Tvl S Vairavan vs. The State Tax Officer

Facts

The petitioner, Tvl S Vairavan, filed a writ petition challenging an order in Form GST DRC 07 dated 29.01.2026, issued by the respondent, The State Tax Officer. This order was passed under Section 73 of the Tamil Nadu Goods and Services Act, 2017, and concerned the levy of GST on seigniorage fees. The petitioner argued that the issue of seigniorage fees was pending before the Supreme Court of India, and the authorities should await its decision. The respondent acknowledged that while proceedings could be completed, final orders should be kept in abeyance pending the Supreme Court's judgment. The Court noted that the petitioner had not availed the opportunity to respond to the show cause notice or submit supporting documents.

Held

The Court allowed the writ petition and set aside the impugned order dated 29.01.2026. The matter was remanded back to the respondent for fresh consideration. The Court reasoned that the very incidence of tax was at large, pending the Supreme Court's decision on the levy of GST on seigniorage fees. The petitioner was directed to file a reply with supporting documents within two weeks. The respondent was 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 assessment or penalty, enforcement and demand would also be kept in abeyance until the Supreme Court's judgment. The petitioner would be entitled to take further steps subject to the outcome of the Supreme Court's decision. No costs were imposed. The Court noted that it was granting an opportunity to the petitioner due to the uncertainty surrounding the tax incidence, and no deposit condition was imposed, unlike in normal equitable considerations.

Key Issues

1. Whether the assessment order passed by the respondent under Section 73 of the Tamil Nadu Goods and Services Act, 2017, is liable to be quashed due to the pendency of the issue of levy of GST on seigniorage fees before the Supreme Court of India? Petitioner's contention: The petitioner argued that the levy of GST on seigniorage fees is a subject matter currently pending before the Hon'ble Supreme Court of India. Therefore, the respondent authorities should await the outcome of the Supreme Court's decision before passing any final orders. The petitioner relied on previous orders of this Court in similar matters where it was directed that authorities should await the Supreme Court's judgment. Respondent's contention: The learned Additional Government Pleader submitted that while this Court has been directing the completion of proceedings, it has also directed that the orders of the Appellate Authority be kept in abeyance until the Hon'ble Supreme Court of India passes its orders. The respondent referred to orders in M/s.Marginal M sand vs. the State Tax Officer and Tvl.Rajapalayam Cement and Chemicals Limited vs. the Assistant Commissioner, which permitted the completion of proceedings but stipulated that final orders should await the Supreme Court's decision.