Tvl. A.Duraisamy vs. The Deputy State Tax Officer- 2

Facts

The petitioner, Tvl. A. Duraisamy, represented by their legal heir, challenged an assessment order dated 29.10.2025, issued by the Deputy State Tax Officer. This order was passed under Section 74 of the Tamil Nadu Goods and Services Act, 2017, concerning the levy of GST on seigniorage fees. The petitioner argued that the issue of GST on seigniorage fees is pending before the Supreme Court of India, and the High Court had previously directed authorities to await the Supreme Court's decision. The respondent acknowledged that proceedings were directed to be completed but noted that appellate orders were to be kept in abeyance pending the Supreme Court's judgment. The impugned order had already been passed, and the petitioner had not availed the opportunity to respond to the show cause notice or submit supporting documents.

Held

The Court held that the impugned assessment order dated 29.10.2025 should be set aside and the matter remanded back to the respondent for fresh consideration. The Court acknowledged that the very incidence of tax was at large, pending the Supreme Court's decision. The petitioner was granted an opportunity to file a reply with supporting documents within two weeks. The respondent was directed to consider the matter afresh, but final orders were to be kept in abeyance until the Supreme Court pronounces its judgment. If the order resulted in tax or penalty, it was to be communicated to the petitioner, but enforcement and demand would be stayed pending the Supreme Court's outcome. The petitioner would be entitled to take further steps subject to the Supreme Court's judgment. No costs were imposed.

Key Issues

1. Whether the assessment order passed by the respondent is liable to be quashed in light of the pending Supreme Court of India proceedings on the levy of GST on seigniorage fees, and in light of previous High Court directions to await the Supreme Court's decision? (Question of law turning on principles of judicial discipline and pending litigation). Petitioner's argument: The petitioner contended that the subject matter of the dispute, the levy of GST on seigniorage fees, is pending before the Supreme Court of India. They relied on previous High Court orders directing authorities to await the Supreme Court's decision. Revenue's argument: The respondent argued that while High Court orders directed proceedings to be completed, final orders were to be kept in abeyance until the Supreme Court's decision. They also noted that the petitioner had not availed opportunities to respond to the show cause notice.