Karnataka High Court stays Service Tax demand on grant of Mining Lease/Royalty [Read Order]

Karnataka High Court stays Service Tax demand on grant of Mining Lease/Royalty [Read Order]

Karnataka High Court - Service Tax - Mining Lease - Royalty - Taxscan

The Karnataka High Court stayed service tax demand on the grant of Mining Lease/Royalty.

The petitioner, M/s Zeenath Transport Company has challenged the constitutional validity of Section 174 Central Goods and Services Tax Act, 2017 is against the constitutional (101st) Amendment Act 2016 being violative of Article 14, 19, and 265 of the Constitution of India and also sought for quashing the show cause notice.

The petitioner submitted that a similar issue is pending before Apex Court wherein it granted the interim order for payment of service tax of the grant of Mining lease/Royalty by the petitioner.

Following the interim order passed by Apex Court the Gujarat High Court has also passed the interim order regarding payment of scriec tax for grant of Mining Lease /Royalty by the member of petitioner’s Society subject to petitioner filing of an undertaking.

The single-judge bench of Justice Ashok S. Kinagi noted that the petitioner has been made out of the ground for granting of the interim order. The court has ordered that until further orders, payment of service tax for grant of Mining Lease/Royalty shall remain stayed subject to petitioner filing of the undertaking before this Court that in case if the petitioner did not succeed in the petition, the petitioner would discharge the obligation for payment of service tax on the royalty.

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