Tvl. Manickavasagam S vs. The Proper Officer / Commercial Tax Officer

Facts

The petitioner, Tvl.Manickavasagam S., filed a writ petition challenging an assessment order dated 24.02.2026, passed by the Proper Officer/Commercial Tax Officer, Sivagangai, under Section 74 of the Tamil Nadu Goods and Services Act, 2017. The dispute concerns the levy of GST on seigniorage fees. The petitioner argued that this issue is pending before the Supreme Court of India and that the High Court had previously directed authorities to await the Supreme Court's decision. The respondent contended that while proceedings were directed to be completed, final orders were to be kept in abeyance pending the Supreme Court's judgment. The petitioner also claimed their reply was not considered before the impugned order was passed.

Held

The Court held that the impugned assessment order dated 24.02.2026 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 under dispute and pending before the Supreme Court. It found merit in the petitioner's submission that their reply was not considered. Therefore, the Court allowed the petitioner to file an additional reply with supporting documents within two weeks. The respondent was directed to consider the matter afresh. Crucially, the Court ordered that final orders shall be kept in abeyance until the Supreme Court pronounces its judgment. If the final order results in tax assessment or penalty, its enforcement and demand will also be kept in abeyance until the Supreme Court's decision. The petitioner will be entitled to take further steps based on the Supreme Court's outcome. No costs were imposed.

Key Issues

1. Whether the assessment order passed by the respondent is liable to be quashed as illegal, arbitrary, and against the principles of natural justice, particularly in light of the pending Supreme Court decision on the levy of GST on seigniorage fees and the alleged non-consideration of the petitioner's reply? Petitioner's Arguments: The petitioner contended that the subject matter of the dispute, the levy of GST on seigniorage fees, is pending before the Supreme Court of India. They relied on previous High Court orders directing authorities to await the Supreme Court's decision. Furthermore, the petitioner argued that their reply to the show cause notice was not considered by the respondent before passing the impugned assessment order, violating principles of natural justice. Revenue's Arguments: The respondent, represented by the learned Additional Government Pleader, submitted that while the High Court had directed the completion of proceedings, it also directed that final orders be kept in abeyance until the Supreme Court of India passed its orders. The respondent produced previous High Court orders in similar cases to support this.