GST on Royalty to conduct Mining Activity: Allahabad HC stays Demand [Read Order]

The Allahabad High Court has stayed the GST demand on payment of royalty to conduct mining activity.

The petitioner/assessee challenged the First Appeal Order arising from the earlier order under Section 73 of the U.P. GST Act, 2017.

The petitioner has also challenged the ex parte order passed by the State GST authorities pursuant to a notice. Both proceedings were stated to be for the same tax period, being Financial Year 2017-18.

The petitioner contended that no GST liability could arise from the payment of a royalty to conduct mining activity. The petitioner has relied on the decision of the Supreme Court in the case of A.D. Agro Foods Pvt. Ltd. Vs. Union of India in which the payment of GST for grant of mining lease/royalty by the petitioner was stayed.

Justice Saumitra Dayal Singh observed that “Matter requires consideration, both on the issue of liability to pay GST and royalty as also as to jurisdictional error in the second proceeding for the same tax period.”

The Court granted six weeks' time to file counter affidavit to the department as prayed by the Standing Counsel. Petitioner shall have two weeks' thereafter to file rejoinder affidavit.

To Read the full text of the Order CLICK HERE

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