Tvl. Manickavasagam S. Vs Proper Officer/Commercial Tax Officer (Madras High Court)
Madras HC sets aside assessment order on seigniorage fees and stays enforcement pending the Supreme Court verdict
The Madras High Court (Madurai Bench) set aside an assessment order passed under Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017 concerning the levy of GST on seigniorage fees and remanded the matter for fresh consideration. The Court found that although the petitioner had filed a reply to the show cause notice, the assessing authority failed to consider it, resulting in a violation of the principles of natural justice. The Court noted that the issue of GST on seigniorage fees is pending before the Supreme Court and referred to its earlier orders directing authorities to await the Apex Court’s decision. Considering that the very incidence of tax is under consideration before the Supreme Court, the Court dispensed with the usual requirement of a 25% pre-deposit, directed the petitioner to file an additional reply within two weeks, and ordered that any fresh assessment, enforcement, or recovery shall remain in abeyance until the Supreme Court pronounces its judgment.
Facts:
Tvl. Manickavasagam S. (“the Petitioner”) was issued an assessment order in GST ASMT 15 Temporary ID: 332500004524 TMP/2020-2021, dated February 24, 2026 (“the Impugned Order”) by the Proper Officer/Commercial Tax Officer, Sivagangai (“the Respondent”) under Section 74 of the TNGST Act, 2017.
