Facts of the Case

The petitioner, M/s Shri Bherunath Mines Pvt. Ltd., having its principal place of business at Sardulkhera, Rajsamand, Rajasthan, challenged show-cause notices/assessment orders issued by the GST Department raising a demand of GST on royalty paid by the petitioner to the State Mining Department towards its mining lease.

Issues Involved

  1. Whether GST could validly be levied on royalty paid by a mining lessee to the Mining Department in respect of a mining lease.

Petitioner's Arguments

  • The petitioner's counsel, upon being confronted with the Court's earlier rulings on the identical issue, was unable to dispute that the question of GST on royalty paid towards a mining lease already stood decided against similarly placed taxpayers by the same Court.

Respondent's Arguments

  • Learned AAG for the Union of India submitted that the issue raised in the petition was already decided by the same Court's Division Bench in Shree Basant Bhandar Int Udyog v. UOI & Ors. (D.B. Civil Writ Petition No.5678/2022, decided 29.09.2022) and other connected writ petitions, relying on an earlier decision in Sudershan Lal Gupta v. Union of India & Ors. (D.B. Civil Writ Petition No.8109/2022, decided 27.09.2022), which held that the imposition of GST on royalty was not liable to be interfered with.

Court Order / Findings

  • The Court held that the issue of GST demand on royalty paid to the Mining Department towards a mining lease already stood decided by the same Court in Sudershan Lal Gupta and Shree Basant Bhandar Int Udyog, and since the petitioner's counsel was unable to dispute this, the writ petition was liable to be dismissed in terms of those judgments.
  • The writ petition was accordingly dismissed, applying the binding precedent of the coordinate Division Bench rulings.

Important Clarification

Where a High Court's Division Bench has already settled, in earlier binding rulings, that the imposition of GST on royalty paid for a mining lease is not liable to interference, subsequent writ petitions raising the identical question will be dismissed by simply applying that precedent, without independent re-examination of the underlying legal controversy.

Sections Involved

  • Central Goods and Services Tax Act, 2017 – under which GST was demanded on royalty paid by the petitioner to the State Mining Department for its mining lease.

Decision – In Favour of

The decision was in favour of the Department, with the writ petition challenging the levy of GST on mining royalty dismissed, following binding coordinate-bench precedent.

Case Details

  • Court: High Court of Judicature for Rajasthan at Jodhpur
  • Case Number: D.B. Civil Writ Petition No. 4317/2023
  • Coram: Hon'ble Mr. Justice Vijay Bishnoi and Hon'ble Mr. Justice Yogendra Kumar Purohit
  • Date of Order: 04 May 2023

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