Rajasthan High Court Restrains GST Dept. From Recovery Of GST On Royalty Paid On Account Of Excavation Of Sand For Brick

The petitioner/assessee has filed the writ petition challenging the demand GST on the royalty paid on account of excavation of sand for brick.

The petitioner has submitted that, as per the decision of the Supreme Court in the case of India Cement Ltd. Etc. Vs. State of Tamil Nadu, the royalty is separate and distinct from the land revenue and it is not related to the land as a unit. As such, no tax is to be paid upon the royalty.

The petitioner submitted that the Supreme Court, in Special Leave to Appeal arising out of the judgement of the Rajasthan High Court rendered in the case of Udaipur Chamber of Commerce and Industry Vs. Union of India, has already stayed payment of service tax for the grant of mining lease/royalty.

"Meanwhile, the respondents are restrained from recovering GST on the royalty paid on account of excavation of sand for brick and further proceedings pursuant to the notice dated 15.02.2022 shall remain stayed, "the court said.

Case Title: Shree Basant Bhandar Int Udyog Versus UOI

Case No: D.B. Civil Writ Petition No. 5678/2022

Citation: 2022 LiveLaw (Raj) 146

Dated: 21/04/2022

Counsel For Petitioner: Advocates D.S. Solanki, V.K. Aggarwal