Madhya Pradesh High Court
South Eastern Coal Field Limited vs Commissioner Of Cgst And Central Excise on 11 May, 2026
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2026:MPHC-JBP:35712
1 WP-4514-2023
IN THE HIGH COURT OF MADHYA
PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE DEEPAK KHOT
WRIT PETITION No. 4514 of 2023
SOUTH EASTERN COAL FIELD LTD.
Versus
COMMISSIONER OF CGST AND CENTRAL EXCISE
Appearance:
Shri Rajeev Agrawal - Advocate appearing through Video
Conferencing with Shri Amit Shrivastava - Advocate for the petitioner.
Shri Gajendra S. Thakur - Advocate for the respondent No.1.
WITH
WRIT PETITION No. 4522 of 2023
SOUTH EASTERN COAL FIELD LTD.
Versus
COMMISSIONER OF CGRS AND CENTRAL EXCISE
Appearance:
Shri Rajeev Agrawal - Advocate appearing through Video
Conferencing with Shri Amit Shrivastava - Advocate for the
petitioner.
Shri Gajendra S. Thakur - Advocate for the respondent No.1.
WRIT PETITION No. 4526 of 2023
NEUTRAL CITATION NO. 2026:MPHC-JBP:35712
2 WP-4514-2023
SOUTH EASTERN COAL FIELD LTD.
Versus
COMMISSIONER OF CGST AND CENTRAL EXCISE JABALPUR
Appearance:
Shri Rajeev Agrawal - Advocate appearing through Video
Conferencing with Shri Amit Shrivastava - Advocate for the
petitioner.
Shri Gajendra S. Thakur - Advocate for the respondent No.1.
WRIT PETITION No. 4529 of 2023
SOUTH EASTERN COAL FIELD LTD.
Versus
COMMISSIONER OF CGST AND CENTRAL EXCISE JABALPUR
Appearance:
Shri Rajeev Agrawal - Advocate appearing through Video
Conferencing with Shri Amit Shrivastava - Advocate for the
petitioner.
Shri Gajendra S. Thakur - Advocate for the respondent No.1.
WRIT PETITION No. 5067 of 2023
WESTERN COALFIELDS LIMITED
Versus
COMMISSIONER OF CGST AND CENTRAL EXCISE JABALPUR
Appearance:
Shri Rajeev Agrawal - Advocate appearing through Video
Conferencing with Shri Amit Shrivastava - Advocate for the
petitioner.
NEUTRAL CITATION NO. 2026:MPHC-JBP:35712
3 WP-4514-2023
Shri Gajendra S. Thakur - Advocate for the respondent No.1.
WRIT PETITION No. 5068 of 2023
WESTERN COALFIELDS LIMITED
Versus
COMMISSIONER OF CGST AND CENTRAL EXCISE
Appearance:
Shri Rajeev Agrawal - Advocate appearing through Video
Conferencing with Shri Amit Shrivastava - Advocate for the
petitioner.
Shri Gajendra S. Thakur - Advocate for the respondent No.1.
WRIT PETITION No. 5069 of 2023
WESTERN COALFIELDS LIMITED
Versus
COMMISSIONER OF CGST AND CENTRAL EXCISE JABALPUR
Appearance:
Shri Rajeev Agrawal - Advocate appearing through Video
Conferencing with Shri Amit Shrivastava - Advocate for the
petitioner.
Shri Gajendra S. Thakur - Advocate for the respondent No.1.
WRIT PETITION No. 7091 of 2024
WESTERN COALFIELD LIMITED
Versus
COMMISSIONER OF CGST AND CENTRAL EXCISE JABALPUR
AND OTHERS
Appearance:
NEUTRAL CITATION NO. 2026:MPHC-JBP:35712
4 WP-4514-2023
Shri Rajeev Agrawal - Advocate appearing through Video
Conferencing with Shri Amit Shrivastava - Advocate for the
petitioner.
Shri Gajendra S. Thakur - Advocate for the respondents No.1
and 2.
WRIT PETITION No. 7108 of 2024
SOUTH EASTERN COAL FIELD LIMITED
Versus
COMMISSIONER OF CGST AND CENTRAL EXCISE AND
OTHERS
Appearance:
Shri Rajeev Agrawal - Advocate appearing through Video
Conferencing with Shri Amit Shrivastava - Advocate for the
petitioner.
Shri Gajendra S. Thakur - Advocate for the respondents No.1
and 2.
