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

Facts

The petitioner, Tvl.P.Balaji, filed a writ petition challenging an order of assessment dated 11.03.2026, passed by the respondent, The Assistant Commissioner (ST), Theni II Assessment Circle, under Section 74 of the Tamil Nadu Goods and Services Act, 2017. The dispute concerns the levy of GST on seigniorage fees, a matter pending before the Supreme Court of India. The petitioner argued that the assessment order should not have been passed pending the Supreme Court's decision, citing previous High Court orders in similar cases. The respondent contended that while proceedings were to be completed, final orders were to be kept in abeyance. The Court noted that the petitioner failed to avail the opportunity to respond to the show cause notice and submit supporting documents.

Held

The Court held that the assessment order dated 11.03.2026 was to be set aside and the matter remanded back to the respondent for fresh consideration. The reasoning was based on the fact that the very incidence of tax was at large, pending the Supreme Court's decision. The Court granted the petitioner an opportunity to file a reply with supporting documents within two weeks. Crucially, the Court directed that final orders, if any, would be kept in abeyance until the Supreme Court pronounces its judgment. If the final order results in tax assessment or penalty, 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 additional condition of deposit was imposed due to the uncertainty surrounding the tax incidence.

Key Issues

1. Whether the assessment order passed by the respondent under Section 74 of the Tamil Nadu Goods and Services Act, 2017, is illegal and arbitrary, given that the levy of GST on seigniorage fees is pending adjudication before the Supreme Court of India? Petitioner's arguments: The petitioner contended that the assessment order was passed prematurely and in violation of the principles of natural justice, as the core issue of taxability of seigniorage fees is sub-judice before the Supreme Court. They relied on previous High Court orders directing authorities to await the Supreme Court's decision in similar matters. Respondent's arguments: The respondent argued that while the High Court had directed proceedings to be completed, the final orders were to be kept in abeyance until the Supreme Court's decision. They also pointed out the petitioner's failure to participate in the assessment proceedings and submit supporting documents.