M/s. Skt Mines Vs The Assistant Commissioner (St) — GST and Indirect Tax | Madras HC (2026)

M/s. Skt Mines Vs The Assistant Commissioner (St) — GST and Indirect Tax | Madras HC (2026)

What the court decided

AI extract

Outcome

Certiorari not granted outright; writ petition disposed of at admission with conditional remand: Defect No.2 (RCM on seigniorage fee) and Defect Nos.3 & 4 remitted to the Respondent for fresh orders on merits, conditional on the Petitioner depositing 10% of the disputed tax within 30 days and, for Defect No.4, the entire penalty as assessed; Petitioner to file documents substantiating its 09.09.2025 DRC-06 reply and to be heard before any fresh order; on default, Respondent may recover the tax as if the writ petition were dismissed in limine; connected W.M.Ps. closed; no costs.

Issue for consideration

Whether the impugned Order dated 31.10.2025 in Form GST DRC-07 passed under Section 74 for AY 2020-21, confirming Defect Nos.2 to 4 of the Show Cause Notice dated 23.07.2025 (Defect No.1 having been dropped), should be quashed by a writ of certiorari under Article 226 of the Constitution of India. +2 more

Court's answer

With the consent of counsel on both sides, the Writ Petition was disposed of at the time of admission rather than by full adjudication.

Ratio / Principle

As regards Defect No.2 (Non-payment of tax under Reverse Charge Mechanism on Seigniorage Fee paid), which is sub judice before the Hon'ble Supreme Court, in the light of the consistent view taken by this Court the matter is remitted back to the Respondent to pass a fresh order on merits, however, on terms.

Key takeaways

The Petitioner is directed to deposit 10% of the disputed tax within a period of 30 days from the date of receipt of a copy of the Order as a precondition for the remittal concerning Defect No.2.ratio¶26
Upon the Petitioner's deposit, the Respondent is to pass fresh orders on merits and in accordance with law based on the decision of the Hon'ble Supreme Court pertaining to the issue of Non-payment of tax under Reverse Charge Mechanism on Seigniorage Fee paid.ratio¶27

Detailed headnote1 paragraphs

Writ Petition (Article 226, certiorari) by M/s. SKT Mines against the Assistant Commissioner (ST), Kancheepuram Assessment Circle, challenging the Form GST DRC-07 order dated 31.10.2025 (ref. No.ZD331025372459B; GSTIN/33ADOFS7408M1ZI/2020-21; AY 2020-21) passed under Section 74 confirming Defect Nos.2 to 4 of the SCN in Form DRC-01 dated 23.07.2025 (Defect No.1 dropped on the basis of the 09.09.2025 DRC-06 reply). Disposed of at admission by C. Saravanan, J. (Madras HC, 05.02.2026): (i) Defect No.2 - Non-payment of tax under Reverse Charge Mechanism on Seigniorage Fee paid - being sub judice before the Hon'ble Supreme Court, remitted for a fresh order on merits on terms, conditioned on deposit of 10% of the disputed tax within 30 days, the fresh order to be based on the Supreme Court's decision; (ii) Defect Nos.3 & 4 (undischarged tax liability from under-reporting of sales in GST returns; non-raising of e-way bills) similarly remitted subject to deposit of 10% of disputed tax and the entire assessed penalty for Defect 4 within 30 days; (iii) Petitioner to file documents substantiating its DRC-06 reply and to be heard before any fresh order; on default, recovery permitted as if the writ were dismissed in limine. Connected W.M.P.Nos.4551 & 4553 of 2026 closed; no costs. No precedent cited by name.