Tvl Saravana Blue Metals vs. The State Tax Officer

Facts

The petitioner, Tvl. Saravana Blue Metals, represented by its proprietor, filed a writ petition challenging an order of assessment in Form GST DRC 07 dated 10.04.2026, issued by the respondent, the State Tax Officer, Theni-2 Assessment Circle. The dispute concerns the levy of GST on seigniorage fees. The petitioner argued that this issue is pending before the Hon'ble Supreme Court of India and that the authorities should await its decision. The respondent contended that the Court has been directing proceedings to be completed, but appellate orders were to be kept in abeyance pending the Supreme Court's decision. The petitioner had not availed the opportunity when the show cause notice was issued and failed to submit supporting documents.

Held

The Court held that the impugned order of assessment dated 10.04.2026 should be set aside and the matter remanded back to the respondent for fresh consideration. The Court acknowledged that the very incidence of tax was at large, pending the Supreme Court's decision. Therefore, the petitioner was granted an opportunity to file a reply along with supporting documents within two weeks. The respondent was directed to consider the matter afresh, but crucially, final orders were to be kept in abeyance until the Hon'ble Supreme Court of India pronounces its judgment. If the order resulted in the assessment of tax or imposition of penalty, enforcement and further demand were also to be kept in abeyance. The petitioner would be entitled to take further steps subject to the outcome of the Supreme Court's judgment. No costs were imposed. The Court did not impose the usual condition of deposit of 25% due to the pendency of the issue before the Supreme Court.

Key Issues

1. Whether the assessment order passed by the respondent is illegal and arbitrary, violating principles of natural justice, given that the levy of GST on seigniorage fees is pending before the Hon'ble Supreme Court of India (turning on Section 73 of the Tamil Nadu Goods and Services Act, 2017)? Petitioner's contentions: The subject matter of the dispute, the levy of GST on seigniorage fees, is pending before the Hon'ble Supreme Court of India. This Court has previously held that authorities should await the Supreme Court's orders. Therefore, the impugned assessment order, passed during this pendency, is illegal. Respondent's contentions: The respondent argued that while appellate orders were directed to be kept in abeyance, the proceedings themselves were to be completed. The respondent relied on previous orders of this Court in M/s.Marginal M sand vs. the State Tax Officer and Tvl.Rajapalayam Cement and Chemicals Limited vs. the Assistant Commissioner, which permitted proceedings to be completed but directed final orders to be kept in abeyance until the Supreme Court's decision. The respondent also noted that the petitioner failed to participate in the proceedings and submit supporting documents.