• Notification Date: 11-04-2024
• Notification No: N/A

Madras HC Restrained Tamil Nadu Govt from Recovering GST on Mining Lease Royalty

A division bench of the Madras High Court, consisting of Justices R Mahadevan and Mohammed Shaffiq, has restrained Tamil Nadu government from recovering the GST on seigniorage/royalty towards mining leases until a constitution bench of the Supreme Court takes a decision on the issue. 

The order was passed on Thursday on a batch of petitions filed by the private lease holders who challenged GST levying on seigniorage/royalty for mining leases. 

“It is made clear that there shall be no recovery of GST on royalty until the nine-judge Constitution bench takes a decision,” the order stated. 

It ordered the petitioners to submit their objections/representations within four weeks to the show-cause notices sent by the authorities concerned. Upon receipt of the objections/representations, the authorities shall proceed with the adjudication on the merits after affording reasonable opportunity to hear them. 

However, the adjudication orders shall be kept in abeyance until the bench decides on the issue. The petitions have been filed challenging the vires of certain provisions in 2017 government order as amended in 2018, a 2021 circular issued by the Central Board of Excise and Customs, the show cause notices proposing to levy GST on mining lease/royalty, and adjudication orders levying/demanding GST on mining lease/royalty.