Facts of the Case

The petitioner, Mahalaxmi Minerals, Jaipur, filed the present writ petition challenging the imposition of service tax/GST on royalty paid for mining rights. When the matter was taken up, the learned Additional Solicitor General of India pointed out that the identical issue had already been decided by the Rajasthan High Court on more than one occasion, including in a Division Bench order dated 27.09.2022 in Sudershan Lal Gupta Contractor v. Union of India (D.B. Civil Writ Petition No.8109/2022 and batch).

Issues Involved

  1. Whether the levy of GST on royalty paid for mining rights survived challenge in light of the Division Bench's ruling in Sudershan Lal Gupta Contractor and other connected decisions.

Petitioner's Arguments

No appearance was recorded on behalf of the petitioner at the hearing; the relief sought in the petition was a declaration invalidating the levy of GST/service tax on mining royalty.

Respondent's Arguments

  • The Additional Solicitor General submitted that the challenge to imposition of GST on royalty had already been decided against similarly-placed petitioners by the Division Bench in Sudershan Lal Gupta Contractor and various other decisions of the Court.

Court Order / Findings

  • Taking into consideration the relief sought and the Division Bench's order dated 27.09.2022 in Sudershan Lal Gupta Contractor v. Union of India and connected decisions, the Court held that the petition did not survive insofar as the challenge to imposition of GST on royalty was concerned, and dismissed it.

Important Clarification

  • The Rajasthan High Court has consistently declined to entertain fresh challenges to the levy of GST on mining royalty, treating the issue as settled by its Division Bench ruling in Sudershan Lal Gupta Contractor and connected matters — a mining lessee/contractor raising an identical challenge in that jurisdiction is unlikely to succeed absent a distinguishing feature or a superior court ruling to the contrary.

Sections Involved

  • Goods and Services Tax (levy on royalty under reverse charge) – the substantive levy challenged, treated as GST payable by the mining lessee on royalty paid to the Government for mining rights.

Decision – In Favour of

The decision is in favour of the Department — the challenge to GST on mining royalty was dismissed as not surviving, following binding Division Bench precedent.

Case Details

Court: High Court of Judicature for Rajasthan, Bench at Jaipur
Case No.: D.B. Civil Writ Petition No. 6853/2022
Coram: Acting Chief Justice Manindra Mohan Shrivastava and Justice Anil Kumar Upman
Date of Order: 29.05.2023

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