2022 (5) TMI 1077 - HC - GST

GST on Mining Royalties: Challenge to Show Cause Notice for Minor Mineral Operations Under Scrutiny

M/s Ashish Pandey Thru. Proprietor Ashish Pandey Versus Uoi Thru. Secy. Ministry Of Finance, Deptt. Rev. New Delhi And And 2 Others

The HC considered a challenge to a GST show cause notice regarding royalty payments for minor mineral mining operations. The petitioner argued that GST ... Levy of GST - royalty paid for undertaking mining operations in respect of minor minerals - HELD THAT:- The petitioner shall submit reply to the show cause notice dated 23.03.2022 which is under challenge herein and the proceedings pursuant to the said show cause notice shall go on, however, till the next date of listing no final orders shall be passed by the authority concerned. Two weeks' thereafter shall be available to learned counsel for the petitioner for filing rejoinder affidavit. Issues:1. Whether goods and services tax is leviable on the amount of royalty paid for undertaking mining operations in respect of minor mineralsRs.2. Challenge to the show cause notice under the Goods and Service Tax Act.Analysis:1. Levying of GST on Royalty for Mining Operations:The petitioner's counsel argued that as per the provisions of the Goods and Service Tax Act, no goods and services tax should be imposed on the royalty paid for conducting mining operations related to minor minerals. Reference was made to previous orders of the Court, including one dated 28.01.2022 in Writ Tax No.11 of 2022, where a similar challenge to a show cause notice was addressed. The Court directed the petitioner to respond to the show cause notice dated 23.03.2022, which was the subject of the current challenge. It was further ordered that proceedings based on the notice could continue, but no final orders should be issued by the concerned authority until the next listing date.2. Challenge to Show Cause Notice:The Court instructed the respondents to file their counter affidavit within four weeks. Subsequently, the petitioner's counsel would have an additional two weeks to submit a rejoinder affidavit. The case was to be connected and listed together with Writ Tax No.11 of 2022 after the specified period elapsed. This procedural step aimed to ensure a fair and comprehensive consideration of the matter before the Court.In conclusion, the judgment addressed the issue of levying goods and services tax on royalty for mining operations involving minor minerals under the Goods and Service Tax Act. The Court provided directions for the submission of affidavits and the progression of proceedings, emphasizing the need for a thorough examination of the legal aspects involved in the challenge to the show cause notice.