M Sundaravel vs. The Assistant Commissioner Of Central GST And Central Excise

Facts

The petitioner, M. Sundaravel, filed a writ petition challenging a Show Cause Notice (SCN) dated August 27, 2026, issued by the Assistant Commissioner of Central GST and Central Excise, Tirunelveli Division. The SCN proposed to levy GST on seigniorage fee/royalty paid by the petitioner for quarrying and transporting minerals for the financial years 2020-21 and 2021-22. The petitioner sought to quash this SCN. The respondent accepted notice. The Court noted that in similar matters concerning GST on seigniorage fee, assessment orders were set aside upon payment of 10% of the demand, with directions not to implement the order pending a larger issue adjudication by the Supreme Court.

Held

The Court disposed of the writ petition by directing that any orders passed pursuant to the impugned Show Cause Notice shall not be implemented insofar as such order pertains to GST on seigniorage fee. This direction is to remain in effect pending the pronouncement of orders by the Supreme Court in S.L.P. (Civil) No.37326 of 2017. The Court did not decide the merits of the levy of GST on seigniorage fee but provided interim relief by staying the implementation of any demand related to this issue. The reasoning is based on the pendency of a larger issue before the Supreme Court and a practice adopted in similar cases where assessment orders were set aside on condition of remitting 10% of the demand, with implementation deferred.

Key Issues

1. Whether the impugned Show Cause Notice No. 27/AC/GST/2026-27, dated 27.08.2026, proposing to levy GST on seigniorage fee/royalty paid for quarrying and transporting minerals for FY 2020-21 and 2021-22, is liable to be quashed? Petitioner's contention: The petitioner argued that the SCN is liable to be quashed. While the specific grounds for this contention are not detailed in the judgment, it is implied that the petitioner disputes the levy of GST on seigniorage fee. Respondent's contention: The respondent, represented by counsel, accepted notice. The judgment does not record any specific arguments made by the respondent in defense of the SCN. However, the Court's order suggests a precedent where similar demands were conditionally set aside pending Supreme Court adjudication.