Tvl.Muthaiyah Blue Metals vs. The State Tax Officer

Facts

The petitioner, Tvl. Muthaiyah Blue Metals, filed six writ petitions challenging assessment orders passed by the State Tax Officer, Manapparai Assessment Circle. The impugned orders, dated January 19, 2026, December 26, 2025, and January 19, 2026, pertained to tax periods 2020-21, 2021-22, and 2022-23 respectively. The core dispute involved the levy of GST on seigniorage fees. The petitioner contended that this issue was pending before the 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 petitioner admitted to not availing the opportunity to respond to the show cause notice and submit supporting documents.

Held

The Court held that the impugned assessment orders should be set aside and the matters remanded back to the respondent for fresh consideration. The Court acknowledged that the very incidence of tax was under dispute before the Supreme Court. Therefore, while allowing the petitioner an opportunity to file their reply and supporting documents within two weeks, the Court directed that final orders on the assessment should be kept in abeyance until the Supreme Court pronounces its judgment. If the final order results in tax 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 outcome. No condition of deposit was imposed due to the fundamental nature of the tax dispute. The Court relied on its previous orders in similar matters where it directed authorities to await the Supreme Court's decision.

Key Issues

1. Whether the assessment orders passed by the respondent are illegal and arbitrary, violating the principles of natural justice, particularly in light of the pending Supreme Court decision on the levy of GST on seigniorage fees? (Question of law and fact, turning on principles of natural justice and administrative law). Petitioner's arguments: The petitioner argued that the assessment orders should be quashed as they were passed despite the issue of GST on seigniorage fees being sub-judice before the Supreme Court. They relied on previous High Court orders directing authorities to await the Supreme Court's verdict. The petitioner also claimed the orders were passed without proper adherence to natural justice principles. Revenue's arguments: The respondent, through the Government Standing Counsel, submitted that while the High Court had directed proceedings to be completed, final orders were to be kept in abeyance pending the Supreme Court's decision. They produced prior High Court orders supporting this stance, specifically referencing cases like M/s. Marginal M sand and Tvl. Rajapalayam Cement and Chemicals Limited.