Allowed

Kishna Automobile v. the Union of India and Anr.

Rajasthan HC28 Aug 2018CW/6416/2018

Case brief

AI extract

What is this about?

This consolidated judgment addresses writ petitions challenging a Finance Department letter that authorized Royalty Contractors to collect GST at 18% as forward charges on royalties collected on behalf of the Government. The court relied on the petitions' admission of the reverse charge mechanism.

What did the court decide?

The letter dated 08/11/2017 issued by the Finance (Tax) Department, Government of Rajasthan is quashed and set aside along with any orders issued in pursuance thereof.

Kishna Automobile Vs the Union of India and Anr. — GST and Indirect Tax | Rajasthan HC (2018)

¶1

HIGH COURT OF JUDICATURE FOR RAJASTHAN JODHPUR

¶2

S.B. Civil Writ No. 5354/2018

¶3

Ladu Lal Hiran, S/o Sh. Chandmal Hiran, Aged About 63 Years, Arham, Mahaveer Colony, District Bhilwara, Rajasthan. 2. Sh. Om Prakash, S/o Sh. Bhiyan Ram, Aged About 40 Years, Resident of 508, 19KBW, Ranjeetpura, Bikaner, Rajasthan.

¶4

Sh. Bhiyanram, S/o Sh. Motaram, Aged About 50 Years, Resident of 75 LNP, Shree Ganganagar, Rajasthan.

¶5

Sh. Vinod Kumar S/o Sh. Nehru Lal, Aged About 21 Years, Resident of 27 DOBB, Raowala, Bikaner, Rajasthan.

¶6

Smt. Sharda, W/o Sh. SheshKaran, Aged About 30 Years, Resident of 99, Modayat, Bikaner, Rajasthan.

¶7

Sh. Nandram Kasaniya, S/o Sh. Dhokalram Kasaniya, Aged About 42 Years, Resident of Chak 6, BMRPO, Barsalpur, Bikaner, Rajasthan.

¶8

Smt. Dami, W/o Sh. Hariram, Aged About 65 Years, Resident of 3, KWSM, Sansardesar, Tehsil Chhatargarh, Bikaner, Rajasthan.

¶9

Sh. Devkishan, S/o Sh. Chhoturam, Aged About 32 Years, Resident of Kumharon Ki Dhani, Ugraas, Khara, Jodhpur, Rajasthan.

¶10

Sh. Harikishan, S/o Sh. Likhmaram, Aged About 48 Years, Resident of Pabusar West Bikaner, Rajasthan.

¶11

Sh. Subhash Chandra S/o Sh. Dilip Kumar, Aged About 36 Years, Resident of Raowala, Bikaner, Rajasthan.

¶12

Sh. Balram, S/o Sh. Nehru Lal, Aged About 25 Years, Resident of Raowala, Bikaner, Rajasthan.

¶13

Sh. Moolaram S/o Sh. Hari Ram, Aged About 35 Years, Resident of Khetas, Nagore, Bikaner, Rajasthan.

¶14

Smt. Bhagwani W/o Sh. Banwari Lal, Aged About 57 Years, Resident of Opposite Samratpura, Jyotinagar, Peeprali Road, Sikar, Sikar Rajasthan.

¶15

Sh. Ramniwas, S/o Sh. Hariram, Aged About 40 Years, Resident of Plot No. 24, Krishna Vihar, Ward No.1, Bikaner, Rajasthan.

¶16

[CW-5354/2018]

¶17

(2 of 17)

¶18

Sh. Shaitanram S/o Sh. Takharam, Aged About 45 Years, Resident of Nayak Basti, Majhwas, Nagore, Rajasthan.

¶19

Sh. Shyampot Ram S/o Sh. Jagdish, Aged About 30 Years, (2 of 3) [CW-5354/2018] Resident of VPO, Gomawali, Warn No. 9, 8 GM, Ganganagar, Rajasthan.

¶20

Sh. Shivratan S/o Hajari Ram, Aged About 29 Years, Resident of Tanwarwala, Bikaner, Rajasthan.

¶21

Sh. Akash Legha, S/o Sh. Begaram Legha, Aged About 27 Years, Resident of Behind Doodi Petrol Pump, Bikaner, Rajasthan. 19. Sh. Banwari Badu S/o Prithviraj Bhadu, Aged About 35 Years, Resident of Jaat Colony, Bikaner, Rajasthan.