RESERVED ON : 20.04.2026
PRONOUNCED ON : 11.05.2026
-------------------------------------------------------------------------------------------------
ORDER
Per: Justice Vivek Rusia The petitioners have filed the present Writ Petitions under Article 226 of the Constitution of India, challenging the impugned Orders-in- Original dated 29.12.2022, 27.12.2022, 21.12.2023 and 28.12.2023 despite the availability of an alternate remedy of appeal under section NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 5 WP-4514-2023 107 of the GST Act .
Since identical questions of fact and law are involved in these Writ Petitions, all these matters were heard analogously and are being decided by this common order. For the sake of convenience, facts are being referred to from Writ Petition No.4514/2023.
Facts of the case, in brief, are as follows:-
2. The petitioner - South Eastern Coalfields Limited (in short "SECL") is a Public Sector Undertaking and is a hundred percent subsidiary of Coal India Limited, and is engaged in the business of mining and selling of coal. The coal mines of SECL are spread across two states, namely Chhattisgarh and Madhya Pradesh. SECL operates 60 coal mines, of which 35 are located in Chhattisgarh State, while the remaining 25 are situated in Madhya Pradesh State. Out of these 60 coal mines, 40 are worked by the underground method of mining, while the remaining 20 are Opencast mines. The company is registered as an assessee under the Finance Act, 1994 and the CGST Act.
3. The respondent- GST Authorities issued a demand notice to the petitioner for service tax under Section 73(1) read with Section 73(1A) of the Finance Act, 1994, which are saved by Section 174(2) of the Central Goods and Service Tax Act, 2017 and the jurisdiction of the petitioner-SECL falls under CGST, Jabalpur Commissionerate.
4. The petitioner-SECL, being holder of mining lease/mineral bearing land, has paid various charges such as Royalty, Dead Rent, NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 6 WP-4514-2023 DMF and NMET to the Mining Department of Madhya Pradesh State Government in lieu of assignment of right to use natural resources as per Sections 9, 9(A) (1), 9B & 9C of the Mines And Minerals (Development & Regulation) Act, 1957 respectively. In addition to the above, the petitioner has also paid some other charges in the name of the Madhya Pradesh Gramin Avsanrachna Tatha Sadak Vikash Adhiniyam, 2005 (for short "MPGASTVA, 2005" ) to the Mining department of State Government in lieu of improvement and development of rural infrastructure and roads as per Section 3 read with Section 4 of MPGASTVA, 2005 and in the name of Forest Transit Fee to the Forest Department State Government in lieu of movement of forest produce i.e. coal as per Rule 3 of the Madhya Pradesh Transit (Forest Produce) Rules, 2000.
5. A show cause notice dated 21.10.2021 was issued for the period of April 2016 to June, 2017, vide which it was alleged that the payments made to the State of Madhya Pradesh under the MPGASTVA, 2005 are in the nature of "fee" and not "tax" hence the service tax is liable to be paid to the department. Further, it was also observed that the payments made against the MPGASTVA, 2005 are consideration against the service provided by the Government of Madhya Pradesh. Therefore, the petitioner is liable to pay the service tax under the Reverse Charge Mechanism (for short "RCM"). The proposed demand for service tax is provided as under :-
NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 7 WP-4514-2023 Nature of Amount paid to the Government Proposed Service Tax Payment of M.P. (in Rupees) Demand in SCN (@ 15%) MPGASTVA, Rs.46,43,36,368/- Rs.6,96,50,455/-2005
Total Rs.46,43,36,368/- Rs.6,96,50,455/-
6. Vide letter dated 31.12.2021, the petitioner-SECL filed its response to the aforesaid show cause notice. Apart from that, the petitioner also filed additional submissions dated 12.09.2022. The petitioner-SECL placed reliance on the judgment passed by the Co-
ordinate Bench of this Court in the case of "M/s Neogy & Sons Vs. The State of Madhya Pradesh and Another" in Writ Petition No.10081/2005 dated 18.08.2006 contending that the nature of levy under MPGASTVA is in the nature of "tax" and not the "fee" and therefore, service tax cannot be made leviable on an amount which itself is in the nature of "tax". Further, it was also contended that the Writ Court has considered in detail the arguments put forth on behalf of the petitioner challenging the constitutional validity of the aforesaid Adhiniyam and arguments made by the State defending the same. The Writ Court, while considering the question of vires, dealt with the powers enshrined in the Constitution to the State Legislature to levy "tax" and under "Entries" given in legislative lists.
