M/S. S.S.R.Blue Metals vs. The Deputy State Tax Officer (St) - 1
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The petitioner, M/s. S.S.R. Blue Metals, represented by its Proprietor, filed a writ petition challenging an order dated June 22, 2026, issued by the Deputy State Tax Officer (ST) – 1. This order confirmed a demand, which was preceded by a Show Cause Notice dated January 28, 2026. The petitioner had not availed the opportunity for a personal hearing offered in response to the Show Cause Notice. The demand pertains to Seigniorage Fee payable to the Government for extracting mines. The judgment notes that the issue of whether tax is payable on Seigniorage Fee is pending before the Supreme Court in two cases: M/s Lakhwinder Singh v. Union of India and Udaipur Chambers of Commerce and Industry v. Union of India.
Held
The Court quashed the impugned order dated June 22, 2026, and remitted the case back to the respondent for passing a fresh order. This decision was based on the pendency of the core issue regarding the taxability of Seigniorage Fee before the Hon'ble Supreme Court. The Court noted that it was inclined to follow the consistent view of the High Court under similar circumstances. The petitioner was directed to deposit 10% of the disputed tax in cash from their Electronic Cash Register within thirty days of receiving a copy of the order. Additionally, the petitioner was required to file a reply to the Show Cause Notice dated January 28, 2026, along with supporting documents, treating the impugned order as an addendum to the Show Cause Notice. If these stipulations were met, the respondent was to pass a fresh order on merits expeditiously, preferably within three months of the reply/pre-deposit. Failure to comply would allow the respondent to recover the tax as if the writ petition was dismissed. The Court expressly left undecided the merits of the tax demand itself, pending the Supreme Court's decision.
Key Issues
1. Whether the impugned order dated June 22, 2026, issued by the Deputy State Tax Officer (ST) – 1, is without jurisdiction and in clear violation of statutory provisions? (Question of law) Petitioner's contention: The petitioner argued that the impugned order is without jurisdiction and violates statutory provisions. The petitioner also made an endorsement undertaking to pay 10% of the tax. The petitioner relied on the pendency of the issue before the Hon'ble Supreme Court in M/s Lakhwinder Singh v. Union of India and Udaipur Chambers of Commerce and Industry v. Union of India. Respondent's contention: The respondent, represented by the Government Advocate (Taxes), did not record any specific arguments against the petitioner's contentions. The respondent took notice of the writ petition.
Sections Cited
GST DRC 01
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER M/s.P.Sudarkodinachiar, learned Government Advocate (Taxes) takes notice for the respondent. 1/6
This Writ Petition is taken up for final hearing at the time of admission with the consent of the learned counsel for the petitioner and the learned Government Advocate (Taxes) for the respondent.
In this Writ Petition, the petitioner has challenged the impugned Assessment in GSTIN 33BCKPS9721B1ZL/2020-21 dated 22.06.2026 of the Respondent, which was preceded by a Show Cause Notice in GST DRC 01 dated 28.01.2026 wherein the petitioner was also called upon to appear for personal hearing. However, the petitioner had not taken advantage of the same and thus, suffered the Impugned Order dated 22.06.2026. 4. It is noticed that the demand has been confirmed on the Seigniorage Fee payable to the Government for extracting mines. The issue is now pending before the Hon’ble Supreme Court in M/s Lakhwinder Singh v. Union of India (W.P. Civil No. 1076 of 2021) and Udaipur Chambers of Commerce and Industry v. Union of India.
Since the issue is now pending before the Hon’ble Supreme 2/6 Court as to whether the tax is now payable or not on the Seigniorage Fee payable, I am inclined to follow the consistent view of this Court under the similar circumstances.
The learned counsel for the petitioner has also made an endorsement to that effect in the Court Bundle, which is extracted hereunder:-
“Petitioner undertakes to pay 10% of tax.”
In view of the above, the impugned order is quashed and the case is remitted back to the respondent to pass a fresh order subject to the petitioner depositing 10% of the disputed tax in cash from the petitioner's Electronic Cash Register within a period of thirty (30) days from the date of receipt of a copy of this order. 8.Within such time,the petitioner shall also file a reply to the Show Cause Notice in GST DRC 01 dated 28.01.2026 together with requisite documents to substantiate the case by treating the Impugned Order dated 22.06.2026 as an addendum to the Show Cause Notice dated 28.01.2026. 3/6
In case the petitioner complies with the above stipulations, the respondent shall proceed to pass a final order on merits and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months of such reply / pre-deposit.
In case the petitioner fails to comply with any of the stipulations, the respondent is at liberty to proceed against the petitioner to recover the tax in accordance with law as if this Writ Petition was dismissed in limine today.
Needless to state, before passing any such order, the ... respondent shall give due notice to the petitioner.
This Writ Petition stands disposed of, with the above observations. No costs. Consequently, connected Writ Miscellaneous Petition is closed. 12.08.2026 CM 4/6 TO The Deputy State Tax Officer(ST) – 1, Commercial Taxes Building, Srivilliputhur.. 5/6 C.SARAVANAN,J CM and WMP(MD)No.17132 of 2026 Date : 12/08/2026 6/6
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.