Allahabad High Court stays GST on royalty to conduct mining action

Allahabad High Court stays GST on royalty to conduct mining action

The petitioner had cited an earlier order passed by the Supreme Court

The Allahabad High Court has stayed the Goods and Services Tax (GST) demand on payment of the royalty to conduct the mining activity.

The petitioner/assessee had challenged the First Appeal Order arising from the order under the Uttar Pradesh GST Act, 2017. Pursuant to notice, he also challenged the ex parte order passed by the State GST authorities. The proceedings related to the Financial Year 2017-18.

The petitioner contended that no GST liability could arise from the payment of a royalty to conduct the mining activity. He relied on the decision of the Supreme Court in an earlier case in which the petitioner's GST payment for the grant of mining lease/royalty was stayed.

While ruling, Justice Saumitra Dayal Singh observed, "The matter requires consideration, both on the issue of the liability to pay GST and royalty, and also the jurisdictional error in the second proceeding for the same tax period."

As prayed by the standing counsel, while granting six weeks to file a counter affidavit to the department, the court said that the petitioner would have two weeks to file a rejoinder affidavit.