Facts of the Case

The petitioner, Sabu Devi, acting through her power of attorney holder, challenged show cause notices and assessment orders issued by the GST Department raising a demand of GST on royalty paid to the Mining Department towards a mining lease. The Additional Advocate General for the State pointed out that the identical issue had already been decided against similarly placed petitioners by a Division Bench of the same Court in Shree Basant Bhandar Int Udyog v. Union of India (D.B. Civil Writ Petition No.5678/2022, order dated 29.09.2022), which itself relied on the earlier bunch decision in Sudershan Lal Gupta v. Union of India (D.B. Civil Writ Petition No.8109/2022, Jaipur Bench, order dated 27.09.2022), holding that the levy of GST on royalty could not be interfered with.

Issues Involved

  1. Whether the levy of GST on royalty paid to the State Mining Department for a mining lease was sustainable, in light of the Court's own earlier Division Bench rulings on the identical question.

Petitioner's Arguments

  • Learned counsel for the petitioners were unable to dispute that the identical question — GST on royalty paid for a mining lease — stood already decided against similarly situated petitioners in Sudershan Lal Gupta and Shree Basant Bhandar Int Udyog.

Respondent's Arguments

  • The Additional Advocate General submitted that the issue was squarely covered by the Division Bench rulings in Sudershan Lal Gupta and Shree Basant Bhandar Int Udyog, both of which upheld the imposition of GST on royalty on identical facts.

Court Order / Findings

  • Since the petitioners' counsel could not dispute that the question was already settled against them by two Division Bench decisions of the same Court on identical facts, the Court found no independent ground to depart from that view.
  • The writ petitions were dismissed in terms of the orders passed in Sudershan Lal Gupta and Shree Basant Bhandar Int Udyog, upholding the levy of GST on royalty paid for the mining lease.
  • The connected stay petition was also dismissed.

Important Clarification

GST is leviable on royalty paid to a State Mining Department for the grant of a mining lease, treated as consideration for a taxable supply of service by the Government; this position has been consistently upheld by the Rajasthan High Court across multiple batches of writ petitions, and a fresh challenge on the same point, without a new legal argument, is likely to be dismissed as covered by precedent.

Sections Involved

  • Central Goods and Services Tax Act, 2017 – levy of GST on royalty as consideration for the grant of mining rights, treated as a taxable supply of service by the Government to the lessee.

Decision – In Favour of

In favour of the Department — the writ petitions challenging the GST levy on mining royalty were dismissed, following binding Division Bench precedent on the same issue.

Case Details

High Court of Judicature for Rajasthan at Jodhpur; D.B. Civil Writ Petition No.10428/2018; Coram: Hon'ble Mr. Justice Vijay Bishnoi and Hon'ble Mr. Justice Yogendra Kumar Purohit; Order dated 21.09.2023; Neutral Citation: 2023:RJ-JD:31265-DB.

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