Mining Royalty GST Recovery Stayed Pending Supreme Court Decision on Udaipur Chambers Case

The HC addressed writ petitions challenging GST imposition on mining royalty. Despite a previous Division Bench ruling against assessees in the Shivalik Silica case, the court granted interim relief by staying GST recovery on royalty for all petitioners. This decision was influenced by a pending Supreme Court challenge to the Udaipur Chambers of Commerce & Industry judgment. The court balanced interests by allowing proceedings under the notices to continue while maintaining the recovery stay, and directed respondents to file timely replies before the next hearing.

---

---

Issues:
Permissibility of raising demand of GST on royalty.

Analysis:
The High Court of Rajasthan addressed a bunch of writ petitions challenging the notifications imposing GST on royalty paid for mining activities and alleging discrepancies in returns. The Court referred to a previous case, M/s Shivalik Silica Vs. Union of India & Ors., where a Division Bench had ruled against the assessee regarding service tax on royalty. The Court noted that the issue is also under consideration by a larger Bench of the Supreme Court. Despite the rejection of relief in the Shivalik Silica case, the High Court held that the effect of the previous judgment in the Udaipur Chambers of Commerce & Industry case remains in abeyance due to a pending challenge in the Supreme Court. Consequently, the Court decided to stay the recovery of GST on royalty for all petitioners, allowing the proceedings initiated under the notices to continue. The respondents were granted the option to seek vacation of the stay, and fresh notices were to be issued in new matters, with replies to be filed by the next hearing date.

In conclusion, the High Court granted interim relief by staying the recovery of GST on royalty for the petitioners, considering the pending challenge in the Supreme Court and the fact that replies were still awaited in the writ petitions. The Court emphasized the need to balance the interests of both parties and allowed the proceedings under the notices to proceed while maintaining the stay on the recovery of GST. The case was listed for further hearing on a specified date, and the respondents were directed to file replies through their respective counsels in a timely manner.

---