A Narayana Perumalsamy vs. The Commissioner / Additional Chief Secretary

Facts

The petitioner, A Narayana Perumalsamy, filed a writ petition challenging an order dated 25.02.2026 passed by the Deputy State Tax Officer-2 (3rd Respondent). This order levied GST, interest, and penalty on Seigniorage fee and DMFT paid for quarrying and transporting rough stone and gravel from a patta lease quarry for the tax period 2020-2021. The petitioner had not obtained GST registration and had not paid GST under the Reverse Charge Mechanism (RCM) on Seigniorage fee/Royalty, nor had they made contributions to the District Mineral Foundation Trust (DMFT). The impugned order was issued under Section 63 of the GST Enactments read with Rule 100(2) of the GST Rules.

Held

The Court held that the present case is almost identical to the facts of the case in S. Pichandhi, Proprietor of Sri Murugan Ready Mix Concrete and Blue Metal Industries, Vellore Vs. The Deputy State Tax Officer, Vellore Rural Assessment Circle, Vellore, in W.P.Nos.35883 and 35889 of 2025 dated 25.09.2025. In that case, the Court had directed the respondent to keep all proceedings in abeyance and await the decision of the Hon'ble Supreme Court on the dispute relating to the levy of GST on Seigniorage fee/Royalty paid for quarrying mines and minerals. The Court found that the principle laid down in the S. Pichandhi case would hold good for the present writ petition. Accordingly, the Court disposed of the writ petition on the same terms as the cited case, which involved keeping proceedings in abeyance pending the Supreme Court's decision. The operative direction was to await the Supreme Court's orders and then proceed in accordance with law. The issue of whether the petitioner should deposit a portion of the disputed tax as security, as directed in the S. Pichandhi case, was not explicitly mentioned in the operative part of this judgment.

Key Issues

1. Whether the levy of GST on Seigniorage fee/Royalty paid for quarrying and transporting mines and minerals is legally sustainable, particularly when the issue is pending before the Hon'ble Supreme Court? (Question of law) Petitioner's Contention: The petitioner argued that the issue of levying GST on Seigniorage fee/Royalty paid for quarrying and transporting minerals is currently pending before the Hon'ble Supreme Court. Therefore, proceedings should be kept in abeyance until the Supreme Court's decision. The petitioner relied on a previous order of this Court in S. Pichandhi's case (W.P.Nos.35883 and 35889 of 2025 dated 25.09.2025) which adopted a similar approach. Revenue's Contention: The judgment does not record any specific arguments made by the respondents.