¶22

Sh. Kishan Lal S/o Sh. Gullaram, Aged About 38 Years, Resident of 3-PRM Peeranwali, Dantaur, Bikaner, Rajasthan.

¶23

Sh. Rajendra Bhadu S/o Sh. Kashiram, Aged About 40 Years, Resident of Ward No. 3, 1 KYED, Ganganagar, Rajasthan.

¶24

Sh. Vinod Kumar Karnani, S/o Sh. Kanhaiya Lal Karnani, Aged About 50 Years, Resident C-12, Karni Nagar, Lalgard, Near Bikaner Public School, Bikaner, Rajasthan.

¶25

Sh. Mohit Kumar Karnani S/o Vinod Kumar Karnai, Aged About 45 Years, Resident of C-112, Karninagar, Lalgarh Palace, Bikaner, Rajasthan.

¶26

----Petitioners

¶27

Versus

¶28

State of Rajasthan, Through Secretary, Department of Mines and Geology, Shastri Circle, Udaipur, Rajasthan.

¶29

Secretary, Finance Department, Government of Rajasthan, 1st Floor, Main Building, Government Secretariat, Jaipur- 302005, Rajasthan.

¶30

Director, Mines and Geology Department, Udaipur, Rajasthan.

¶31

Mining Engineer, Office of Mining Department, Bikaner.

¶32

Joint Secretary (Revenue), Ministry of Finance, Department of Revenue, Roon No.46,north Block, New Delhi- 110001

¶33

----Respondents

¶34

Connected With

¶35

S.B. Civil Writ No. 5841/2018

Surendra Singh

----Petitioner

[CW-5354/2018]

(3 of 17)

Versus

State And Ors

----Respondent

S.B. Civil Writ No. 5535/2018

¶44

M/s. Bara Chemicals And Minerals

¶45

----Petitioner

¶46

Versus

¶47

State And Ors S.B. Civil Writ No. 5638/2018 Dayal Ram

¶48

----Respondent ----Petitioner ----Respondent ----Petitioner ----Respondent ----Petitioner ----Respondent ----Petitioner ----Respondent

¶49

Versus State Of Rajasthan And Ors. S.B. Civil Writ No. 5869/2018 M/s. Shivam Chemical Versus State Of Rajasthan And Ors. S.B. Civil Writ No. 5831/2018 Ram Karan Versus State And Ors S.B. Civil Writ No. 7647/2018 Shelwara Marble M.o.s Sansthan Versus State And Ors S.B. Civil Writ No. 7088/2018 M/s. Bajrang Chemicals Bhanwanda

¶50

----Petitioner Versus ----Respondent S.B. Civil Writ No. 7042/2018

¶51

State Of Rajasthan And Ors.

Smt. Suraj Kaur

[CW-5354/2018]

(4 of 17)

----Petitioner

Versus

State Of Rajasthan And Ors.

¶58

----Respondent

¶59

S.B. Civil Writ No. 8944/2018

¶60

M/s. Radhey Chemicals Jodhpur

¶61

----Petitioner

¶62

Versus

¶63

The State Of Rajsthan Through Secretary

¶64

----Respondent S.B. Civil Writ No. 8901/2018 Madan Mohan Jat ----Petitioner Versus State Of Rajasthan Through Secretary, ----Respondent S.B. Civil Writ No. 8902/2018 Praveen Kumar ----Petitioner Versus State Of Rajasthan Through Secretary, Mines And Geology Department, ----Respondent S.B. Civil Writ No. 7737/2018 M/s. Manakpura Limestone ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 7739/2018 Kanahaya ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent

¶65

[CW-5354/2018]

¶66

(5 of 17)

¶67

S.B. Civil Writ No. 7746/2018

¶68

Gordhan Das

¶69

----Petitioner

¶70

Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 7741/2018 Gordhan Das ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 7738/2018 M/s. Krishna Lime ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 9476/2018 M/s Sangiarai Royalties ----Petitioner Versus State Of Rajasthan ----Respondent S.B. Civil Writ No. 7001/2018 Jodhpur Pathar Udhyog ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 10365/2018 Pankaj Kumar Sharma ----Petitioner Versus State Of Rajasthan ----Respondent

¶71

[CW-5354/2018]

¶72

(6 of 17)

