Tvl. Saravana Blue Metals vs. The State Tax Officer

Facts

The petitioner, Tvl. Saravana Blue Metals, filed a writ petition challenging an order of assessment dated 13.04.2026, issued by the respondent, the State Tax Officer, under Section 73 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 had not availed the opportunity to respond to the show cause notice or submit supporting documents. The respondent issued the assessment order despite the pendency of the Supreme Court case.

Held

The Court held that the assessment order dated 13.04.2026 was to be set aside and the matter remanded back to the respondent for fresh consideration. The Court reasoned that while the petitioner had failed to participate in the assessment proceedings, the fundamental issue of taxability was still under consideration by the Supreme Court. Therefore, granting the petitioner an opportunity to present their case was appropriate. The Court directed the petitioner to file their reply and supporting documents within two weeks. Crucially, any final orders passed by the respondent were to be kept in abeyance until the Supreme Court pronounces its judgment. If the assessment resulted in tax or penalty, enforcement and demand would also be stayed until the Supreme Court's decision. The petitioner would be entitled to take further steps based on the Supreme Court's outcome.

Key Issues

1. Whether the assessment order passed by the respondent is illegal and arbitrary, violating principles of natural justice, given that the core issue of GST on seigniorage fees is pending before the Supreme Court of India? Petitioner's contention: 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 contention: The respondent argued that the High Court had been directing the completion of proceedings. However, they acknowledged that final orders were to be kept in abeyance until the Supreme Court's decision, citing previous High Court orders in similar cases.