• Notification Date: 16-05-2022
• Notification No: N/A

Allahabad High Court Has Put a Stay Order on Royalty Payment for Mining Activity

The Allahabad High Court has passed a stay order on the GST demand on payment of royalty for the conduction of mining activity. The petitioner has appealed the court. The writ petition was entertained by the High Court since the Tribunal has not been constituted yet. As a result, the First Appeal Order that has arisen from the earlier order, issued under Section 73 of the U.P. GST Act, 2017, has also faced challenge. The petitioner has also been countered by the ex parte order that has been passed by the State GST authorities in accordance with a notice issued by the authority. Both the proceedings were declared to be held for the same tax period. The proceedings were concerned to the Financial Year 2017-2018.

In the petition, the writ petitioner has mentioned that there were no GST liabilities that have arisen from royalty payment for conducting mining activities. The petitioner had then trusted the decision that was declared by the Supreme Court. The order was passed for the case of A.D. Agro Foods Pvt. Ltd. versus Union of India and it was related to a similar matter. In this case, the payment of GST for grant of royalty/lease for mining activity was stayed by the Court. According to the court order, the matter requires more considerations regarding issue of liability to pay GST and royalty, as well as jurisdictional error in the second proceeding for the tax period. While listing the present case on 7 September, 2022, the Court has granted a period of six weeks to the department. The time has been allotted to file a counter affidavit and the court has directed the petitioner to file a rejoinder affidavit within a couple weeks.