Mining Lease Royalty Dispute: GST Payment Suspended After Precedent-Driven Legal Challenge Challenging Service Classification

HC granted stay on GST payment for mining lease/royalty, aligning with SC's interim order in a similar case. Petitioner argued royalty is a tax, not a service payment, referencing precedent. The court connected this case with a related matter and suspended GST liability pending final resolution.

---

---

Issues involved: Interpretation of royalty payment as tax or consideration for GST liability.

The petitioner argued that the royalty payment is not amenable to GST as it is not considered as payment for sale of goods or services provided, but rather as a tax due to the privilege granted by the State for mining sand. Reference was made to a Supreme Court decision in India Cement Ltd. case where royalty payment was deemed to be in the nature of tax.

The petitioner also highlighted a similar ongoing controversy before the Supreme Court in the case of M/s Lakhwinder Singh vs. Union of India & Ors., where the Supreme Court ordered a stay on the payment of GST for grant of mining lease/royalty until further notice. The petitioner requested a similar stay in the present case until the matter is resolved.

The High Court directed the case to be connected and listed with another related matter. Additionally, the High Court granted the petitioner's request for a stay on the payment of GST for grant of mining lease/royalty until further orders, in line with the Supreme Court's decision in the referenced case.

---