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, issued by the Proper Officer/Commercial Tax Officer, Sivagangai. The assessment order was passed under Section 74 of the Tamil Nadu Goods and Services Act, 2017. The petitioner contended that the dispute pertains to the levy of GST on seigniorage fees, a matter pending before the Supreme Court of India. The petitioner argued that the authorities should await the Supreme Court's decision. The respondent submitted 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.

Held

The Court held that the impugned assessment order dated 24.02.2026 should be set aside and 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. Therefore, the petitioner was granted an opportunity 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 any final orders passed by the respondent should be kept in abeyance until the Supreme Court of India pronounces its judgment on the issue of GST on seigniorage fees. If an order results in tax or penalty, its 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. No costs were imposed.

Key Issues

1. Whether the assessment order passed by the respondent is illegal and arbitrary, violating principles of natural justice, particularly in light of the pending Supreme Court proceedings on the levy of GST on seigniorage fees? (Section 74, Tamil Nadu Goods and Services Act, 2017). Petitioner's arguments: The petitioner argued that the assessment order should be quashed as it pertains to a subject matter (GST on seigniorage fees) that is sub-judice before the Supreme Court of India. They relied on previous High Court orders directing authorities to await the Supreme Court's decision. Additionally, the petitioner contended that their reply to the show cause notice was not considered by the respondent, violating principles of natural justice. Revenue's arguments: The respondent, represented by the learned Additional Government Pleader, acknowledged that while proceedings were directed to be completed, final orders were to be kept in abeyance until the Supreme Court of India passed its judgment. They referred to prior High Court orders in similar matters.