Tvl. Sri Jayamurugan Transport vs. The State Tax Officer (Fac)

Facts

The petitioner, Tvl.Sri Jayamurugan Transport, filed a writ petition challenging an order of assessment dated 11.02.2026 passed by the respondent, the State Tax Officer (FAC), 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 while the Supreme Court's decision is awaited, citing previous High Court orders. The respondent contended that proceedings were directed to be completed, but final orders were to be kept in abeyance. The Court noted that the petitioner had not availed the opportunity to submit supporting documents when the show cause notice was issued.

Held

The Court held that while the assessment order had been passed, the petitioner had not availed the opportunity to submit supporting documents. Considering that the very incidence of tax was under dispute and pending before the Supreme Court, the Court granted an opportunity to the petitioner. The impugned order dated 11.02.2026 was set aside and the matter was remanded back to the respondent for fresh consideration. 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's decision. If the final order resulted in tax or penalty, its enforcement was to be stayed until the Supreme Court's judgment. The petitioner would be entitled to take further steps based on the Supreme Court's outcome. No costs were imposed.

Key Issues

1. Whether the assessment order passed by the respondent is illegal and arbitrary, violating principles of natural justice, in light of the pending Supreme Court decision on the levy of GST on seigniorage fees, as per Section 74 of the Tamil Nadu Goods and Services Act, 2017? Petitioner's Contentions: The petitioner argued that the assessment order should not have been passed while the issue of GST on 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. Respondent's Contentions: The respondent submitted that while High Court orders directed proceedings to be completed, final orders were to be kept in abeyance pending the Supreme Court's decision. They also noted the petitioner's failure to submit supporting documents.