GUJMIN INDUSTRY ASSOCIATION Vs. UNION OF INDIA

JUDGEMENT

(1.) Mr. Nikunt Raval, learned Standing Counsel for the respondent No.1 has tendered affidavitinreply of the respondent No.1 in Special Civil Application No.8167 of 2017. The same is taken on record.

(2.) Heard Mr. Mihir Joshi, Senior Advocate, learned counsel with Mr. S. N. Thakkar, learned advocate for the petitioners in Special Civil Application No.8167 of 2017, Mr. Sahil Shah, learned advocate for the petitioners in Special Civil Applications No.4603 of 2017 and 4606 of 2017 and Mr. Nikunt Raval, learned Standing Counsel for the respondent No.1, Mr. Ankit Shah, learned Standing Counsel for the respondent No.2 and Mr. Dhaval Vyas, learned Standing Counsel for the respondent No.3 in each of the petitions.

(3.) Mr. Mihir Joshi, learned counsel for the petitioners submitted that royalty is not a payment in respect of any taxable service at all and it is imposed under section 9 of the Mines And Minerals (Development And Regulation) Act, 1957 (hereinafter referred to as the 'Act') in respect of any mineral "removed or consumed" by the holder of a mining lease from the leased area, at the rate specified in the Second Schedule. It was submitted that royalty is to be computed on ad valorem basis in the manner prescribed under rule 64D of the Mineral Concession Rules. Clearly, therefore, royalty is a price of winning minerals from the land and represents the State's share in such minerals and that there is no element or provision of any service by the State in this respect and the levy of Service Tax is clearly ultra vires the Act.