Mining Royalty Taxed Under GST: Landmark Ruling Validates Government's Notification on Comprehensive Levy Mechanism

HC upheld GST levy on mining royalty, dismissing petitioner's challenge. The court relied on a Nine-Judge Bench ruling that royalty is not a tax, validating respondents' notifications. The petition was rejected, with parties bearing their own costs, effectively confirming the GST imposition on mining concession royalties.

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Issues:
1. Whether GST can be levied on royalty paid by a mineral concession holder for any mining concession granted by the State.

Analysis:
The petition sought to quash various notifications and notices related to the levy of GST on mining royalty. The petitioner argued that GST on royalty is illegal, unjust, and unconstitutional. The key issue was whether GST could be imposed on royalty paid by a mineral concession holder for a mining concession granted by the State.

The petition relied on a previous judgment by a Seven-Judge Bench of the Supreme Court in India Cement Ltd. case, where royalty was considered a tax. However, this argument was weakened as a subsequent Nine-Judge Bench ruling in Mineral Area Development Authority case overturned the India Cement Ltd. judgment, stating that royalty is not a tax. This change in legal interpretation allowed the respondents to levy GST on mining royalty.

As a result, the High Court upheld the validity of the notifications and notices imposing GST on mining royalty. The court dismissed the petition and upheld the orders issued by the respondents. The parties were directed to bear their own costs, and any pending applications were also dismissed in light of the judgment.

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