HC Instructs Assessee to Reply to Notices and Directed Authorities to Hold Order Till the Decision on ‘Royalty’ From Constitution Bench

Case Details: N. Muniraj v. Deputy State Tax Officer - [2024] 160 taxmann.com 445 (Madras)

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J.
• V. Sanjeevi for the Petitioner.
• V. Prashanth Kiran, GA (T) for the Respondent

Facts of the Case

The petitioner challenged an intimation from the Department communicating GST liability on seigniorage fee and mining lease amounts paid to the Government for the period 2018-19 to 2022-23. The petitioner relied on Notification No. 13/2017 – Central Tax (Rate) and interim orders of the Supreme Court, arguing that GST on mining lease is excluded as per the notification and that a stay was granted by the Supreme Court pending the decision of a Nine Judge Constitution Bench. The Division Bench’s judgment in Tvl. A. Venkatachalam v. Asstt. Commissioner (ST) was also cited, which directed submission of objections to show-cause notices and keeping orders of adjudication in abeyance until the Nine Judge Constitution Bench decides on the nature of royalty.

High Court Held

The High Court disposed of the petition on similar terms as the aforementioned Division Bench judgment. It permitted the petitioner to submit a reply to the intimation, following the directions of the Division Bench. The Court directed that there should be no recovery of GST on royalty until the Nine Judge Constitution Bench makes a decision. The petitioner was granted the opportunity to raise any contentions in appropriate proceedings following the outcome of the Nine Judge Constitution Bench decision.

List of Cases Reviewed

• Tvl. A. Venkatachalam v. Asstt. Commissioner (ST) [2024] 159 taxmann.com 325/15 Cnetax 216 (Mad.) (Para 4) followed.

List of Cases Referred to

• Tvl. A. Venkatachalam v. Asstt. Commissioner (ST) [2024] 159 taxmann.com 325/15 Centax 216 (Mad.) (para 3).