7. The Competent Authority of GST vide its Order-in-Original No.27-30/COMMR/ST/JBP/2022-23 dated 29.12.2022 has rejected all NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 8 WP-4514-2023 the contentions made by the petitioner. In Para 30(i) of the said Order- in-Original, the Competent Authority observed that since the nature of the levy was not challenged before this Court in M/s Neogy & Sons (supra), the Hon'ble Court did not discuss the nature of the levy under MPGASTVA, 2005. The above observations are incorrect, false and misleading as the Writ Court has clearly examined that the nature of the levy is a "tax on land" under List II, Entry No.49 of the VII Schedule read with Article 246 of the Constitution of India. Further, observation made in Para 30(vii), is as follows "................Therefore I, with due respect to the Hon'ble High Court, find that the true nature of the levy under MPGASTVA Act needs to be examined in the light of the judgments of the Hon'ble Supreme Court on the subject since the true nature of the said levy has not been examined by the Hon'ble High Court in the case of M/s Neogy& Sons Vs. State of Madhya Pradesh as discussed in foregoing paras."
8. The petitioner has filed this writ petition without preferring a statutory appeal u/s 107 of the GST Act on the ground that the respondent- Commissioner, CGST and Central Excise, while passing the Order-in-Original dated 29.12.2022 did not follow the observations made by the Writ Court in M/s Neogy & Sons (supra), which caused jurisdictional error to the extent that the nature of levy under MPGASTVA, 2005 is a "fee" and not a "tax". The respondent has purportedly ignored the binding precedent, as dutifully following it NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 9 WP-4514-2023 would have resulted in dropping the proposed demand raised for payments made against MPGASTVA, 2005. Also, under the Finance Act, 1994, no service tax can be levied on a payment which itself is in the nature of "tax". Hence, the present petition is filed before this Court.
Submissions made by learned counsel for the petitioner.
9. Learned counsel for the petitioner argued that the impugned Order-in-Original dated 29.12.2022 passed is bad in law as the respondent, being a subordinate Authority under the direct superintendence of the Hon'ble jurisdictional High Court is duty-bound to follow its judgments in letter and spirit. Thus, the action of the respondents- Authorities in defying the same is illegal, and the same is liable to be set aside. It is further submitted that the nature of the levy under MPGASTVA, 2005, is a tax on mineral-bearing land, and the action of the respondent's Authorities in holding it to be in the nature of "fee" is in clear defiance of the law pronounced by this Court in the case of M/s Neogy & Sons (supra). Learned counsel further submits that in a hierarchical system, unless and until the operation of a judgment of a subordinate Court is stayed by the Higher Court, the judgment of the subordinate Court has a binding effect on all subordinate Authorities operating under its superintendence and territorial jurisdiction.
Submissions made by learned counsel for the respondents.
10. Learned counsel for the respondent-Authorities refuted that the petitioner might have paid various charges like Royalty, Dead Rent, NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 10 WP-4514-2023 DMF and NMET under the Mines And Minerals (Development And Regulation) Act, 1957, other charges in the name of MPGATSVA, 2005 and Forest Transit Fee to the Forest department of Madhya Pradesh State Government to the Mining department of Madhya Pradesh State Government, but has not paid Service Tax on the amounts of, MPGATSVA and Forest Transit Fee under Reverse Charge Mechanism.
11. Learned counsel for the respondent also submitted that the Mining Department of the State Government is not collecting the MPGATSVA from all the business entities/stakeholders, but it is exclusively being collected from the Mining Lease holders/Licensees only as a minimum annual Royalty. Similarly, the Mining Department of the State Government is not collecting the MPGATSVA from all the business entities/stakeholders, but it is exclusively being collected from the holders of the mineral-bearing land only for providing the services of improvement and development of rural infrastructure and roads in backward and mining areas. Similarly, the Forest Department of the Madhya Pradesh State Government is not collecting the Forest Transit Fee from all the business entities/stakeholders, but it is exclusively being collected from the owners of the forest produce for providing the services of hassle-free movement of forest produce.
