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 respondent, The State Tax Officer, under Section 74 of the Tamil Nadu Goods and Services Act. The dispute concerns whether seigniorage fees paid by the petitioner, amounting to Rs. 22,33,970/-, are exigible 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 (SLP (Civil) No.37326 of 2017), where an interim order has been granted. The High Court was asked to decide on the taxability of seigniorage fees.

Held

The Court noted that the core issue of whether seigniorage fees are subject to GST at 18% is currently under consideration by 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 passed. Consequently, the High Court held that the impugned order of assessment and any consequent demand should be kept in abeyance until the Supreme Court delivers its verdict. The Court further directed that if the Supreme Court's decision favors the revenue, the petitioner would have the liberty to challenge the impugned order, including by 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 proceedings related to the impugned order shall be dropped. The Court disposed of the writ petition accordingly, with no costs.

Key Issues

1. Whether seigniorage fees paid by the petitioner, amounting to Rs. 22,33,970/-, are liable to be taxed under the Goods and Services Tax at the rate of 18%, as per Section 74 of the Tamil Nadu Goods and Services Act? Petitioner's Contention: The petitioner's counsel argued that the taxability of seigniorage fees is a matter pending before the Supreme Court of India in 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. Respondent's Contention: The respondent's counsel also submitted that the issue is sub-judice before the Supreme Court of India in the aforementioned case, and an interim order has been granted. The respondent did not present any independent arguments against the petitioner's plea for deferral.