Facts of the Case

The petitioner, C. Maheswari, engaged in quarrying and transporting minerals, challenged a notice dated 29.10.2025 issued by the State Tax Officer, Sengottai, levying GST of Rs.5,28,646/- on Seigniorage Fee/Royalty and DMFT paid by the petitioner for quarrying and transporting minerals for the tax period 2021-2022. The petitioner's counsel submitted that the question of whether GST is leviable on Seigniorage Fee/Royalty paid for mineral extraction is currently pending consideration before the Hon'ble Supreme Court.

Issues Involved

  1. Whether GST proceedings on the levy of tax on Seigniorage Fee/Royalty for mineral quarrying and transport should be kept in abeyance pending the Supreme Court's decision on the same issue.

Petitioner's Arguments

  • The very issue of levy of GST on Seigniorage Fee/Royalty paid for quarrying and transporting minerals is pending before the Hon'ble Supreme Court, and the proceedings against the petitioner should await that outcome.

Respondent's Arguments

  • No specific contesting submission is recorded from the Additional Government Pleader on the substance; the matter was disposed of at the admission stage itself.

Court Order / Findings

  • Considering that the issue of GST leviability on Seigniorage Fee/Royalty is pending before the Supreme Court, the Court disposed of the writ petition at the admission stage itself, directing the respondent to keep all proceedings in abeyance.
  • The respondent was directed to await the Supreme Court's decision and thereafter proceed in accordance with law.
  • The petitioner was directed to deposit 10% of the disputed tax as security in the interim.

Important Clarification

  • Where the core legal question of GST leviability on Seigniorage Fee/Royalty for mineral extraction/transport is sub judice before the Supreme Court, High Courts routinely keep the specific proceedings against an individual taxpayer in abeyance pending that outcome, while safeguarding revenue interests through an interim security deposit (commonly 10% of the disputed tax) rather than deciding the issue themselves.

Sections Involved

  • GST on Royalty/Seigniorage Fee for mineral rights – levy under the CGST/SGST Act, the core issue pending before the Supreme Court.
  • District Mineral Foundation Trust (DMFT) contribution – ancillary levy referenced alongside royalty in the impugned notice.

Decision – In Favour of

Disposed of at the admission stage with directions, without a decision on merits; proceedings kept in abeyance pending the Supreme Court's ruling, subject to the petitioner depositing 10% security.

Case Details

Madurai Bench of Madras High Court; W.P.(MD)No.34685 of 2025 with W.M.P.(MD)Nos.27411 & 27414 of 2025; Coram: Hon'ble Mr. Justice G.R. Swaminathan; Order dated 28.11.2025.

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