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Applicability of GST On Royalty On Mining: Allahabad High Court Directs Assessee To Reply To SCN

Mariya Paliwala
17 May 2022 3:00 PM GMT
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The Allahabad High Court bench of Justice Devendra Kumar Upadhyaya and Justice Brij Raj Singh, while dealing with the issue of the applicability of GST on royalties on mining, has directed the assessee to reply to the show cause notice issued by the department.

The petitioner/assessee is in the business of mining sand from the sites licenced to them by the government and is also engaged in the trading of sand.

The petitioner has been issued a Demand-cum-Show Cause Notice alleging non-payment and evasion of payment of service tax. The notice also required the petitioner to show cause why payment of service tax amounting to Rs. 37,20,269, payable by the petitioner on the royalty paid by the petitioner to the State Government for mining operations and interest payable not be demanded and recovered by the department.

The petitioner contended that in terms of the provisions contained in the Goods and Service Tax Act, no goods and services tax was leviable on the amount of royalty paid for undertaking mining operations in respect of minor minerals.

"We provide that in the meantime, the petitioner shall submit a reply to the show cause notice dated 23.03.2022, which is under challenge and the proceedings pursuant to the show cause notice shall go on. However, till the next date of listing, no final orders shall be passed by the authority concerned," the court said.

The court directed the department to file the counter affidavit within four weeks.

Case Title: M/s Ashish Pandey Versus UOI

Citation: Writ Tax No. 93 of 2022

Dated: 16.5.2022

Counsel For Petitioner: Advocate Pranjal Krishna

Counsel For Respondent: A.S.G.I.,Digvijay Nath Dubey

Click Here To Read/Download Order

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