R.Satheesh vs. The State Tax Officer
Original PDF →Facts
The petitioners, legal representatives of the deceased assessee P. Rajendra Prasath, challenged an order of demand proceedings dated 21.12.2025, passed by the State Tax Officer, Madurai Rural (West). The demand was confirmed on Seigniorage Fee payable for mining extraction. The petitioners had previously filed a reply to a notice dated 11.09.2025, stating the assessee's death on 03.10.2022, but this reply did not address the allegations in the show cause notice. The issue regarding the taxability of Seigniorage Fee was pending before the Supreme Court. The petitioners offered to pre-deposit 10% of the disputed tax for de novo adjudication.
Held
The Court quashed the impugned order dated 21.12.2025 and remitted the matter back to the respondent for fresh adjudication. This decision was based on the fact that the issue of taxability of Seigniorage Fee was pending before the Supreme Court. The Court also considered the petitioners' undertaking to pre-deposit 10% of the disputed tax in cash within thirty days of receiving the order. The petitioners were directed to file a reply to the Show Cause Notice dated 11.09.2025, along with supporting documents, treating the impugned order as an addendum. The respondent was instructed to pass a final order on merits within three months of the reply and pre-deposit, after giving due notice. Failure to comply with these stipulations would allow the respondent to proceed with recovery as if the writ petition was dismissed. The ratio decidendi is that in cases where a significant legal issue is pending before the Supreme Court and the assessee has undertaken pre-deposit, a remittance for fresh adjudication is appropriate, subject to compliance with stipulated conditions.
Key Issues
1. Whether the impugned order of demand proceedings dated 21.12.2025, passed by the respondent, is illegal, arbitrary, and without jurisdiction, warranting quashing and remittance for fresh adjudication, considering the pendency of the issue before the Supreme Court and the death of the original assessee? (Mixed question of law and fact, concerning principles of natural justice, jurisdiction, and the effect of death of assessee). Petitioner's arguments: The petitioners argued that the impugned order was illegal and arbitrary. They relied on the fact that the issue of taxability of Seigniorage Fee was pending before the Supreme Court, suggesting a stay or deferral of proceedings. They also highlighted the death of the assessee and their willingness to pre-deposit 10% of the disputed amount as a condition for fresh adjudication. Respondent's arguments: The respondent did not explicitly record arguments. However, the judgment notes that Section 93(1)(b) of the respective GST enactments, 2017, makes legal representatives liable for tax due if the business is discontinued.
Sections Cited
Section 93(1)(b)
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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 petitioners and the learned Government Advocate (Tax) for the respondent.
In this Writ Petition, the petitioners, who are the legal representatives of the deceased assessee, namely, P.Rajendra Prasath, who died on 03.10.2022, have challenged the impugned Assessment Order in FORM GST DRC-07 dated 21.12.2025 bearing Ref.No.33AFFPR4783M1ZV/2021-22 of the respondent issued against their father. 2/6 https://www.mhc.tn.gov.in/judis
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.
It is noticed that after the death of deceased assessee, in response to the notice in DRC 01 dated 11.09.2025, a reply was also filed by stating that the assessee had expired on 03.10.2022. The reply is not meeting the allegations in the Show Cause Notice in DRC 01. 6. It is however noticed that as per Section 93(1)(b) of respective GST enactments, 2017, if the business carried on by the deceased assessee is discontinued, the legal representatives are liable to pay the tax due.
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 petitioners submits that the 3/6 https://www.mhc.tn.gov.in/judis petitioners are willing to pre-deposit 10% of the disputed tax as a condition for de novo adjudication.
The learned counsel for the petitioners has also made an endorsement to that effect in the Court Bundle, which is extracted hereunder:-
“It is submitted that the petitioner undertakes to deposit 10% of disputed amount.”
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 petitioners 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 petitioners shall also file a reply to the Show Cause Notice in DRC 01 dated 11.09.2025 together with requisite documents to substantiate the case by treating the Impugned Order dated 21.12.2025 as an addendum to the Show Cause Notice dated 11.09.2025. 12. In case the petitioners complie with the above stipulations, the 4/6 https://www.mhc.tn.gov.in/judis 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 petitioners fail to comply with any of the stipulations, the respondent is at liberty to proceed against the petitioners 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 petitioners.
This Writ Petition stands disposed of, with the above observations. No costs. W.M.P.(MD) No.16643 of 2026 is allowed. Consequently, connected Writ Miscellaneous Petitions are closed. Index : Yes / No 05.08.2026 Internet : Yes / No apd 5/6 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
apd To The State Tax Officer, Madurai Rural (West) Assessment Circle, Commercial Taxes Department, Madurai – 625020. 05.08.2026 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.