Tvl. Ultra Sand vs. The State Tax Officer

Facts

The petitioner, Tvl.Ultra Sand, represented by its proprietor, filed a writ petition challenging an order of assessment dated 18.03.2026 passed by the respondent, the State Tax Officer, 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 contended that the assessment order should not have been passed pending the Supreme Court's decision, as per previous High Court directives. The respondent argued that proceedings were directed to be completed, with final orders to be kept in abeyance. The Court noted that 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 order of assessment dated 18.03.2026 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. While the petitioner had failed to submit a reply and supporting documents to the show cause notice, the Court granted an opportunity for fresh consideration on equitable grounds. The final orders, if any, were to be kept in abeyance until the Supreme Court pronounces its judgment. The petitioner was directed to file their reply and supporting documents within two weeks. If the final order resulted in tax or penalty, enforcement and demand would 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 respondent-authority ought to have passed a final order of assessment dated 18.03.2026 when the issue of levy of GST on seigniorage fees is pending adjudication before the Hon'ble Supreme Court of India, and in light of previous High Court orders directing authorities to await the Supreme Court's decision. Petitioner's contention: The petitioner argued that the assessment order was passed prematurely and in contravention of prior High Court pronouncements that mandated awaiting the Supreme Court's judgment on the seigniorage fees issue. They relied on the principle that matters pending before a higher forum should not be finalized by subordinate authorities. Respondent's contention: The respondent, through the Government Standing Counsel, submitted that while the Court had directed proceedings to be completed, the final orders were to be kept in abeyance until the Supreme Court's decision. They indicated that the Court had been directing the completion of proceedings.