Tvl. P. Chinnathambi vs. The Deputy State Tax Officer - 2

Facts

The petitioner, Tvl.P.Chinnathambi, filed three writ petitions challenging assessment orders dated 03.11.2025 and 29.10.2025, issued by the Deputy State Tax Officer - 2, Manapparai Assessment Circle. These orders were passed under Section 74 of the Tamil Nadu Goods and Services Act, 2017, for the tax periods 2020-21, 2021-22, and 2022-23. The core dispute revolves around the levy of GST on seigniorage fees, a matter currently pending before the Supreme Court of India. The petitioner argued that the authorities should await the Supreme Court's decision. The respondent contended that proceedings were directed to be completed, but appellate orders were to be kept in abeyance pending the Supreme Court's judgment. The High Court noted that the petitioner had not availed the opportunity to respond to the show cause notices or submit supporting documents.

Held

The Court allowed the writ petitions on the terms specified. The impugned assessment orders dated 03.11.2025, 29.10.2025, and 29.10.2025 were set aside and the matters were remanded back to the respondent for fresh consideration. The Court directed the petitioner to file a reply along with supporting documents within two weeks of receiving the order's web copy, for the respondent to consider afresh. Crucially, the Court ordered that final orders shall be kept in abeyance until the Supreme Court of India passes its judgment on the issue of GST levy on seigniorage fees. If the final order results in tax or penalty, it should be communicated to the petitioner, but enforcement and demand would be stayed until the Supreme Court's judgment. The petitioner would be entitled to take further steps based on the Supreme Court's outcome. The Court noted that the petitioner had not availed the opportunity to respond to the show cause notice and submit documents, but granted an opportunity due to the uncertainty surrounding the incidence of tax itself, without imposing an additional condition of deposit.

Key Issues

1. Whether the assessment orders passed by the respondent under Section 74 of the Tamil Nadu Goods and Services Act, 2017, are liable to be quashed, considering the pendency of the issue of GST levy on seigniorage fees before the Supreme Court of India? Petitioner's contentions: The petitioner argued that the subject matter of the dispute, the levy of GST on seigniorage fees, is pending before the Supreme Court of India. Therefore, the authorities should await the outcome of the Supreme Court's decision before passing final orders, citing previous High Court orders in similar matters where final orders were directed to be kept in abeyance. The petitioner also highlighted that the High Court had previously held that authorities should await the Supreme Court's orders. Respondent's contentions: The respondent submitted that the High Court had been directing the completion of proceedings. However, they acknowledged that orders of the Appellate Authority were directed to be kept in abeyance until the Supreme Court passed its orders. The respondent also pointed out that the petitioner had not availed the opportunity to respond to the show cause notice and submit supporting documents.