Tvl Bharat Minerals Company vs. The Assistant Commissioner (St) 2

Facts

The petitioner, Tvl Bharat Minerals Company, represented by its Partner Harihara Mahadevan, filed a writ petition challenging an Assessment Order-in-Original dated 01.09.2025 and a consequential summary in FORM GST DRC-07, both issued by the Assistant Commissioner (ST)-2, Tuticorin. The impugned order was preceded by a Show Cause Notice dated 15.05.2025, for which the petitioner had not availed the personal hearing. The demand confirmed by the respondent pertains to Seigniorage Fee payable for extracting mines. The petitioner contended that the issue of taxability on Seigniorage Fee is pending 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. The petitioner offered to pre-deposit 10% of the disputed tax for de novo adjudication.

Held

The Court quashed the impugned order dated 01.09.2025 and remitted the case back to the respondent for de novo adjudication. The Court noted that the issue of taxability on Seigniorage Fee payable to the Government for extracting mines is pending before the Hon'ble Supreme Court. Following the consistent view of the High Court in similar circumstances, the Court decided to follow the Supreme Court's proceedings. The petitioner was directed to deposit 10% of the disputed tax in cash within thirty days of receiving the order. Additionally, the petitioner was required to file a reply to the Show Cause Notice dated 15.05.2025, treating the impugned order as an addendum, along with supporting documents. The respondent was directed to pass a fresh order on merits and in accordance with law expeditiously, preferably within three months of the petitioner's compliance. The Court also stipulated that if the petitioner fails to comply with the directions, the respondent can proceed to recover the tax as if the writ petition was dismissed. The respondent must provide due notice to the petitioner before passing any final order. The issue of the petitioner's failure to attend the personal hearing was implicitly addressed by allowing them to file a reply to the SCN.

Key Issues

1. Whether the impugned assessment order, which confirms a demand on Seigniorage Fee, is liable to be quashed on the ground that the taxability of such fees is pending adjudication before the Hon'ble Supreme Court? (Question of law) 2. Whether the principles of natural justice have been violated by the respondent in passing the impugned order without considering the pendency of the issue before the Supreme Court and without granting the petitioner an opportunity to present their case in light of the ongoing Supreme Court proceedings? (Question of mixed law and fact) Petitioner's Arguments: The petitioner argued that the issue of whether tax is payable on Seigniorage Fee is currently sub-judice before the Hon'ble Supreme Court in specific writ petitions. They submitted that the impugned order should be quashed or set aside in light of this pending Supreme Court matter. Furthermore, the petitioner expressed willingness to pre-deposit 10% of the disputed tax as a condition for a fresh adjudication. Respondent's Arguments: The respondent, represented by the Government Advocate (Tax), did not record any specific arguments against the petitioner's contentions regarding the pendency of the issue before the Supreme Court or the procedural fairness of the order. The respondent accepted notice and appeared before the Court.