¶73

S.B. Civil Writ No. 9085/2018

¶74

M/s Shri Ram Lime Prduct Pvt Ltd

¶75

----Petitioner

¶76

Versus
State Of Rajsthan
----Respondent
S.B. Civil Writ No. 9244/2018
Suresh
----Petitioner
Versus
State Of Rajasthan
----Respondent
S.B. Civil Writ No. 9533/2018
Ganesh Ram Choudhary
----Petitioner
Versus
State Of Rajasthan
----Respondent
S.B. Civil Writ No. 8937/2018
Shyam Chemical
----Petitioner
Versus
State Of Rajasthan
----Respondent
S.B. Civil Writ No. 11647/2018
Chandri Devi
----Petitioner
Versus
The State Of Rajasthan
----Respondent
S.B. Civil Writ No. 9992/2018
Om Prakash
----Petitioner
Versus
State Of Rajasthan
----Respondent

¶77

[CW-5354/2018]

¶78

(7 of 17)

¶79

S.B. Civil Writ No. 10968/2018

¶80

Hardev Ram Choudhary The State Of Rajasthan

Versus

----Petitioner

----Respondent

S.B. Civil Writ No. 11573/2018

¶85

Mula Ram ----Petitioner Versus State Of Rajasthan ----Respondent S.B. Civil Writ No. 11584/2018 Smt. Neeru Choudhary ----Petitioner Versus State Of Rajasthan ----Respondent S.B. Civil Writ No. 2106/2018 Marble Gangsaw Association ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 4996/2018 Ram Kumar Vyas ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 5868/2018 Kailash Ram ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent

¶86

[CW-5354/2018]

¶87

(8 of 17)

¶88

S.B. Civil Writ No. 6416/2018

Kishna Automobile

----Petitioner

Versus

The Union Of India And Anr.

¶93

----Respondent

¶94

S.B. Civil Writ No. 6732/2018 Rr Minerals And Anr.

¶95

----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 6682/2018 Durga Ram And Ors. ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 7732/2018 M/s. Atul Prem Shiv Narayan And Anr. ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 5567/2018 Virendra Singh Bhati ----Petitioner Versus State And Ors ----Respondent S.B. Civil Writ No. 7044/2018 Smt. Bhatudi ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent

¶96

[CW-5354/2018]

¶97

(9 of 17)

¶98

S.B. Civil Writ No. 8940/2018

¶99

M/s Moti Lime Private Limited

¶100

----Petitioner

¶101

Versus

¶102

The State Of Rajsthan Through Secretary

¶103

----Respondent

¶104

S.B. Civil Writ No. 8943/2018

¶105

M/s. Moti Lime Pvt. Ltd.

¶106

----Petitioner Versus ----Respondent S.B. Civil Writ No. 8899/2018 ----Petitioner

¶107

State Of Rajsthan

¶108

S.B. Civil Writ No. 8899/2018

¶109

Praveen Kumar

¶110

Versus

¶111

The State Of Rajasthan Through Secretary,

¶112

----Respondent

¶113

S.B. Civil Writ No. 7743/2018

¶114

Nand Kishore

¶115

----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 7742/2018 M/s. Manakpura Limestone ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent S.B. Civil Writ No. 7740/2018 Nand Kishore ----Petitioner Versus State Of Rajasthan And Ors. ----Respondent

¶116

[CW-5354/2018]

¶117

(10 of 17)

¶118

S.B. Civil Writ No. 7744/2018

Kanahaya

----Petitioner

Versus

State Of Rajasthan And Ors.

¶123

----Respondent

¶124

S.B. Civil Writ No. 7200/2018

¶125

Marwar Minerals

¶126

----Petitioner Versus State And Ors ----Respondent S.B. Civil Writ No. 8923/2018 Renu Devi ----Petitioner Versus State Of Rajasthan ----Respondent

¶127

S.B. Civil Writ No. 10336/2018

¶128

M/s. Gotan Lime Stone Company

¶129

----Petitioner Versus State Of Rajasthan ----Respondent S.B. Civil Writ No. 9734/2018 M/s. Harish Clays, A Registered Partnership Firm , Registered Office Golcha Gardens , Agra Road , ----Petitioner Versus The State Of Rajasthan

¶130

----Respondent

¶131

S.B. Civil Writ No. 9739/2018 Associated Soapstone Distributing Co. Private Ltd.,

