Tvl. P Balaji vs. The Assistant Commissioner (St)

Facts

The petitioner, Tvl. P. Balaji, filed a writ petition challenging an assessment order dated 28.01.2026, passed by the respondent, the Assistant Commissioner (ST), Theni II Assessment Circle. The dispute concerns the levy of GST on seigniorage fees. The petitioner contended that this issue is pending before the Hon'ble Supreme Court of India, and the High Court had previously directed authorities to await the Supreme Court's decision. The respondent argued that while proceedings were to be completed, final orders were to be kept in abeyance. The impugned order was passed despite this. The petitioner had not availed the opportunity to respond to the show cause notice or submit supporting documents.

Held

The Court held that the petitioner should be granted an opportunity to present their case, considering that the very incidence of tax is under dispute and pending before the Supreme Court. The Court set aside the impugned assessment order dated 28.01.2026 and remanded the matter back to the respondent for fresh consideration. The petitioner was directed to file their reply with supporting documents within two weeks. The respondent was to consider the matter afresh, but crucially, final orders were to be kept in abeyance until the Supreme Court pronounces its judgment on the issue of GST on seigniorage fees. If the final order were to result in tax assessment or penalty, its enforcement and demand would also be stayed pending the Supreme Court's decision. The petitioner would be entitled to take further steps based on 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 as illegal, arbitrary, and against the principles of natural justice, particularly in light of the pending Supreme Court proceedings on the levy of GST on seigniorage fees, as contemplated under Section 73 of the Tamil Nadu Goods and Services Act, 2017? Petitioner's Contentions: The petitioner argued that the subject matter of the dispute, the levy of GST on seigniorage fees, is sub-judice before the Hon'ble Supreme Court of India. They relied on previous orders of this Court directing authorities to await the Supreme Court's decision. The assessment order passed by the respondent is therefore premature and illegal. Respondent's Contentions: The respondent submitted that while the High Court had directed proceedings to be completed, final orders were to be kept in abeyance until the Supreme Court's decision. They produced orders from this Court in similar matters (M/s.Marginal M sand vs. the State Tax Officer and Tvl.Rajapalayam Cement and Chemicals Limited vs. the Assistant Commissioner) which allowed completion of proceedings but prohibited passing of final orders pending the Supreme Court's judgment. The respondent also noted that the petitioner failed to participate in the assessment proceedings.