P. Saravanan Vs State Tax Officer
Date: July 8, 2024
Court: High Court
Bench: Madras
Type: Writ Petition
Subject Matter
Adjudication on GST on Mining Lease deferred pending SC’s ruling
Summary
The case of P. Saravanan Vs State Tax Officer delves into the issue of whether GST should be levied on payments made for mining leases to the government. The petitioner argues that such payments should be exempt from GST based on Notification No. 13/2017, which excludes GST for services provided by government entities, particularly in the context of renting immovable property to businesses. The petitioner further supports their argument by referencing a Supreme Court interim order that stays not just the royalty payments but also the GST related to mining leases, indicating ongoing legal disputes and considerations. Discussing additional relevant case law, notably Venkatachalam v. Assistant Commissioner (ST) and Palladam, the petitioner underscores a shared legal precedent that contributes to the case's context. The government advocate, Mrs. K. Vasanthamala, concedes to the petitioner's points during the proceedings. The Madras High Court's Division Bench then directed that the petitioner submit objections concerning GST-related show cause notices within a specified time frame, signaling that the court is open to reviewing the arguments concerning the imposition of GST on mining lease payments.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
In this writ petition, the petitioner has assailed the impugned order levying GST in respect of the mining lease amount paid by the petitioner to the Government.
2. Learned counsel for the petitioner relies on Notification No.13/2017 – Central Tax (Rate) insofar as the claim relates to GST on mining lease and points out that services supplied by the Central, State Government or local authority to a business entity by way of renting of immovable property is excluded from GST. Reliance is also placed on interim orders issued by the Hon’ble Supreme Court in a batch of cases, including SLP(C) No.37326 of 2017 to contend that the Supreme Court has granted an interim stay not only in respect of royalty but also in respect of mining lease. It is stated that the nine judge bench is scheduled to hear the batch of cases.
3. Learned counsel further placed for consideration the Division Bench Judgment in a batch of cases where the lead case is Venkatachalam v. Assistant Commissioner (ST), Palladam, in W.P.No.30974 of 2022.
4. Mrs. K. Vasanthamala, learned Government Advocate, accepts notice for the respondent.
5. The Division Bench of this Court issued the following directions at paragraph 9 of the judgment:
“9. In these circumstances, we deem it fit and appropriate to issue the following directions:
(i) In the cases, where the challenge is made to the show cause notices, the writ petitioners shall submit their objections / representations within a period of four weeks from the date of receipt of a copy of this order.
(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.
(iv) Needless to state that on the matters being decided, the writ petitioners if still aggrieved, shall redress their grievance(s), if any, before the appropriate forum, including by filing appeal(s).
(v) Insofar as the challenge to the notification as well as the circular, it is open to the writ petitioners to act upon, after the outcome of the case pending before the Nine Judge Constitution Bench.
(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.”
6. In view of the said judgment, this petition is liable to be disposed of on the same terms. Consequently, in this case, 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.
7. W. P.No.16624 of 2024 is disposed of on the above terms. No costs. Consequently, connected miscellaneous petitions are closed.