S Balasuramai vs. The State Tax Officer

Facts

The petitioner, S. Balasubramani, filed a writ petition before the Madurai Bench of the Madras High Court challenging an order dated 31.12.2025, passed by the State Tax Officer, Mudhukulathur Assessment Circle. The impugned order was passed under Section 74 of the Tamil Nadu Goods and Services Act and pertained to the taxability of seigniorage fee paid by the petitioner, amounting to Rs. 22,19,420/-, at the rate of 18%. The assessment year in question was 2021-2022. The procedural history is limited to the filing of the writ petition and the subsequent order by the High Court.

Held

The Court noted that the issue regarding the taxability of seigniorage fee was pending before the Supreme Court of India in the case of Udaipur Chambers of Commerce and Industry and others Vs. Union of India and others (SLP (Civil) No.37326 of 2017), and an interim order had been granted by the Supreme Court. Consequently, the High Court directed that the impugned order of assessment and any consequent demand shall be kept in abeyance pending the decision of the Supreme Court. If the Supreme Court's verdict favors the revenue, the petitioner will have the liberty to challenge the impugned order, including by filing a statutory appeal, from the date of receipt of the Supreme Court's judgment. Conversely, if the Supreme Court's judgment is in favor of the assessee, all further proceedings pursuant to the impugned order shall stand dropped. The writ petition was disposed of in terms of this direction.

Key Issues

1. Whether the seigniorage fee paid by the petitioner, amounting to Rs. 22,19,420/-, is exigible to GST at the rate of 18% under Section 74 of the Tamil Nadu Goods and Services Act. Petitioner's contention: The petitioner's counsel submitted that the issue of whether seigniorage fee is subject to GST is pending before the Supreme Court of India in the case of Udaipur Chambers of Commerce and Industry and others Vs. Union of India and others (SLP (Civil) No.37326 of 2017), where an interim order has been granted. Revenue's contention: The respondent's counsel acknowledged that the issue is pending before the Supreme Court of India in the aforementioned case.