Case Law Details
Prime Metals Vs Central Board of Indirect Taxes And Customs & Ors. (Supreme Court of India)
The case concerned a challenge by the petitioner to a show cause notice dated 25.06.2025, an Order-in-Original dated 17.12.2025 passed by the adjudicating authority, a circular issued by the tax authorities, and the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 and the Rajasthan Goods and Services Tax Act, 2017.
Before the Rajasthan High Court, the petitioner sought quashing of the impugned circular, declaration that Section 16(2)(c) was unconstitutional, setting aside of the Order-in-Original, and quashing of the show cause notice. One of the principal contentions raised was that no opportunity of cross-examination had been granted to the petitioner during the adjudication proceedings.
The respondents opposed the writ petition on the ground that the petitioner had an effective alternative statutory remedy of appeal against the Order-in-Original dated 17.12.2025. Reliance was placed on a Supreme Court decision holding that writ petitions against show cause notices are generally not maintainable. The respondents also relied upon a Division Bench judgment of the Rajasthan High Court which recognized the availability of an appellate remedy under Section 107 of the CGST Act.
After hearing the parties, the Rajasthan High Court held that the petitioner had a statutory alternative remedy of appeal under Section 107(1) of the CGST Act before the appellate authority. In view of the availability of this remedy, the Court declined to exercise its writ jurisdiction. Consequently, the writ petition was dismissed. However, the High Court granted liberty to the petitioner to raise all legal and factual grounds before the appellate authority.
The petitioner challenged the High Court’s decision before the Supreme Court by filing a Special Leave Petition.
The Supreme Court heard counsel for both sides and observed that, considering the peculiar facts of the case, it was not inclined to interfere with the impugned judgment and orders. Accordingly, the Court declined to set aside the High Court’s decision.
At the same time, the Supreme Court protected the petitioner’s right to pursue the statutory appellate remedy. The Court permitted the petitioner to file an appeal before the appropriate forum or authority within eight weeks from the date of the order, subject to making the necessary pre-deposits.
The Supreme Court further directed that if such an appeal was filed within the stipulated eight-week period along with the required pre-deposits, it should not be dismissed on the ground of delay.
During the hearing, the petitioner’s counsel pointed out that the writ petition had also raised issues concerning the validity of Section 16(2) of the CGST Act, 2017. The Supreme Court expressly left those issues open and clarified that they could be agitated before the appropriate forum or authority. The Court similarly left open all other remedies available to the petitioner.
Accordingly, while refusing to interfere with the High Court’s dismissal of the writ petition, the Supreme Court preserved the petitioner’s right to pursue statutory appellate remedies and to raise all legal contentions, including challenges relating to Section 16(2) of the CGST Act, before the competent forum. The Special Leave Petition was disposed of on these terms, and all pending applications were also disposed of.
Read HC judgement in this case:- Prime Metals Vs Central Board of Indirect Taxes And Customs (Rajasthan High Court)
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Heard Mr. Jatin Harjai, learned counsel for the petitioner and Mr. Raghavendra P.Shankar, learned Additional Solicitor General appearing for the respondent(s).
On the peculiar facts of the case, we are not inclined to interfere with the impugned judgment/order(s).
3. We leave open all remedies that are available to the petitioner to be exercised.
4. We are, however, inclined to permit the petitioner to file the appeal with the necessary pre-deposits within a period of eight weeks from today before the appropriate fora /authority.
5. Mr. Jatin Harjai, learned counsel for the petitioner, at this stage, points out that there have been other issues raised in the writ petition relating to validity of the provisions under Section 16(2) of the Central Goods and Services Tax Act, 2017. Those issues are also left open to he agitated before the appropriate fora /authority.
6. If the appeal with the necessary pre-deposits is filed within eight weeks from today, it will not be dismissed on the ground of delay.
7. The Special Leave Petition is disposed of on the above terms.
8. Pending application(s), if any, shall also stand disposed of.
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