HC Stayed Recovery Against Order of Levy of GST on Seigniorage Fee and Mining Lease in Light of Pendency of Decision of SC

Case Details: C. Srinivasa Moorthy v. Deputy State Tax Officer - [2024] 163 taxmann.com 786 (Madras)

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J.
• K.S. Viswanatha Abirami & G.M. Ananthakumar for the Petitioner.
• Mrs. K. Vasanthamala, GA (T) for the Respondent.

Facts of the Case

The petitioner challenged the intimation of tax liability under GST on seigniorage fees and mining lease amounts paid to the government. It contended that services supplied by the Central, State Government, or local authority to a business entity by way of renting of immovable property are excluded from GST. The petitioner also relied on a batch of cases pending before the Hon’ble Supreme Court and contended that the Supreme Court has granted an interim stay not only in respect of royalty but also in respect of mining leases.

High Court Held

The High Court noted that in the batch of cases pending before the Hon’ble Supreme Court of India, it was held by the Supreme Court that there shall be no recovery of GST on royalty until the Nine-Judge Constitution Bench takes a decision.

Therefore, the High Court held that this petition is liable to be disposed of on the same terms set out by the Supreme Court of India in their judgment, as it relates to the issue of either seigniorage fees or mining leases.

List of Cases Reviewed

• A. Venkatachalam v. Assistant Commissioner (ST), Palladam, in W.P. No. 30974 of 2022 [Para 5] followed.