The petition challenging the levy of GST on mining royalty was dismissed. The court held that the Supreme Court has overruled the earlier precedent that royalty is a tax, thereby validating the levy of GST on royalty paid for mining concessions. Notices issued under the CGST Act were upheld.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
2024:HHC:10578
IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA
CWP No. 139/2024 Decided on: 4.11.2024
M/s Matri Stone Crusher & ors. …..Petitioners
Versus
Union of India & ors. ….Respondents
Coram:
The Hon’ble Mr. Justice Tarlok Singh Chauhan, Acting Chief Justice . The Hon’ble Mr. Justice Satyen Vaidya, Judge.
Whether approved for reporting?1 No
For the Petitioners: Mr. Arvind Sharma, Advocate. For the Respondents: Mr. Balram Sharma, Dy.S.G.I. with Mr. Rajeev Sharma, Advocate, for respondents No. 1 and 3.
Mr. Anup Rattan, A.G. with Mr. Rakesh Dhaulta, Mr. Pranay Pratap Singh, Mr. Sushant Kaprate, Addl. A.Gs., Mr. Arsh Rattan and Ms. Priyanka Chauhan, Dy.A.Gs., for respondents No.2 and 4.
Justice Tarlok Singh Chauhan, Acting Chief Justice (oral)
The instant petition has been filed for grant of following
substantive reliefs:
i. Issue a writ in the nature of Certiorari for quashing the Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 (Annexure P-3), Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 (Annexure P-4), Himachal Pradesh Govt. Notification No.11/2017 dated 30.06.2017 (Annexure P-5), Himachal Pradesh Govt. Notification No. 1/2017 dated 30.06.2017
1 Whether reporters of the local papers may be allowed to see the judgment? Yes.
2
(Annexure P-6), Notification No. 27/2018 TFL Central Tax (Rate) dated 31.12.2018 (Annexure P-8) and Himachal Pradesh Govt. Notification No.27/2018 dated 31.12.2018 (Annexure P-9), to the effect that no GST can be levied on Royalty paid by a Mineral Concession Holder for any mining concession granted by the State is illegal, unjust, unconstitutional and without authority of law.
ii. Issue a writ in the nature of Certiorari for quashing the Notices dated 09.12.2022 (Annexure P-15), 09.01.2023 (Annexure P- 16) and Summons dated 06.01.2023 (Annexure P-17) and 12.04.2023 (Annexure P-18) under Section 70 of the CGST Act, 2017, issued in pursuance to Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 (Annexure P-5), Notification No. 1/2017 Central Tax (Rate) dated 28.06.2017 (Annexure P-6), Himachal Pradesh Govt. Notification No.11/2017 dated 30.06.2017 (Annexure P-7), Himachal Pradesh Govt. Notification No. 1/2017 dated 30.06.2017 (Annexure P-8), Notification No. 27/2018 Central Tax (Rate) dated 31.12.2018 (Annexure P-10) and Himachal Pradesh Govt. Notification No.27/2018 dated 31.12.2018 (Annexure P-11) being totally illegal erroneous and bad in law.
iii. Issue a writ in the nature of Mandamus directing the respondents to refund GST/Service Tax paid on royalty in respect of mining leases and other allied charges/cess amount to Rs. 37,31,918/- (Thirty Seven Lakh Thirty One Thousand Nine Hundred and Eighteen only) till date (Annexure P-18A) alongwith interest @12% per annum.
iv. Stay further proceedings emanating from Notices dated 09.12.2022 (Annexure P- 15), 09.01.2023 (Annexure P-16) and Summons dated 06.01.2023 (Annexure P- 17) and 12.04.2023 (Annexure P-18), in the interest of justice.
3
v. Stay the levy of GST/Service Tax on Mining Royalty payable in respect of mining charges and other allied charges/cess under a mining concession granted by the State, during the pendency of the present writ petition.
2 The question, which arises for consideration in this petition is whether there can be levy of GST on royalty paid by the mineral concession holder for any mining concession granted by the State.
3 This petition was based upon the judgment rendered by SevenJudge Bench of the Hon’ble Supreme Court in India Cement Ltd. and ors. vs. State of Tamil Nadu and ors. (19901) 1 SCC 12 , wherein it was declared that royalty itself is a tax.
4 It was in this background that demand for GST on royalty by the respondents was stayed by the Division Bench of this Court.
5 It is not in dispute that the judgment rendered in India Cement Ltd.’s case (supra) has now been overruled by Nine-Judge Bench of the Hon’ble Supreme Court in Mineral Area Development Authority & anr.
vs. M/s Steel Authority of India & anr. , 2024 INSC 554 , wherein it has been held that royalty is not a tax. Therefore, the respondents are well within their rights to levy GST on the royalty paid by the mineral concession holder for any mining concession granted by the State.
6 Consequently, the orders impugned herein i.e. notices (Annexure P-15) dated 09.12.2022 & (Annexure P-16) dated 09.01.2023 and summons (Annexure P-17) dated 06.01.2023 & (Annexure P-18) dated 12.04.2023, are upheld and the instant petition is accordingly dismissed,
4
so also the pending application(s), if any, leaving the parties to bear their
own costs.
(Tarlok Singh Chauhan) Acting Chief Justice
(Satyen Vaidya) 4.11.2024 Judge (pankaj)
2 issues framed by the court
Whether GST can be levied on royalty paid by a mineral concession holder for a mining concession granted by the State.
Whether notices and summons issued for levy of GST on mining royalty are valid in light of Supreme Court precedent.
Colour shows how this judgement treated each authority
India Cement Ltd. and ors. vs. State of Tamil Nadu and ors.Overruled¶25
India Cement Ltd. and ors. vs. State of Tamil Nadu and ors. (19901) 1 SCC 12
Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr.Relied on¶27
Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr., 2024 INSC 554 · Who else cites this
1 provisions across 1 enactments
M/s Matri Stone Crusher & ors.
Union of India & ors.
Tarlok Singh Chauhan
Satyen Vaidya
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
