GST Notice on Minerals Stayed Where Royalty Already Paid Under Section 73 of APGST Act, 2017

The HC stayed a GST notice issued under Section 73 of APGST Act, 2017 demanding payment on minerals for which royalty had already been paid. The petitioner challenged the notice as illegal and unconstitutional, citing a similar case where the SC had stayed GST payment for mining lease/royalty. The court granted interim protection considering that a Nine Judges Bench of the SC is currently examining whether GST should be charged on minerals already subject to royalty payments. The matter will be listed after the SC disposes of related cases.

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Issues:
1. Challenge to notice under Section 73 of APGST Act, 2017 for payment of GST on minerals already subject to royalty charges.

Analysis:
The petitioner sought a direction to declare the notice under Section 73 of APGST Act, 2017, dated 02.12.2021, asking for GST payment on minerals as arbitrary, illegal, ultra vires, and unconstitutional. The petitioner argued that royalty charges for the extracted minerals had already been paid. Citing the case of Mineral Area Development Authority & Ors. v. Steel Authority of India & Ors., (2011) 4 SCC 450, the petitioner's counsel highlighted a conflict referred to a Nine Judges Bench of the Supreme Court. Referring to the case of M/s. Lakhwinder Singh v. Union of India & Others, where the Supreme Court stayed GST payment for grant of mining lease/royalty, the petitioner requested similar interim protection. Additionally, it was noted that in a similar matter, interim stay had been granted by the Court suspending the impugned show cause notice.

The Government Pleader, Commercial Tax, clarified that only the impugned notice had been issued. Considering the ongoing consideration of whether GST should be charged on minerals where royalty has been paid by a Nine Judges Bench of the Supreme Court, the Court found merit in granting an interim order in favor of the petitioner. Consequently, the Court decided to list the matter after the disposal of specific cases before the Supreme Court and ordered a stay on the notice dated 02.12.2021 issued to the petitioner. The parties were allowed to mention the matter after the disposal of cases before the Supreme Court, and instructions were given to complete the pleadings in the meantime.

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