST for grant of mining lease/royalty by the petitioner & the demand notices dated 07.01.2022 and 18.01.2022 under Section 74(1) of the CGST/UPGST Act, shall remain stayed.

Can GST and Service Tax be charge

FACTS OF THE CASE

Writ petition has been filed praying for the following reliefs:

Issue a writ, order or direction in the nature of Certiorari quashing the impugned orders dated 8.2.22, 21.4.22, 20.04.22, 17.1.22, and 17.1.22 for the period Feb-Mar20, Apr-Nov 20, Mar 21, June 21 and July 21 passed under Section 74(9) of the GST Act.

Issue a writ, order or direction in the nature of Certiorari quashing the purported clarification with respect to levy of GST on mining activity w.e.f. 01.07.2017 as contained in item H6 of the Press Release issued pursuant to the 45th meeting of the GST Council on 17.09.2021.”

As per impugned order the petitioner has not paid G.S.T. on the amount of royalty. The petitioner denies his liability of G.S.T. on royalty.

Can GST and Service Tax be charge

COURT HELD

Considering the facts as recorded, held that the petitioner is also entitled to interim order in terms of the aforequoted interim order passed in the case of M/S Silverline Automobiles (supra) and accordingly interim order is granted.

In view of the aforesaid, as an interim measure, the demand notices dated 07.01.2022 and 18.01.2022 for the months July 2017 to March 2018 under Section 74(1) of the CGST/UPGST Act, shall remain stayed.

Until further orders, payment of GST for grant of mining lease/royalty by the petitioner shall remain stayed.

Can GST and Service Tax be charge

ANALYSIS OF THE JUDGEMENT

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.

In view of the aforesaid, as an interim measure, it is provided that until further orders of this Court, the demand notices dated 07.01.2022 and 18.01.2022 for the months July 2017 to March 2018 under Section 74(1) of the CGST/UPGST Act, shall remain stayed.

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M/s Manu Tractors

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Allahabad High Court