Royalty paid on minerals under the Mines and Minerals (Development and Regulation) Act, 1957, does not constitute a tax, and therefore, transactions involving such payments are not exempt from the applicability of Service Tax.

JUDGMENT

Dated this the 20^th day of May, 2026 This writ petition is submitted by the petitioner, challenging Ext.P6 show cause notice issued to the petitioner, by the 4^th respondent, requiring the petitioner to show cause as to why an amount of ₹2,34,000/- being the Service Tax and Swach Bharat Cess and Krishi Kalyan Cess are not recovered from the petitioner in respect of the Royalty paid by the petitioner, to the Government, under the provisions of the Mines and Minerals (Development and Regulation) Act, 1957. The main challenge raised by the petitioner, on the ground that the Royalty is an amount charged by the Government in pursuance to the Mines and Minerals (Development and Regulation) Act, 1957 and therefore it is a tax. Hence, no liability to pay Service Tax will arise.

2. Today, when the matter came up for consideration, the learned Standing Counsel appearing for respondents 2 to 4, submitted that the issue raised by the petitioner is already decided against it, by the Hon’ble Supreme Court, in the judgment in Mineral Area Development Authority v. M/s.Steel Authority of India and another [2024 KHC Online 6398], where it was held that the Royalty on mineral does not amount to tax.

Taking note of the declaration of the law made by the Hon’ble Supreme Court, this Court dismissed similar writ petitions as per judgment in W.P.(C) Nos.37630/2022 and 21912/2024. In the light of the above, I am of the view that the challenge raised by the petitioner against Ext.P6 show cause notice cannot be considered. Accordingly, this writ petition is dismissed. However, it is clarified that, dismissal of this writ petition will not preclude the petitioner from challenging the statutory provisions, by invoking appropriate remedies.