2022 (10) TMI 670 - HC - GST

High Court Clarifies GST Notice Procedure for Quarry Operations, Directs Objection Submission and Compliance with Supreme Court Guidance

C. Manogaran Versus The Commissioner/Additional Chief Secretary, Chennai., The State Tax Officer, Melur Assessment Circle, Madurai.

HC ruled that GST notice for seigniorage fee in quarry operations is procedural. Following SC's stay on GST for mining leases, the court directed ... Stay for payment (levy) of GST - grant of mining lease/royalty for carrying out quarry operations of rough stone was provided for a period of 5 years and transport permits issued by the authorities for collecting the necessary statutory charges and other charges - now respondents are insisting and compelling the petitioner to register the quarry operations under the GST Act, 2017 and to pay the GST on the seigniorage fee paid by the petitioner to the Geology and Mining department - Impugned order is notice. HELD THAT:- It is seen that the Honourable Apex Court in the case of M/S. LAKHWINDER SINGH VERSUS UNION OF INDIA & ORS. [2021 (11) TMI 336 - SC ORDER] had granted stay for payment of GST for grant of mining lease/royalty by the petitioner. Further, it has been followed consistently by various Courts including this Court. It is further seen that the impugned order is only a notice. The petitioner is directed to appear before the respondents and make his objections with necessary documents. The petitioner is directed to approach the second respondent within a period of 30 days from the date of receipt of a copy of this order and make his objections. Further, the second respondent is directed to consider the petitioner's objections and dispose the same in accordance with law following the judgment of the Hon'ble Apex Court - Till such time, Status quo to be maintained by the respondents - Petition disposed off. Issues:Challenge to impugned notice for GST payment on seigniorage fee for quarry operations.Analysis:The petitioner participated in a tender process for quarry operations and was granted a lease for five years. The respondents are now demanding GST payment on the seigniorage fee paid by the petitioner. The petitioner argues that the issue of levying GST on seigniorage fee is pending before the Supreme Court and various High Courts. The petitioner also mentions a stay granted by the Apex Court on GST payment for mining leases, which has been followed by other courts, including this one. The petitioner challenges the issuance of the impugned notice as improper.The Government Advocate argues that the seigniorage charges paid by the petitioner constitute a supply of services under the SGST Act, 2017. The notice was sent to the petitioner for non-payment of GST, and the petitioner failed to respond or attend hearings. The notice stated that if objections were not filed within 15 days, assessment would be made under the GST Act, 2017, with penalties and interest levied. The Government Advocate emphasizes that the notice is a procedural step, and the petitioner has the opportunity to file objections and supporting documents for consideration by the State Tax Officer.The court notes that the Supreme Court has granted a stay on GST payment for mining leases, which has been consistently followed by various courts. The impugned order is deemed as a notice, and the petitioner is directed to appear before the respondents to submit objections with necessary documents within 30 days. The second respondent is instructed to consider the objections following the Supreme Court's judgment. Until then, a status quo is to be maintained by the respondents. The writ petition is disposed of with no costs, and the connected miscellaneous petition is closed.