Allahabad HC stays GST demand on payment of Royalty to conduct Mining activity

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The Allahabad High Court bench of Justice Saumitra Dayal Singh has stayed the GST demand on payment of royalty to conduct mining activity.

The petitioner/assessee has assailed the appeal order. Since the Tribunal was yet to be constituted, the writ petition was entertained. The First Appeal Order arising from the earlier order under Section 73 of the U.P. GST Act, 2017 was also challenged. 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.

The court held that the matter requires consideration both on the issue of liability to pay GST and royalty as well as jurisdictional error in the second proceeding for the tax period.

The court, while listing the matter on September 07, 2022, granted six weeks’ time to the department to file a counter affidavit and directed the petitioner to file a rejoinder affidavit within two weeks.

Case Title: M/s Jitendra Singh Versus Union of India

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