Tvl Bharat Minerals Company vs. The Assistant Commissioner (St) 2
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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, issued by the Assistant Commissioner (ST) - 2, Tuticorin. The impugned order was preceded by a Show Cause Notice dated 15.05.2025. The demand confirmed in the order pertains to Seigniorage Fee payable for extracting mines. The petitioner had not availed the personal hearing offered in response to the Show Cause Notice. The petitioner agreed to pre-deposit 10% of the disputed tax amount.
Held
The Court quashed the impugned order dated 01.09.2025 and remitted the case back to the respondent for a fresh adjudication. This decision was based on the pendency of the issue concerning the taxability of Seigniorage Fee 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 Court noted its inclination to follow the consistent view of the High Court in similar circumstances. The quashing was conditional upon the petitioner depositing 10% of the disputed tax in cash within thirty days. The petitioner was also directed to file a reply to the Show Cause Notice within the same period, treating the impugned order as an addendum. The respondent was directed to pass a final order on merits within three months of the petitioner's compliance, after giving due notice. The Court also stipulated that if the petitioner failed to comply, the respondent could proceed to recover the tax as if the writ petition was dismissed. No issue was expressly left undecided, as the primary issue of taxability of Seigniorage Fee was pending before the Supreme Court.
Key Issues
1. Whether the impugned order dated 01.09.2025, which confirmed a demand on Seigniorage Fee, is liable to be quashed for gross violation of principles of natural justice, judicial discipline, arbitrariness, perversity, and violation of Articles 14 and 19(1)(g) of the Constitution? Petitioner's contention: The petitioner argued that the order was passed in gross violation of principles of natural justice, judicial discipline, and was arbitrary, perverse, and violative of constitutional rights. The petitioner also agreed to pre-deposit 10% of the disputed tax as a condition for de novo adjudication. Respondent's contention: The respondent, represented by the Government Advocate (Tax), did not record any specific arguments against the petitioner's claims. However, the respondent's counsel took notice for the respondent and the matter proceeded for final hearing.
Sections Cited
Section 14, Section 19(1)(g)
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Before: and
M/s.P.Sudarkodi Natchiyar, learned Government Advocate (Tax), takes notice for the respondent.
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 learned Government Advocate (Tax) for the respondent.
In this Writ Petition, the petitioner has challenged the impugned Assessment Order-in-Original dated 01.09.2025 bearing reference in GSTIN 33AADFB4868J2ZB/2020-21 along with the consequential summary of the order in FORM GST DRC-07 bearing Ref.No.ZD330925013247H dated 01.09.2025 of the respondent, which was preceded by a Show Cause Notice in DRC 01 dated 15.05.2025 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 01.09.2025. 4. It is noticed that the demand has been confirmed on the Seigniorage Fee 2/6 https://www.mhc.tn.gov.in/judis 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 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.
At this stage, the learned counsel for the petitioner submits that the petitioners are willing to pre-deposit 10% of the disputed tax as a condition for de novo adjudication.
The learned counsel for the petitioner has also made an endorsement to that effect in the Court Bundle, which is extracted hereunder:-
“Agree to pay 10% of the tax.”
In view of the above, the impugned order is quashed and the case is 3/6 https://www.mhc.tn.gov.in/judis remitted back to the respondent to pass a fresh order subject to the petitioner depositing 10% of the disputed tax in cash as undertaken within a period of thirty (30) days from the date of receipt of a copy of this order.
Within such time, the petitioner shall also file a reply to the Show Cause Notice in DRC 01 dated 15.05.2025 together with requisite documents to substantiate the case by treating the Impugned Order dated 01.09.2025 as an addendum to the Show Cause Notice dated 15.05.2025. 10. 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. 4/6 https://www.mhc.tn.gov.in/judis
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. Index : Yes / No 10.08.2026 Internet : Yes / No (1/4) apd To The Assistant Commissioner (ST) - 2, Office of the Assistant Commissioner (State Tax) 2, Tuticorin-628 001. 5/6 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
apd
2026 (1/4) 6/6 https://www.mhc.tn.gov.in/judis
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.