2022 (4) TMI 1447 - HC - GST

GST Demand on Royalty-Paid Minerals Temporarily Stayed Pending Supreme Court's Final Decision on Double Taxation Issue

The HC granted an interim stay on payment of GST on minerals for which royalty had already been paid. The petitioner challenged a GST notice, arguing it ... Levy of GST - minerals on which royalty has already been paid - HELD THAT:- In similar matter in M/S VENKATA SAI GRANITES VERSUS THE UNION OF INDIA, THE STATE OF ANDHRA PRADESH, ASSISTANT COMMISSIONER (ST), CHITOOR-I CIRCLE, CHITOOR. [2021 (6) TMI 1083 - ANDHRA PRADESH HIGH COURT], interim stay has been granted by this Court suspending the impugned show cause notice. Since the very issue as to whether GST would be chargeable on minerals on which already royalty has been paid is under consideration before the Hon’ble Supreme Court, there shall be interim stay as prayed for. Issues Involved:1. Whether GST is chargeable on minerals on which royalty has already been paid.Analysis:The petitioner, who has paid royalty charges for extracted minerals, received an impugned notice for payment of GST on the same minerals. The counsel cited a Supreme Court case where a conflict led to a reference to a Nine Judges Bench. Subsequently, in a related case, the Supreme Court stayed GST payment for mining leases/royalties. Another case mentioned an interim stay granted by the High Court on a similar matter. Considering the issue pending before the Supreme Court, an interim stay was granted on the GST payment, aligning with the previous decisions.This judgment primarily revolves around the interpretation of whether GST is applicable to minerals for which royalty has already been paid. The petitioner argued against the imposition of GST on minerals on which royalty has been paid, citing relevant legal precedents and ongoing Supreme Court deliberations. The court considered the previous conflicting decisions and the interim stay granted by the Supreme Court in related cases, leading to the grant of an interim stay in this case as well. The court's decision aligns with the principle of avoiding double taxation and ensures consistency with the legal developments in similar cases.The legal issue at hand pertains to the applicability of GST on minerals for which royalty has already been paid. The petitioner contended that the imposition of GST on such minerals would result in double taxation. Citing a Supreme Court case and related interim orders, the petitioner sought relief from the GST payment. The court, after considering the arguments and the ongoing Supreme Court proceedings on the matter, granted an interim stay on the GST payment. This decision reflects a cautious approach by the court, awaiting the final determination by the Supreme Court on the contentious issue of GST applicability to minerals with paid royalties.In conclusion, the judgment by the Andhra Pradesh High Court granted an interim stay on the payment of GST on minerals for which royalty had already been paid. The decision was based on the ongoing Supreme Court proceedings and related interim orders, ensuring consistency with previous decisions and avoiding potential double taxation. The court's analysis and decision showcase a prudent approach in addressing the legal issue at hand, awaiting the final resolution by the Supreme Court on the matter of GST applicability to such minerals.