Chinnaraja.M v. The Commissioner / Additional Chief Secretary

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED :13.10.2022

CORAM

THE HONOURABLE MR.JUSTICE MOHAMMED SHAFFIQ and W.M.P.(MD)No.17657 of 2022 M.Chinnaraja ... Petitioner Vs.

1.The Commissioner/ Additional Chief Secretary Commercial Tax Department, Ezhilagam, Chepauk, Chennai.

2.The State Tax Officer, O/o.The Assistant Commissioner, (ST), Theni-2 ... Respondents PRAYER : Petition filed under Article 226 of the Constitution of India praying for issuance of Writ of Certiorari, to call for the records pertaining to the impugned notice issued by the 2nd respondent dated 09.09.2022 and quash the same.

For Petitioner :Mr.Sricharan Rangarajan For Respondents :Mr.M.Ramesh, Government Advocate

O R D E R

This writ petition is filed against the impugned notice issued by the 2nd respondent dated 09.09.2022.

2.The petitioner is running a quarry after duly obtaining necessary licence/permit as per Tamil Nadu Minor and Mineral Concession Rules 1959, for five years from District Collector, vide proceedings in Na.Ka.No. 127/Mines/2018 dated 25.01.2019.

3.The learned counsel for the petitioner submits that the petitioner is compelled by the respondents to register its quarry operations under the GST Act 2017 and is instructed to pay the GST on Seigniorage Fee paid to the Geology and Mining Department. It is submitted that Seigniorage Fee is itself a tax on quarried minor mineral and hence the levy of GST is unsustainable. Further, the said issue of legality of levy of GST on Seigniorage Fee is pending consideration before the Hon'ble Apex Court in W.P.(Civil).No.1076 of 2021 in the case of M/s Lakhwinder Singh Vs Union of India dated 04.10.2021.

4. The Hon'ble Apex Court has granted stay of payment of GST for grant of mining lease/royalty by the petitioner, which has been followed by various Courts. It was submitted that the respondent is demanding tax on Seigniorage Fee and also on minerals quarried and disposed. It was further submitted that levy and collection of tax/sales tax on minerals is not permissible as per judgement of the Hon'ble Apex Court in the case of India Cement Ltd. and others Vs State of Tamil Nadu and others reported in 1990 (1) SCC 12. The issue as to the true nature of royalty/dead rent payable on minerals/ produced/mined/extracted is submitted to be referred by the Hon'ble Apex Court for consideration to a larger bench consisting of 9 Judges in the case of Mineral Area Development Authority etc., Vs. M/s.

Steel Authority of India & others reported in 2011 (4) SCC 450, wherein, the Hon'ble Supreme Court was pleased to place the matter on the administrative side before the Chief Justice for appropriate orders. 4.Mr.M.Ramesh, learned Government Advocate, takes notice for the respondents and submitted that this is only a notice and thus the Writ petition is premature and liable to be dismissed.

5.Considering materials available on records, it is seen that the Hon'ble Apex Court in the case of M/S.Lakhwinder Singh Vs. Union of India and others, had granted stay for payment of GST for grant of mining lease/royalty by the petitioner. Further, it is seen that the impugned proceeding is only a notice. The petitioner shall submit his objections to the notice within a period of 30 days from the date of receipt of a copy of this order. It is open to the petitioner to place reliance upon the judgement in the case of M/S.Lakhwinder Singh Vs. Union of India and others, and any other judgments which the petitioner intends to. If any such objection is filed, the 2nd Respondent shall consider the same and pass appropriate orders. Until the disposal of the objections, the Respondents shall not resort to recovery proceedings. It is made clear that this Court has not expressed any views with regard to the merits and it is open to the Respondents to consider the issue raised on its own merits.

6. With the above direction, this writ petition is disposed of. No costs. Consequently, connected Writ Miscellaneous Petition is closed. 13.10.2022 Index : Yes / No Speaking Order : Yes / No sbn To 1.The Commissioner/Additional Chief Secretary Commercial Tax Department, Ezhilagam, Chepauk, Chennai.

2.The State Tax Officer, O/o.The Assistant Commissioner, (ST), Theni-2

MOHAMMED SHAFFIQ, J.

sbn and W.M.P.(MD)No.17657 of 2022 13.10.2022