M/S Prime Metals vs. Central Board Of Indirect Taxes And Customs

Facts

The petitioner, M/s Prime Metals, filed a writ petition challenging a show cause notice dated June 25, 2025, and an original order dated December 17, 2025, passed by the Assistant Commissioner, CGST Division-Alwar-II. The petitioner also sought to quash Circular No. 3/3/2017 issued by the Central Board of Indirect Taxes and Customs and declare Section 16(2)(c) of the CGST Act, 2017, as ultra vires. The petitioner's primary contention was that they were not provided an opportunity for cross-examination. The respondents argued that a writ petition is not maintainable against a show cause notice and that the petitioner has an alternative statutory remedy of appeal.

Held

The Court held that the writ petition is not maintainable. The primary reasoning was based on the existence of a statutory alternative remedy of appeal under Section 107(1) of the CGST Act, 2017, before the appellate authority. The Court referred to the Supreme Court's stance that no writ lies against the issuance of a show cause notice and that such petitions are not maintainable. Additionally, a Division Bench of the same High Court had previously considered the provision of appeal under Section 107 of the CGST Act and observed that an alternative remedy is available. Therefore, the Court was not inclined to interfere in the matter. The petitioner was granted liberty to raise all their legal and factual grounds before the appellate authority. The issues regarding the constitutional validity of Section 16(2)(c) and the legality of Circular No. 3/3/2017 were not expressly decided due to the dismissal on the ground of alternative remedy.

Key Issues

1. Whether a writ petition is maintainable against a show cause notice and an original order when an alternative statutory remedy of appeal is available, as per Section 107(1) of the CGST Act, 2017? 2. Whether Section 16(2)(c) of the Central Goods and Services Tax Act, 2017, is ultra vires the Constitution of India? 3. Whether Circular No. 3/3/2017 issued by the Central Board of Indirect Taxes and Customs is without authority from law? Petitioner's arguments: The petitioner contended that they were denied an opportunity for cross-examination, which is a fundamental procedural fairness requirement. They sought to quash the impugned notices and orders on this basis and also challenged the constitutional validity of Section 16(2)(c) and the legality of the circular. Respondents' arguments: The respondents argued that a writ petition is not maintainable against a show cause notice, citing Supreme Court judgments in M/s. Trillion Lead Factory Private Ltd. and Secretary, Ministry of Defence. They further relied on a Division Bench judgment of the same High Court in Tanushree Logistics Private Limited, which held that an alternative remedy of appeal under Section 107 of the CGST Act is available and should be availed.