Tvl Siva Blue Metals vs. The Proper Officer

Facts

The petitioner, Tvl. Siva Blue Metals, filed a writ petition challenging an order of assessment dated 23.12.2025, passed by the Proper Officer, Vedasandur Assessment Circle, under Section 73 of the Tamil Nadu Goods and Services Act, 2017, for the assessment year 2021-2022. The dispute concerns the levy of GST on seigniorage fees, a matter pending before the Supreme Court of India. The petitioner contended that the assessment order should not have been passed pending the Supreme Court's decision, as per previous High Court directions. The respondent argued that proceedings were directed to be completed, but final orders were to be kept in abeyance. 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 assessment order dated 23.12.2025 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. While the petitioner had failed to avail the opportunity to respond to the show cause notice, the Court granted them an opportunity to file their reply with supporting documents within two weeks. Crucially, the Court directed that any final orders passed by the respondent must be kept in abeyance until the Supreme Court pronounces its judgment on the issue of GST on seigniorage fees. If the final order results in tax or penalty, enforcement and demand shall also be kept in abeyance. The petitioner would be entitled to take further steps based on the Supreme Court's outcome. The Court did not impose the usual 25% deposit condition due to the uncertain nature of the tax incidence.

Key Issues

1. Whether the assessment order passed by the respondent under Section 73 of the Tamil Nadu Goods and Services Act, 2017, is liable to be quashed on the grounds that it was passed during the pendency of a matter before the Supreme Court of India concerning the levy of GST on seigniorage fees, and in contravention of previous High Court directions to await the Supreme Court's decision. Petitioner's arguments: The petitioner argued that the assessment order was premature and ought to be quashed as the core issue of taxing seigniorage fees is sub-judice before the Supreme Court. They relied on prior High Court orders in similar cases (M/s.Marginal M sand and Tvl.Rajapalayam Cement and Chemicals Limited) which directed authorities to complete proceedings but keep final orders in abeyance pending the Supreme Court's judgment. Revenue's arguments: The respondent, through the Government Standing Counsel, contended that while the High Court had directed proceedings to be completed, the final orders were to be kept in abeyance. They also noted that the petitioner failed to avail the opportunity to respond to the show cause notice and submit supporting documents.