¶132

----Petitioner

¶133

Versus

¶134

The State Of Rajasthan

----Respondent

[CW-5354/2018]

(11 of 17)

S.B. Civil Writ No. 9526/2018

¶139

M/s. Mahendra Singh Mineral

----Petitioner

Versus

State Of Rajasthan

----Respondent

S.B. Civil Writ No. 8949/2018 Akhilender Singh ----Petitioner Versus State Of Rajasthan Through Secretary, ----Respondent S.B. Civil Writ No. 11979/2018 Mula Ram ----Petitioner Versus State Of Rajasthan ----Respondent S.B. Civil Writ No. 11581/2018 Sidhi Ganesh Rodi Suppliers ----Petitioner Versus State Of Rajasthan ----Respondent S.B. Civil Writ No. 11580/2018 M/s Laxminiwas Mines And Minerals, Salasar ----Petitioner Versus State Of Rajasthan ----Respondent S.B. Civil Writ No. 11579/2018 Smt. Shashi Agarwal ----Petitioner Versus State Of Rajasthan ----Respondents

¶145

[CW-5354/2018]

¶146

(12 of 17)

¶147

S.B. Civil Writ No. 12301 /2018

¶148

M/s Shiv Shakti Minerals

¶149

----Petitioner

¶150

Versus
State Of Rajasthan
----Respondents
S.B. Civil Writ No. 13021/2018
Manoj
----Petitioner
Versus
State Of Rajasthan
----Respondents
S.B. Civil Writ No. 7010 /2018
Rajendra Singh & Ors.
----Petitioner
Versus
State Of Rajasthan
----Respondents
S.B. Civil Writ No. 10569/2018
Jai Ram
----Petitioner
Versus
State Of Rajasthan
----Respondents
S.B. Civil Writ No. 10577/2018
Divya Gehlot
----Petitioner
Versus
State Of Rajasthan
----Respondents
S.B. Civil Writ No. 10578/2018
M/s Calcium Minerals
----Petitioner

[CW-5354/2018]

(13 of 17)

Versus

State Of Rajasthan

----Respondents

S.B. Civil Writ No. 11191 /2018

¶157

Federation of Mining Asso. Of Raj.

----Petitioner

Versus

State Of Rajasthan

----Respondents

S.B. Civil Writ No. 11527/2018

Manchha Ram

----Petitioner

Versus

State Of Rajasthan

----Respondents

For Petitioner(s)	: Mr. Ravi Bhansali, Senior Counsel assisted by Mr. Dhanesh Sarswat and Mr. Vipul Dharnia Mr. Vikas Balia Mr. Himanshu Choudhary Mr. Arvind Shrimali Mr. Vijendra Puri Mr. Khet Singh Mr. Mahaveer Bhanwariya Mr. Shreekant Verma Mr. Rajesh Punia Mr. A. Shrimali Mr. Chain Singh Mr. Amit Vyas Mr. C.S. Bhati Mr. Trilok Joshi Mr. Digvijay Singh Mr. Vijendra Puri
For Respondent(s)	: Mr. Anil Bhansali with Mr. Bhagirath Patel Mr. R.R. Ankiya for Mr. Vipul Singhvi Mr. Sanjeet Purohit, ASG Mr. Rishabh Tayal for Mr. K.L. Thakur, AAG

¶169

[CW-5354/2018]

¶170

(14 of 17)

¶171

HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

¶172

Order

¶173

28/08/2018

¶174

These writ petitions under Article 226 of the Constitution of India have been preferred claiming, in sum and substance, the following reliefs:

¶175

“1. The letter No. P12(52) finance/tax/2017-III dated 8/11/2017 (annex.4) issued by Finance (Tax) Department, Rajasthan government may kindly be quashed and set aside.

¶176

A clarification may be issued to avoid, double burden on the miner/lease holder/end user and suitable amendment in law may be directed to the respondents.

¶177

The respondent authorities may be directed to place before the court the correct position of GST collection on royalty. Further, consequential directions to follow the correct method of GST collection on royalty may also be issued to the respondent authorities.

¶178

Any other order, which this Hon’ble Court deems fit and proper in the facts and circumstances of the case, may kindly be passed in favour of the petitioner.

¶179

Cost of the writ petition may kindly be allowed in favour of the petitioner.”

