Facts of the Case

The petitioner, R.R. Construction, represented by its partner R. Saravanan, challenged a notice dated 09.10.2025 (referenced in the order as 19.10.2025) levying GST on the Seigniorage Fee/Royalty and DMFT (District Mineral Foundation Trust) contribution paid for quarrying and transporting minerals, for the tax period 2021-2022. The petitioner submitted that the underlying legal question — whether GST is leviable on royalty/seigniorage fee paid to the State for mineral extraction rights — was already pending consideration before the Supreme Court of India.

Issues Involved

  1. Whether GST proceedings on Seigniorage Fee/Royalty and DMFT for mineral quarrying should be kept in abeyance pending the Supreme Court's decision on the underlying issue.
  2. What interim safeguard, if any, should be imposed on the petitioner pending final resolution.

Petitioner's Arguments

  • The dispute pertains to levy of GST on Seigniorage Fee/Royalty paid for quarrying and transporting mineral, an issue now pending before the Hon'ble Supreme Court.
  • Given the pendency of the larger question, the writ petition should be disposed of at the admission stage itself by directing the respondent to keep all proceedings in abeyance.

Respondent's Arguments

  • The Additional Government Pleader appeared for the respondents; the order does not record a separate contest to keeping proceedings in abeyance, given the acknowledged pendency of the issue before the Supreme Court.

Court Order / Findings

  • Considering that the issue of levy of GST on Seigniorage Fee/Royalty for mineral quarrying was 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 ruling and thereafter proceed in accordance with law.
  • The petitioner was directed to deposit 10% of the disputed tax as security, in line with directions issued in the petitioner's own earlier case.

Important Clarification

  • Where the core legal question — GST leviability on Seigniorage Fee/Royalty paid for mineral extraction rights — is pending before the Supreme Court, High Courts commonly dispose of individual writ petitions at the admission stage by directing abeyance of proceedings, rather than deciding the substantive question themselves.
  • Such abeyance is typically conditioned on the taxpayer depositing a percentage (here 10%) of the disputed tax as security, protecting Revenue's interest pending the final outcome.

Sections Involved

  • Section 9, CGST Act, 2017 — levy and collection of GST, the provision under which royalty/seigniorage fee is sought to be taxed under reverse charge.
  • Section 7, CGST Act, 2017 — scope of 'supply', relevant to whether grant of mining rights constitutes a taxable supply.

Decision – In Favour of

Disposed of with directions; proceedings kept in abeyance pending the Supreme Court's ruling, subject to the petitioner depositing 10% of the disputed tax as security.

Case Details

Court: Madurai Bench of Madras High Court
Case No.: W.P.(MD) No. 32119 of 2025 and W.M.P.(MD) Nos. 25265 and 25266 of 2025
Coram: Hon'ble Mr. Justice G.R. Swaminathan
Date of Order: 12.11.2025

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