A.Duraisamy vs. The Deputy State Tax Officer-2

Facts

The petitioner, represented by the legal heir of the deceased A.Duraisamy, filed a writ petition challenging an order dated 19.02.2026 passed by the Deputy State Tax Officer-2, Manapparai Assessment Circle. The impugned order was an assessment order under Section 74 of the Tamil Nadu Goods and Services Act, 2017. The petitioner contended that the subject matter of dispute, the levy of GST on seigniorage fees, is pending before the Supreme Court of India, and this Court had previously directed authorities to await the Supreme Court's decision. The respondent argued that while proceedings were directed to be completed, final orders were to be kept in abeyance pending the Supreme Court's judgment. The Court noted that the petitioner failed to avail the opportunity during the show cause notice stage and did not submit supporting documents.

Held

The Court held that the petitioner should be granted an opportunity to present their case, despite their failure to do so earlier. The Court acknowledged that the very incidence of tax was under challenge before the Supreme Court. Consequently, the impugned order dated 19.02.2026 was set aside and the matter was remanded back to the respondent for fresh consideration. The petitioner was directed to file their reply with supporting documents within two weeks. The respondent was instructed to consider the matter afresh, but crucially, final orders were to be kept in abeyance until the Supreme Court of India pronounces its judgment. If the final order was in favour of the petitioner, no further action would be needed. If it resulted in tax or penalty, enforcement and demand would 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 authority is liable to be quashed in light of the pending Supreme Court of India proceedings on the levy of GST on seigniorage fees, and if so, what is the appropriate relief? (Question of law and mixed fact and law, turning on Section 74 of the Tamil Nadu Goods and Services Act, 2017 and principles of judicial discipline). Petitioner's Arguments: The petitioner argued that the entire issue of GST on seigniorage fees is sub-judice before the Supreme Court of India. They relied on previous orders of this Court directing authorities to await the Supreme Court's decision. Therefore, the assessment order passed by the respondent should be set aside. Respondent's Arguments: The respondent contended that while the Court had directed proceedings to be completed, final orders were to be kept in abeyance pending the Supreme Court's judgment. They also pointed out the petitioner's failure to participate in the assessment proceedings and submit supporting documents.