Case Law Details
K K Metal Works Vs Superintendent of Central Tax (Telangana High Court)
The Telangana High Court disposed of a writ petition challenging a show cause notice dated 21.03.2026 issued proposing cancellation of the petitioner’s GST registration for alleged violations specified in the notice. The petitioner had promptly appeared before the authorities and filed a detailed reply on 01.04.2026, followed by an additional reply on 09.04.2026. The petitioner also alleged that departmental officials had orally demanded payment of more than ₹90 lakh towards penalty, though the Court noted that there was no material on record to support this allegation.
The respondent submitted that no final order had yet been passed on the show cause notice. Considering this, the Court held that it would be appropriate for the statutory authorities to take the proceedings initiated by the show cause notice to their logical conclusion. It directed the respondent to complete the proceedings within fifteen days.
The Court relied on an earlier Division Bench judgment in W.P. No. 537 of 2026, where it was held that although the show cause notice alleged violation of Rule 21(e) read with Section 16 of the Act, the annexed communication adequately disclosed the basis of the allegations. Since the petitioner had understood the allegations and filed detailed replies, no prejudice was caused, and the Proper Officer was at liberty to decide the proceedings in accordance with law.
The Court further noted that the said Division Bench judgment had been challenged before the Supreme Court in SLP (C) No. 7101 of 2026, which was dismissed on 27.02.2026. The Supreme Court observed that the show cause notice had been preceded by several communications seeking explanation regarding alleged wrongful availment of Input Tax Credit (ITC), that the petitioner had submitted a detailed reply, and that the writ petition had been dismissed as not maintainable. The Supreme Court reiterated the settled principle that a writ petition ordinarily does not lie against the issuance of a show cause notice, referring to its decisions in Secretary, Ministry of Defence and Others v. Prabhash Chandra Mirdha and Commr. of Central Excise Commissionerate v. M/s. Krishna Wax (P) Ltd.
Following the same approach, the Telangana High Court disposed of the writ petition and directed the respondent to pass a decision, if not already passed, within fifteen days. No order as to costs was made, and all pending miscellaneous applications stood closed.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Heard Mr. Mohd Mukhairuddin, learned counsel for the petitioner, and Mr. Dominic Fernandes, learned Senior Standing Counsel for CBIC appearing for the respondent. Perused the record.
2. The instant writ petition has been filed challenging the show cause notice, dated 21.03.2026.
3. Vide the said show cause notice, the department has called upon the response from the petitioner as to why their GST registration should not be canceled for the alleged violation which are reflected in the show cause notice.
4. It appears that the petitioner immediately had entered appearance before the authorities concerned and submitted a detailed response, dated 01.04.2026, which is enclosed along with the writ petition. In addition to the same, there is also yet another reply that was filed on 09.04.2026.
5. The grievance of the petitioner is that when they approached the authorities they were orally informed to deposit more than Rs.90,00,000/- (Rupees Ninety Lakhs) towards penalty, though there is nothing on record to support the same.
6. The learned Senior Standing Counsel for the department however submits that it appears that no final orders till date has been passed on the said show cause notice.
7. In view of the same, we are of the considered opinion that it would be more appropriate if the respondent authorities itself is directed to ensure that the show cause notice which was issued and the proceedings initiated shall be taken to its logical conclusion at the earliest within a period of fifteen (15) days from today.
8. The view of this Court stands fortified by the judgment passed by the Division Bench of this Court in W.P.No.537 of 2026, which stood decided on 02.02.2026; wherein paragraph No.6, it has been quoted as under:
6. Though it appears that the impugned show cause notice for cancellation of registration simply alleges violation of Rule 21(e) of the Rules by the petitioner by availment of ITC in violation of provisions of Section 16 of the Act and the Rules made thereunder, the show cause notice annexes the supporting document, which is the communication between respondent No.2- Deputy Director, DGGI, Hyderabad, and respondent No.3- Deputy/Assistant Commissioner of Central Tax, Shamshabad Division, Hyderabad. Petitioner had, in its replies dated 25.12.2025, categorically come out with a stand on the allegation of availment of ITC from non- existent suppliers thereby indicating that it has understood the contents of the impugned show cause notice. No prejudice is likely to be caused, as the petitioner, having understood the contents of the charges contained in the show cause notice, adequately replied thereto. Respondent No.1-Proper Officer, in such circumstances, is at liberty to proceed on the basis of the replies to the show cause notice for cancellation of registration, in accordance with law and take a decision thereon within a period of two weeks. In the facts and circumstances, we are of the view that the decisions relied upon by the petitioner would not come to its aid.
9. The said order recently subjected to challenge before the Hon’ble Supreme Court by way of an SLP (C) No.7101 of 20261 and the Hon’ble Supreme Court also has dismissed the said SLP, vide its order, dated 27.02.2026; wherein the Hon’ble Supreme Court in paragraph Nos.2 to 4 has held as under:
2. In fact, the show cause notice was preceded by several communications forwarded by the jurisdictional proper officer addressed to the petitioner calling upon petitioner to explain the alleged 18:33:45 IST Reason: huge availment of “Input Tax Credit-ITC” for which petitioner replied on 25.08.2025 contending inter alia that investigation of the same issue has already been carried out by DGGI and initiation of parallel proceedings would amount to duplication and harassment.
3. Apprehending coercive steps being taken against the petitioner, the writ petition came to be filed wherein an interim order came to be passed on 08.10.2025 directing the respondent herein not to take coercive action against the petitioner. It is thereafter show cause notice in question came to be issued on 17.12.2025, for which detailed reply has been submitted by the petitioner. Subsequently, by impugned order writ petition came to be dismissed on the ground writ petition is not maintainable.
4. It is trite law that no writ lies against an issuance of show cause notice and such writ petition would not be maintainable. This position has been explained to by this Court in the case of Secretary, Ministry of Defence and Others v Prabhash Chandra Mirdha, (2012) 11 SCC 565 and in the judgment of Commr Of Central Excise Commissionerate v. M/s. Krishna Wax (P) Ltd., in Civil Appeal No.8609/2019 disposed of on 14.11.2019 vide paragraph 12.
10. In view of the same, the present writ petition also stands disposed of. Let the respondent take a decision, if not already taken, positively within a period of fifteen (15) days from today. No order as to costs.
Miscellaneous applications pending, if any, shall stand closed.
Note:
1 (2026) 40 Centax 325 (S.C.)
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