Page 70 - GSTL_18th June 2020_Vol 37_Part 3

284 GST LAW TIMES [ Vol. 37
[Order]. - These writ petitions under Article 226 of the Constitution of
India have been preferred claiming, in sum and substance, the following reliefs :
“(1) The letter No. P12(52) finance/tax/2017-III, dated 8-11-2017 (Annex.
4) issued by Finance (Tax) Department, Rajasthan Government may
kindly be quashed and set aside.
(2) A clarification may be issued to avoid, double burden on the min-
er/lease holder/end user and suitable amendment in law may be
directed to the respondents.
(3) The respondent authorities may be directed to place before the
Court the correct position of GST collection on royalty. Further,
consequential directions to follow the correct method of GST collec-
tion on royalty may also be issued to the respondent authorities.
(4) Any other order, which this Hon’ble Court deems fit and proper in
the facts and circumstances of the case, may kindly be passed in
favour of the petitioner.
(5) Cost of the writ petition may kindly be allowed in favour of the pe-
titioner.”
2. Precisely, the facts of this case are that the petitioners are engaged in
the business activity of mining and are registered lease holders and have lawful
mining lease in their favour. The respondent-State is empowered to award the
Excess Royalty Collection Contract (ERCC) to the Royalty Contractors. The re-
spondent No. 2 Finance Department, Government of Rajasthan was empowered
to authorize Royalty Contractors to collect GST on the amount of royalty collect-
ed for and on behalf of the Government.
3. The Royalty Contractors (termed as ERCC Contractors) got appoint-
ed by the Government exclusively for collecting the royalty on behalf of the Gov-
ernment from the mining lessee of natural resources without supply of such nat-
ural resources.
4. As per the relevant Rule 2(xxiv) of the Rajasthan Minor Mineral Con-
cession Rules, 2017, “Excess Royalty Collection Contract” being defined means
that a contract to collect royalty in excess of annual dead rent and any other
charges as may be prescribed in the contract, on behalf of the Government for
specified mineral dispatched by the mining lease from the area specified in the
contract (ERCC), the lessee was to pay fixed amount as installments of the Con-
tract awarded to him by the Government upfront or in installments, and DMFT
on actual collection on the basis of his rights to collect the royalty on specified
natural resources from a specified territory. The royalty to be collected by a Roy-
alty Contractor on the mining lease from the natural resources ought to be pre-
determined and as fixed by the Government.
5. The letter of the Finance Department, Government of Rajasthan to
Royalty Contractors became the bone of contention in these writ petitions, as the
same entitled the contractor to collect GST @ 18% as forward charges.
6. Learned Counsels for the petitioners submit that the letter issued by
the Finance Department, Government of Rajasthan to authorize the contractor to
collect the GST on the amount of royalty collected on behalf of the Government
was against the provisions of Section 9(3) of CGST Act, 2017 read with Notifica-
tion No. 13/2017-Central Tax (Rate), dated 28-6-2017.
7. Learned Counsels for the petitioners further pointed out that Section
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