2021 (3) TMI 601

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....hin Kumar, A.A.G II Mr. Ashok Kumar Yadav, G.A. - I Mr. P.A.S. Pati, S.C. IV (In Sl. Nos.10 to 23) For the Resp.-CGST : Mr. P.A.S. Pati, Advocate (In Sl. Nos.12 to 14 & 18 to 23) Mr. Amit Kumar, Advocate (In Sl Nos.10, 15, 17) For the Resp.-DGGI : Mr. Ratnesh Kumar, Advocate ORDER All these petitioners are lessees of minor minerals awarded by the State. 2. In the first three writ petitions in these batch of cases being W.P.(T) No.3878 of 2020, W.P.(T) No.3736 of 2020 and W.P.(T) No.4163 of 2020 petitioners have sought declaration that royalty is not a payment in respect of any taxable service at all as it is imposed under Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 in respect of any minerals 'removed or consumed' by the holder of a mining lease from the leased area, at the rate specified. They have also sought declaration that Notification No. 22/2016-ST dated 13.04.2016 and its clarification is ultra-vires the provisions of the Finance Act, 1994. According to them, there is no liability to pay service tax under this Finance Act, 1994 on royalty in quarrying stones. 3. These petitioners have sought quashing of the notices issued by the Sup....

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....rgument of the petitioners so far as leviability of service tax on royalty is that, royalty cannot fall within the meaning of consideration, as such, there is no element of service involved under the Finance Act, 1994 as amended. In the alternative, petitioners have relied upon the decision of the Apex Court in the case of "India Cement Limited and Others Vs. State of Tamil Nadu and Others" reported in (1990) 1 SCC 12 (para 34) and submitted that as per the ratio of this decision by a seven Judges Bench of the Apex Court, royalty is a tax. Therefore, service tax or GST cannot be levied thereupon. Learned counsel for the petitioners acknowledge that the issue whether royalty is a tax or not is referred to the larger Bench of nine Judges in the case of "Mineral Area Development Authority and Others Vs. M/s. Steel Authority of India and Others" reported in (2011) 4 SCC 450. In this broad canvass of argument, learned counsel for the petitioners have prayed for an interim order at this stage in the nature granted by the Apex Court in Special Leave to Appeal (Civil) No. 37326 of 2017 order dated 11.01.2018. 7. Learned counsel for the petitioners in the batch of cases leaving the first ....

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....e of "Gujmin Industry Association Vs. Union of India" reported in 2018 SCC OnLine Guj 1417, interim order dated 25.01.2021 passed by the Karnataka High Court in Writ Petition No. 140859 of 2020 and also the interim order dated 22.08.2017 passed by High Court of Bombay at Goa in the case of "Goa Mining Association & Anr. Vs. Union of India and Others" in Writ Petition No. 1076 of 2016 and analogous cases. It is also pointed out that the interim order passed by the High Court of Bombay at Goa was not interfered with by the Apex Court in Special Leave Petition (Civil) Diary No. 9984 of 2019 judgment dated 05.07.2019 both on grounds of delay and merits. Based on these broad submissions, learned counsel for the petitioners have prayed for interim protection. 10. Learned Advocate General has appeared for the State of Jharkhand in the respective writ petitions in which levy of JGST is in question. He has made two fold arguments, inter alia, (i) The levy of service tax under the Finance Act, 1994 does not concern the State of Jharkhand (ii) The JGST Act being pari materia to the CGST Act, 2017 under the GST regime have significant difference in the provisions relating to levy of tax on go....

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....isions of the GST Act and in particular Section 15(2) thereof. It is submitted that the respondent department would also file a comprehensive reply to the issues raised by the writ petitioners. However, no case of interim protection is made out, moreover the stage of recovery of tax has not yet reached. 13. We have heard learned counsel for the parties on the legal issues raised concerning the leviability of service tax and CGST or JGST as the case may be concerning these petitioners, who are lessees of minor minerals. The legal issues concerning the leviability of the tax can be answered after considering the response of the respondent CGST and the State. The challenge in these writ petitions are in two parts. One relating to levy of service tax on royalty till the coming of the GST regime. The other writ petitions relate to challenge to both service tax and GST upon royalty in case of the respective petitioners or JGST in three writ petitions referred to earlier. Finance Act, 1994 brought into force the concept of service tax. The GST Act was introduced from 01.07.2017. Both are separate enactments with detailed provisions relating to charging section and the measure of tax and ....