12. It is further submitted that, as per the provisions of the Finance Act, 1994, all the aforementioned services appear to be "taxable NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 11 WP-4514-2023 services" provided by the Government to the business entity. Further, the CBEC vide Circular No.192/02/2016-Service Tax dated 13.04.2016 issued under F.No.334/8/2016-TRU clarified on issues regarding regular service tax on the services provided by the Government or a local authority to business entities with effect from 01-04-2016. The issue of "Services provided in lieu of fee charged by Government or a local authority" has explicitly been Clarified at SI.No.5 of the Table of the Para 1 of the Circular No.192/02/2016-Service Tax dated 13.04.2016 that, "any activity undertaken by Government or a local authority against a consideration constitutes a service and the amount charged for performing such activities is liable to Service Tax. It is immaterial whether such activities are undertaken as a statutory or mandatory requirement under the law and irrespective of whether the amount charged for such service is laid down in a statute or not. As long as the payment is made(or fee charged) for getting a service in return (i.e. as a quid pro quo for the service received), it has to be regarded as a consideration for that service and taxable irrespective of by what name such payment is called. It is also clarified that Service Tax is leviable on any payment, in lieu of any permission or license granted by the Government or a local authority," i.e. it was gathered that the petitioner had not paid the due service tax under RCM on the above payments of amount of Dead Rent, MPGASTVA and Forest Transit Fee paid by it to the State Government.
NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 12 WP-4514-2023
13. Learned Government Advocate for the respondent/State submitted that it is within the power of the State legislature to provide for additional resources for development of infrastructure and roads in the rural areas with special emphasis on the backward and mining areas as per Entries No.13, 23, 49 and 50 of the List --II of Schedule --VII to the Constitution of India, 1950. Royalty is not a tax, and there is no overlap. Since the MPGATSVA, 2005 is a tax on land, there is no conflict with the Mines and Minerals (Development and Regulation) Act, 1957. Therefore, in light of the submissions made above, the Hon'ble Court vide order dated 18.8.2006 in the case M/s Neogy & Sons (supra) rightly held that MPGATSVA, 2005 is not ultra vires of the powers of the State Government.
14. Further, learned counsel for the respondent submits that in light of the submissions made above, it is crystal clear that the dispute in the case of M/s Neogy and Sons (Supra) is totally different from the present case and as such, the petitioner cannot rely upon the judgment rendered by this Court in the case of M/s Neogy and Sons (Supra).
Hence, the show cause notice dated 21.10.2021 issued to the petitioner for the demand of service tax on the amount of MPGASTVA paid to the State Government for the financial year 2016-17 to 2017-18 (up to June 2017), which was confirmed vide Order- in- Original dated 29.12.2022, is correct.
Appreciation and Conclusion NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 13 WP-4514-2023
15. The petitioners have filed this petition against the impugned Orders-in-Original dated 29.12.2022, 27.12.2022, 21.12.2023 and 28.12.2023. The said orders are appealable under Section 107 of the Central Goods and Services Tax Act, 2017 and despite that the petitioners have filed these petitions inter alia on the ground that in the case of M/s Neogy and Sons (Supra), this Court held that the amount deposited towards tax collected under MPGASTVA Adhiniyam, 2005 is a "tax on land" under Entry No.49 of List II of Schedule VII to the Constitution of India.
16. Learned counsel for the petitioners has argued that the Service Tax is leviable under the provisions contained in Section 56 of the Finance Act, 1994 (Service Tax Act) on the services provided by the Government for a consideration and as per the Circular dated 13.04.2016 (Annexure- R/1), the taxes, cess or duties levied are not consideration for particular service, as such are not leviable to the Service Tax. The State Government has imposed the tax on coal-bearing land and mineral bearing land under MPGASTVA, 2005 and is levying a tax without rendering any service to the holders of the land for mining purposes. Therefore, no service tax is liable to be paid by the petitioners.
17. According to the respondents, in lieu of the charges and the collection of the levy of MPGASTVA, the State Government is providing the services of improvement and development of rural infrastructure and roads in backward and mining areas. Hence, the NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 14 WP-4514-2023 mineral-bearing landholders appear to be direct beneficiaries of such development, especially in rural and mining areas. Therefore, they are liable to pay the service tax on the tax collected under the MPGASTVA, 2005. The learned Authorities, while passing the aforesaid orders-in- original, have placed reliance on a judgment passed by the Apex Court in the case of "State of Rajasthan Vs. Sajjan Lal, [AIR 1975 SC 706]" in which the Apex Court has considered the difference between "Tax" and "Fee". The Apex Court held that the essence of compulsion and imposition made for a public purpose without reference to any special benefit to be conferred on the payer of tax, and the fee, on the other hand, is a payment for a special benefit or privilege which the individual receives.
