S.Balasubramani vs. The State Tax Officer

Facts

The petitioner, S. Balasubramani, filed a writ petition challenging an order dated 23.02.2026, passed by the State Tax Officer, Mudhukulathur Assessment Circle, under Section 74 of the Tamil Nadu Goods and Services Act. The impugned order confirmed a demand for the Assessment Year 2022-2023. The core of the dispute concerns whether the seigniorage fee paid by the petitioner, amounting to Rs. 5,20,300/-, is subject to GST at the rate of 18%. Both parties acknowledged that this issue 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.

Held

The Court noted that the issue of whether seigniorage fee is subject to GST at 18% is pending before the Supreme Court of India in Udaipur Chambers of Commerce and Industry and others Vs. Union of India and others. Consequently, the Court ordered that the impugned assessment order 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 filing a statutory appeal, from the date of receiving 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. 5,20,300/-, 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 implicitly challenges the demand by seeking to quash the impugned order, indicating disagreement with the taxability of the seigniorage fee. Respondent's Contention: The respondent, through the impugned order, has sought to levy GST on the seigniorage fee, asserting its taxability. Both sides acknowledged that the Supreme Court of India is seized of a similar matter, Udaipur Chambers of Commerce and Industry and others Vs. Union of India and others (SLP (Civil) No.37326 of 2017), and an interim order has been granted.