Rr Construction vs. The Deputy State Tax Officer - 2

Facts

The petitioner, R.R. Construction, represented by its partner R. Saravanan, filed a writ petition challenging a notice dated 09.10.2025 issued by the Deputy State Tax Officer-2, Madurai. The notice sought to levy Goods and Services Tax (GST) on seigniorage fee/royalty and DMFT paid for quarrying and transporting minerals for the tax period 2021-2022. The petitioner contended that this issue is currently pending before the Hon'ble Supreme Court. The High Court heard both sides at the admission stage.

Held

The Court acknowledged that the issue of levying GST on seigniorage fee/royalty paid for quarrying and transporting minerals is pending before the Hon'ble Supreme Court. Consequently, the Court decided to dispose of the writ petition at the admission stage by directing the respondent to keep all further proceedings in abeyance. The respondent is instructed to await the final orders from the Hon'ble Supreme Court and then proceed in accordance with law. As a condition, the petitioner is required to deposit 10% of the disputed tax as security, following earlier directions in the petitioner's own case. The Court explicitly did not decide the merits of the GST levy itself, deferring to the Supreme Court's ultimate decision. The operative direction is to stay proceedings and await the Supreme Court's ruling.

Key Issues

1. Whether the impugned notice dated 09.10.2025, levying GST on seigniorage fee/royalty and DMFT paid for quarrying and transporting minerals for the tax period 2021-2022, is liable to be quashed, considering the pendency of a similar issue before the Hon'ble Supreme Court? Petitioner's contention: The petitioner argued that the issue of levying GST on seigniorage fee/royalty paid for quarrying and transporting minerals is presently under consideration by the Hon'ble Supreme Court. Therefore, proceedings should be stayed pending the Supreme Court's decision. Respondent's contention: The judgment records no specific argument from the respondent. However, the court's direction to keep proceedings in abeyance and await the Supreme Court's order implies the respondent did not press for immediate action against the petitioner.