18. The learned Authority has held that in the case of M/s Neogy and Sons (Supra), the Division Bench of this Court only held that the MPGASTVA, 2005 is intra vires, but the effect of service tax is liable to be decided by the Competent Authorities under the Goods and Services laws. The petitioners have approached this Court only on the plea that this Court in the case of M/s Neogy and Sons (Supra) held that the nature of levy under the MPGATSVA is a tax on land; therefore, the GST is not liable to be paid by the petitioners. The orders-in-original passed by the respondent-Authority are not orders without duration. The learned Authority has given its own interpretation to the amount collected under the Act and its utilisation. The said view is liable to be NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 15 WP-4514-2023 re-examined by the Appellate Authority and thereafter, the GST Tribunal.
19. In the case of M/s Neogy and Sons (Supra), the validity of MPGASTVA, 2005, was challenged on the ground of the competency of the State Government to levy a tax on a mineral. The Division Bench examined whether this tax is on land or on a mineral under the MPGASTVA, 2005 and finally concluded that it was a tax on the land and also held that the power of Union to regulate and control does not result in depriving the State of its power to levy tax or fee within their legislative competence.
20. The State Government enacted the Madhya Pradesh Gramin Avsanrachna Tatha Sadak Vikas Niyam, 2005, to provide for additional resources for the development of infrastructure and roads in rural areas with special emphasis on the backward and mining areas of the State. The Madhya Pradesh Gramin Avsanrachna Tatha Sadak Vikash Adhiniyam, 2005, is a legislation of the State Government for providing additional resources for the development of infrastructure and roads in rural areas with special emphasis on backward and mining areas of the State. Under the said Adhiniyam, Section 3 provides for "Levy of Tax" , Section 4 deals with "Payment and Recovery of tax" and Section 8 deals with "Utilisation of Tax proceeds". By enacting this legislation, the State Government has acted within its legislative competence to raise additional financial resources. The levy imposed under the Act is in the NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 16 WP-4514-2023 nature of a tax intended to create a fund for development of rural infrastructure and roads in rural and mining areas within the State of M.P.. It can be understood as a tax linked to land bearing minerals, as the burden of the levy is associated with such land. Section 2(i) of the Madhya Pradesh Gramin Avsanrachna Tatha Sadak Vikas Niyam, 2005 (for short "Niyam, 2005") defines "Mining Area" means area in a district where mineral exploitation is being carried out and as per definition provided in Section 2(j) of the Niyam, 2005, "Rural Area" means any area other than the area comprised within the territorial area of a Municipality or a Nagar Panchayat or a Municipal Corporation. Section 2(g) thereof defines the tax, according to which the rural infrastructure and road development tax is levied under Section 3, and as per Section 3, of the MPGATSVA there shall be levied and collected a rural infrastructure and road development tax on all mineral bearing land. Section 8 of the MPGATSVA provides utilisation of the tax proceeds, according to which the proceeds of tax shall be utilised by the State Government for improvement and development of infrastructure and roads in rural areas, backward areas, and mining areas. Rule 16 of Niyam, 2005 provides the "Constitution of the Rural Infrastructure Development Tax Fund" for the purpose of utilisation of the fund and as per Rule 17, the fund shall be utilised for implementation of Rural Infrastructure and Road Development programmes in the rural areas, backward areas and mining areas of the NEUTRAL CITATION NO. 2026:MPHC-JBP:35712 17 WP-4514-2023 State. Therefore, the respondent-Authority has rightly observed that the petitioners being mining holders, would be beneficiaries of this development. Hence, it is a "Service" provided to them for which this tax is being collected. Therefore, such an opinion has not been formed contrary to the judgment passed in the case of M/s Neogy and Sons (Supra).
21. Apart from that, the effect of Circular dated 13.04.2016 is also liable to be considered by the Appellate Authority. As held above, the competency of the respondent-Authority has not been challenged while passing the orders-in-original dated 29.12.2022, 27.12.2022, 21.12.2023 and 28.12.2023.
22. Therefore, in our considered opinion, the Writ Petition No.4514/2023, along with connected Writ Petitions, are not maintainable for want of an alternate and efficacious remedy of appeal. In view of the above, these petitions are dismissed with liberty to file an appeal before the Appellate Authority within 60 days from the date of passing of this order.
23. With the aforesaid liberty, all the connected Writ Petitions are dismissed.
(VIVEK RUSIA) (DEEPAK KHOT)
JUDGE JUDGE
Shivani
Digitally signed by SHIVANI TIWARI
Date: 2026.05.12 12:19:24 +05'30'
NEUTRAL CITATION NO. 2026:MPHC-JBP:35712
18 WP-4514-2023