Facts of the Case: Nagem Cori, represented by its proprietor Aliar Urawther Ibrahim Kunju, challenged a Show Cause Notice dated 09.12.2024 and the consequent assessment order dated 12.06.2025 for FY 2021-22, whereby GST had been levied on royalty and seigniorage charges payable in connection with the petitioner's mining activities. The petitioner's case was that no GST is payable on such royalty and seigniorage charges — an issue that is presently sub judice before the Supreme Court in a batch of cases.

Issues Involved:

  1. Whether GST is leviable on royalty and seigniorage charges paid in respect of mining activities.
  2. What relief is appropriate where this very question awaits final determination by the Supreme Court.

Petitioner's Arguments:

  • No GST is payable on royalty and seigniorage charges relating to mining activity, an issue awaiting final decision from the Supreme Court in Udaipur Chambers of Commerce and Industry and Others v. Union of India and Others (SLP (C) No. 37326 of 2017).
  • The petitioner sought liberty to keep the issue alive by way of a statutory appeal, without being required to make any pre-deposit given the pendency of the Supreme Court proceedings.

Respondent's Arguments:

  • No separate contest was recorded distinguishing the case from the Madras High Court's consistent approach of keeping such recovery proceedings in abeyance pending the Supreme Court's ruling.

Court Order / Findings:

  • The Court noted that the levy of GST on mining royalty and seigniorage charges is presently awaiting final adjudication by the Supreme Court in the Udaipur Chambers of Commerce batch, and that the Madras High Court has been taking a consistent stand of keeping recovery proceedings in abeyance pending disposal of that appeal.
  • The petitioner was granted liberty to file a statutory appeal to keep the issue alive; if filed within four weeks, it was to be numbered without reference to limitation.
  • In view of the pending Supreme Court decision, the Court held that the petitioner need not make any pre-deposit for filing such appeal.

Important Clarification:

  • Where the very question of GST's leviability on mining royalty and seigniorage charges is sub judice before the Supreme Court, assessees are entitled to keep their challenge alive through a statutory appeal without the ordinary limitation bar and, significantly, without being made to comply with the pre-deposit requirement that would otherwise apply — recovery is kept in abeyance until the Supreme Court's ruling.

Sections Involved:

  • GST levy on royalty/seigniorage charges for mining activity — subject matter of the pending Supreme Court reference in Udaipur Chambers of Commerce and Industry v. Union of India.
  • Section 107, GST Act, 2017 — statutory appeal and its pre-deposit requirement, waived here.

Decision – In Favour of: Assessee (procedural relief pending the Supreme Court's final ruling on the underlying tax question).

Case Details: Madurai Bench of Madras High Court; W.P.(MD) No. 29295 of 2025 & W.M.P.(MD) Nos. 22645 and 22646 of 2025; Coram: Hon'ble Mr. Justice G.R. Swaminathan; Date of Order: 25.10.2025.

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.