¶180

Precisely, the facts of this case are that the petitioners are engaged in the business activity of mining and are registered lease holders and have lawful mining lease in their favour. The respondent-State is empowered to award the Excess Royalty Collection Contract (ERCC) to the Royalty Contractors. The respondent No.2 Finance Department, Government of Rajasthan was empowered to authorize Royalty Contractors to collect GST on

¶181

[CW-5354/2018]

¶182

(15 of 17)

¶183

the amount of royalty collected for and on behalf of the Government.

¶184

The Royalty Contractors (termed as ERCC Contractors) got appointed by the Government exclusively for collecting the royalty on behalf of the Government from the mining lessee of natural resources without supply of such natural resources.

¶185

As per the relevant Rule 2 (xxiv) of the Rajasthan Minor Mineral Concession Rules, 2017, “Excess Royalty Collection Contract” being defined means that a contract to collect royalty in excess of annual dead rent and any other charges as may be prescribed in the contract, on behalf of the Government for specified mineral dispatched by the mining lease from the area specified in the contract (ERCC), the lessee was to pay fixed amount as installments of the Contract awarded to him by the Government upfront or in installments, and DMFT on actual collection on the basis of his rights to collect the royalty on specified natural resources from a specified territory. The royalty to be collected by a Royalty Contractor on the mining lease from the natural resources ought to be pre-determined and as fixed by the Government.

¶186

The letter of the Finance Department, Government of Rajasthan to Royalty Contractors became the bone of contention in these writ petitions, as the same entitled the contractor to collect GST @ 18% as forward charges.

¶187

Learned counsels for the petitioners submit that the letter issued by the Finance Department, Government of Rajasthan to authorize the contractor to collect the GST on the amount of royalty collected on behalf of the Government was

¶188

[CW-5354/2018]

¶189

(16 of 17)

¶190

against the provisions of Section 9 (3) of CGST Act, 2017 readwith notification No.13/2017 Central Tax (Rate) dated 28.06.2017.

¶191

Learned counsels for the petitioners further pointed out that Section 2 (105) of CGST Act, 2017 defines the term “Supplier”, in relation to any goods or services or both, to mean that the person supplying the said goods or services or both, shall include an agent acting on behalf of such supplier in relation to the goods or services or both.

¶192

However, at this juncture, learned counsel for the respondents have taken a stand by filing their respective pleadings that the Royalty Contractor (ERCC Contractor) are being appointed by the Government exclusively for collecting royalty on behalf of the Government from the mining lease holders of natural resources without supply of such natural resources.

¶193

Learned counsel for the respondents have further clarified that the royalty paid for mining activities as chargeable under the notification dated 28.06.2017 provides that the lease holders are required to pay the GST under the reverse charge mechanism.

¶194

It is contended by learned counsel for the respondents that lessee/lease holders will continue to submit and follow the existing procedure for filing of GST Returns, and payment of GST under the reverse charge mechanism is according to the provisions of law. It is further contended that the liabilities of lessee/lease holders will not be affected by the amended notification dated 26.07.2018.

¶195

Once, the reverse charge mechanism itself has not been contested by the respondents and it is an accepted proposition and the same is further supported by the pleadings

¶196

[CW-5354/2018]

¶197

(17 of 17)

¶198

filed by the respective respondent parties, we do not find any reason to make any further adjudication in the matter.

¶199

In light of the aforesaid submission and upon such stand of the respondents, the present writ petitions are allowed and the letter dated 08.11.2017 issued by the Finance (Tax) Department, Government of Rajasthan is hereby quashed and set aside. However, if any letter has been issued in pursuance of the letter dated 08.11.2017, the same shall also stand quashed accordingly.

¶200

(DR. PUSHPENDRA SINGH BHATI),J.

¶201

/zeeshan/

Kishna Automobile v. the Union of India and Anr.

Case brief

What is this about?

What did the court decide?

Kishna Automobile v. the Union of India and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Jitendra Kumar Bhatt Vs State of Rajasthan

Maan Mahendra Singh Vs Kalyan Singh and Ors.

Anita Devi Vs State of Rajasthan

Jyoti Dhariwal Vs State of Rajasthan

Smt. Vimla and Anr. Vs State of Rajasthan and Anr.

State and Anr. Vs Shri Jaidev and Anr.