Madras HC Stays GST Proceedings on Mining Royalty Pending SC Decision

S.Pichandhi Vs Deputy State Tax Officer (Madras High Court)

The Madras High Court disposed of writ petitions challenging FORM GST DRC-01A notices issued for the tax periods 2020–21 and 2021–22 concerning the levy of GST on seigniorage fee and royalty paid for quarrying and transporting minerals. The petitioner argued that the issue regarding GST applicability on royalty and seigniorage charges is already pending adjudication before the Supreme Court. Considering the pendency of the matter before the apex court, the High Court directed the tax authorities to keep all further proceedings in abeyance until the Supreme Court delivers its decision. However, the Court imposed a condition requiring the petitioner to deposit 10% of the disputed tax amount as security, consistent with directions issued in the petitioner’s earlier case. The Court clarified that after the Supreme Court’s ruling, the respondent authority may proceed in accordance with law. Accordingly, the writ petitions were disposed of without costs, and connected miscellaneous petitions were also closed.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

Ms.Amirtha Poonkodi Dinakaran, learned Government Advocate takes notice for the Respondent.

2. These Writ Petitions are being disposed of at the time of admission after hearing the learned counsel for the Petitioner and learned Government Advocate for the Respondent.

3. In these Writ Petitions, the Petitioner has challenged the impugned Notices in FORM GST DRC – 01A dated 16.06.2025 for the Tax Period 2021 -2022 and 2020 – 2021 respectively.

4. The learned counsel for the Petitioner submits that the issue is now pending before the Hon’ble Supreme Court, as the dispute pertains to levy of GST on the Seigniorage fee/Royalty paid for quarrying and transporting mineral.

5. Considering the fact that the issue is pending before the Hon’ble Supreme Court, I am inclined to dispose of these Writ Petitions at the admission stage, by directing the Respondent to keep all the proceedings in abeyance.

6. The Respondent shall await the orders to be passed by the Hon’ble Supreme Court and thereafter proceed in accordance with law. The Petitioner shall however deposit 10% of the disputed tax as security, in line with the directions issued in the Petitioner’s own case earlier.

7. These Writ Petitions stand disposed of with the above observations. No costs. Connected Miscellaneous Petitions are closed.