M/S. Concretia Rock Products Private Limited vs. State Tax Officer

Held

The Court disposed of both writ petitions by following the directions issued by a Division Bench of the same High Court in Tvl. A. Venkatachalam's case. The Court directed the petitioner to file a reply/objection to the impugned notice within four weeks from the date of receipt of a copy of the order. The respondent authority was directed to adjudicate the case on merits thereafter. However, the implementation of any order of adjudication was to be kept in abeyance pending further orders from the Hon'ble Supreme Court, as ordered by the Division Bench. The Court made it clear that all contentions were left open for the petitioner to raise in appropriate proceedings after the outcome of the decision of the Supreme Court. The ratio decidendi is that while tax authorities can proceed with adjudication, the final orders imposing GST on royalty should be kept in abeyance until the Supreme Court decides the seminal issue.

Facts

The petitioner, M/s. Concretia Rock Products Private Limited, filed two writ petitions challenging notices dated 12.08.2022 issued by the State Tax Officer, Madurai Rural (West) under Section 63 of the TNGST Act, 2017. The notices sought to demand GST on royalty payable by the petitioner for mining minerals. W.P.(MD) No. 22318 of 2022 concerned the assessment period 2017 to 2022, while W.P.(MD) No. 22319 of 2022 covered the period 2014 to 2019. The petitioner argued that the issue was sub judice before the Supreme Court in Writ Petition (Civil) No. 1076 of 2021 and sought deferment of the proceedings pending the Supreme Court's decision. The respondent relied on a Division Bench order of the Madras High Court in Tvl. A. Venkatachalam vs. The Assistant Commissioner (ST).

Key Issues

1. Whether the proceedings initiated by the respondent under Section 63 of the TNGST Act, 2017, for demanding GST on seigniorage charges are liable to be quashed as illegal and not in accordance with law, pending a decision from the Supreme Court? Petitioner's arguments: The petitioner contended that the issue of GST on royalty/seigniorage charges is currently sub judice before the Hon'ble Supreme Court in Writ Petition (Civil) No. 1076 of 2021, and orders are awaited. Therefore, the present cases should be deferred, and interim relief should be granted. The petitioner relied on the pendency of the Supreme Court case. Respondent's arguments: The respondent relied on the Division Bench judgment of the Madras High Court in Tvl. A. Venkatachalam vs. The Assistant Commissioner (ST), which directed petitioners to submit objections and allowed authorities to adjudicate on merits but keep orders in abeyance until a Nine Judge Constitution Bench decides the issue of royalty. The respondent also argued that the writ petitions were premature as the petitioner had not yet replied to the impugned notice.