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

Facts

The petitioner, Tvl.P.Balaji, filed a writ petition challenging an order of assessment dated 28.01.2026, 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 pertains to the levy of GST on seigniorage fees, a matter pending before the Supreme Court of India. The petitioner contended that the authorities should await the Supreme Court's decision. The respondent argued that proceedings should be completed, but acknowledged that final orders were to 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 held that the impugned order of assessment dated 28.01.2026 should be set aside and the matter remanded back to the respondent for fresh consideration. The Court reasoned that while the petitioner had failed to avail the opportunity to respond to the show cause notice, the very incidence of tax was at large, pending the Supreme Court's decision. Therefore, an opportunity should be granted to the petitioner. The Court directed the petitioner 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 pronounced its judgment. If the final order resulted in tax or penalty, enforcement and demand would also be kept in abeyance. 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 proceedings under Section 74 of the Tamil Nadu Goods and Services Act, 2017, should be quashed or stayed pending the decision of the Hon'ble Supreme Court of India on the levy of GST on seigniorage fees? Petitioner's arguments: The petitioner argued that the subject matter of the dispute, the levy of GST on seigniorage fees, is pending before the Supreme Court of India. Therefore, the assessment proceedings should be stayed, and the authorities should await the Supreme Court's orders, citing previous High Court orders in similar matters. Respondent's arguments: The respondent contended that the High Court had been directing the completion of proceedings. However, they conceded that the orders of the Appellate Authority were directed to be kept in abeyance until the Supreme Court passed its orders. They relied on previous orders of the High Court in M/s.Marginal M sand vs. the State Tax Officer and Tvl.Rajapalayam Cement and Chemicals Limited vs. the Assistant Commissioner.