In a recent ruling, the Madras High Court, considering the decision of this court in another case, deferred the orders of GST ( Goods and Services Tax ) adjudication on Seigniorage Fee, Mining Lease until the Supreme Court Ruling of the Nine-judge bench on nature of Royalty.
In the writ petition, the petitioner, C.Srinivasa Moorthy challenged the communication regarding their GST liability under applicable GST laws concerning both seigniorage fee and mining lease amounts paid to the Government.
The petitioner’s counsel cited Notification No.13/2017 – Central Tax (Rate), arguing that GST on mining lease falls under the exclusion for services provided by government entities related to renting of immovable property. Additionally, reference was made to interim orders by the Hon’ble Supreme Court, including SLP(C) No.37326 of 2017, which granted an interim stay on royalty and mining lease matters pending a decision by a nine-judge bench.
Furthermore, the counsel presented a Division Bench Judgment in a series of cases, with A.Venkatachalam v. Assistant Commissioner (ST), Palladam, W.P.No.30974 of 2022 as the lead case.
The Division Bench of this Court issued the following directions at paragraph 9 of the judgment:
“…. (ii) Upon receipt of the objections / representations from the writ petitioners, the authority concerned shall proceed with the adjudication, on merits and in accordance with law, after affording reasonable opportunity of being heard to the petitioners. However, the orders of adjudication shall be kept in abeyance until the Nine Judge Constitution Bench decides the issue as to the nature of royalty.
(iii) It is made clear that there shall be no recovery of GST on royalty until the Nine Judge Constitution Bench takes a decision…
(vi) It is also made clear that all the contentions are left open for the writ petitioners to raise in appropriate proceedings, after the outcome of the decision of the Nine Judge Constitution Bench.”
The bench of Justice Senthilkumar Ramamoorthy observed that “In view of the said judgment, this petition is liable to be disposed of on the same terms insofar as it relates to either the issue of seigniorage fee or mining lease. Consequently, the petitioner is permitted to submit his reply to the intimation within a maximum period of four weeks from the date of receipt of a copy of this order.” Accordingly, the writ petitions were disposed of.
Mr.K.S.Viswanathan for Mr.G.M.Ananthakumar appeared for the petitioner and Mrs.K.Vasanthamala, GA (T) appeared for the respondent.
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