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2025 Supreme(Mad) 5357
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ANITA SUMANTH, MUMMINENI SUDHEER KUMAR, JJ.
M/s. Tamilnadu Transmission Corporation Ltd. - Appellant
Versus
The Commissioner Of GST - Respondent
W.A.Nos.2659, 2925, 2957, 2670, 2671, 2692, 2693, 2865, 2922, 2927, 2928,
2933, 2942, 2943, 2945, 2956, 2662, 2664, 2665, 2666 of 2021, 613 of 2022, W.P.Nos.28949, 28951, 28952, 8933, 3809, 801, 8792 of 2019, 11253 of 2020, 25687 of 2021, CMP.Nos.17375, 17310, 17332, 17336, 17445, 17450, 19190, 19823, 19841, 17371, 17318, 17320, 19844, 19877, 19945, 19979, 20067, 20081 of 2021, 29708 of 2025, 4345 of 2022, WMP.Nos.877, 28698, 28700, 28702, 4231, 9356, 9499 of 2019, 13718 of 2020, 27126 of 2021, 2261 of 2022
Decided On : 15-12-2025
For the Petitioner: Mr.M.A.Mudimannan
For the Respondent: Mr.Rajnish Pathiyil Ssc
The court established that the pre-consultative process under the Central Excise Act is mandatory before issuing show cause notices to ensure compliance and procedural fairness.
Headnote:(A) Central Excise Act, 1944 - Requirement of pre-consultative process - Court holds that pre-consultative process must be mandatory prior to issuance of show cause notices - Courts emphasize the importance of pre-consultation in promoting compliance and reducing adversarial proceedings - Similar issue discussed in Rochem Separation Systems case. (Paras 2, 3, 4, 6, 10)
(B) Procedural fairness - Courts advocate for the integration of Alternative Dispute Resolution mechanisms within statutory frameworks, reinforcing pre-consultation as a critical element in dispute resolution - Circulars by CBIC bind the Department and promote trade facilitation. (Paras 7, 12)
Facts of the case:
The appellant contested several show cause notices in relation to revenue disputes, asserting the necessity of pre-consultation before issuance. The Bombay High Court previously upheld this mandate, underscoring its significance for compliance and dispute resolution. The judgment reflects a collective stance from multiple courts confirming the mandatory nature of this process.
Findings of Court:
The mandatory pre-consultative process is affirmed. Show cause notices issued without adherence to this process are quashed, and the Revenue is instructed to initiate pre-consultation promptly. The overall emphasis is that such processes are vital for statutory fairness and trade facilitation.
Issues: The primary issue addresses whether a pre-consultation process is mandatory before issuing show cause notices. This touches upon the procedural rights of assessees and the operational protocols of the Revenue.
Ratio Decidendi: The court held that the pre-consultative process is not just formal; it plays a crucial role in promoting amicable settlements and mitigating the need for litigation, going beyond mere procedural requirements. Orders issued without this process are invalid. (Paras 3, 6)
Result: All Writ Appeals and Writ Petitions are allowed.
| Table of Content |
|---|
| 1. batch of appeals and petitions identified. (Para 1) |
| 2. mandatory pre-consultative process under central excise act. (Para 2 , 3) |
| 3. cbic circulars are binding for pre-consultation. (Para 4) |
| 4. bombay high court's consensus on pre-consultation. (Para 5 , 6) |
| 5. integration of adr in statutory frameworks. (Para 7) |
| 6. clarification on exceptions to pre-consultation. (Para 8 , 11 , 13 , 14) |
| 7. directions issued for pre-consultation processes. (Para 10) |
| 8. assessees' rights regarding extended limitation. (Para 15 , 16) |
| 9. quashing of assessment orders. (Para 17) |
| 10. final orders and cost dismissal. (Para 18) |
JUDGMENT :
Anita Sumanth, J.
This is a batch of 30 matters, comprising 21 Writ Appeals and 9 Writ Petitions. Barring two Writ Appeals and two Writ Petitions, where the challenge is to Orders-in–original, in the other matters, the challenge is to show cause notices. 29 of the 30 matters relate to proceedings in the case of various Circles of the Tamil Nadu Generation and Distribution Corporation Limited (Tangedco) and the solitary instance involving a private entity is in W.A.No.613 of 2022.
2. We have heard all learned counsel in detail. The issue that arises in common across the Writ Appeals and Writ Petitions is whether pre-consultative process under the Central Excise Act is mandatory prior to issuance of show cause notice on the merits of the matter/passing of orders-in-original.
3. The parties refer to a decision of the Bombay High Court in a batch of matters in Rochem Separation Systems (India) Pvt. Ltd. V. The Union of India, 12025-VIL-1096-BOM-ST wherein an identical issue has been considered by the Division Bench. The Bombay High Court has held that the requirement of pre-consultation process cannot be dismissed as an empty formality and would have to be held to be mandatory.
4.The following decisions of various Courts have been considered for the proposition that Circulars issued by the CBIC are binding upon the authorities, and that thus, pre-consultation process, a laudable move on the part of the Revenue/Department, must hence be taken to be mandatory.
1. Amadeus India Pvt. Ltd. V. Principal Commissioner, Central Excise, Service Tax and Central Tax Commissionerate , 2019 (25) G.S.T.L. 486 (Del.)
2. Back Office IT Solutions Pvt. Ltd. V. Union of India. , 2021 (50) G.S.T.L. 522 (Del.)
3. Dharamshil Agencies and Union of India , 2022 96 GSTR 220
4. K.P.Varghese V. Income Tax Officer, Ernakulam and Anr. , (1981) 4 SCC 173
5. Commissioner of Customs, Calcutta and Ors. V. Indian Oil Corpn. Ltd., and anr. , (2004) 3 SCC 488
6. Union of India and Ors. V. Arviva Industries India Limited and Ors. , (2004) 3 SCC 488
7. Commissioner of Income Tax V. Camco Colour Co. , (2002) 173 CTR 255
8. State of Tamil Nadu V. India Cements Limited , 2011 (13) SCC 247
9. Tube Investment of India Ltd. V. Union of India and Ors. , 2019 (69) GSTR 78 (Mad.)
10. Dharmashil Agencies V. Union of India , 2022 96 GSTR 220
11. Jay Mahakali Industrial Services V. Union of India , 2025 (393) E.L.T. 28(Guj.)
12. Hitachi Power Europe GMBH Project Office V. Central Board of Indirect Taxes and Customs and Ors. , 2019 SCC OnLine MAD 4005
13. Varalaxmi Construction Co. V. Union of India and Ors.
14.Brilliant Corporate Services Private Limited (now known as M/s. Brivas Private Limited) V. Commissioner of GST and Central Excise, Chennai., (2022) 104 GSTR 296
15. Ramnath Prasad V. Principal Commissioner of CGST and Central Excise Patna and Anr. , (2025) 144 GSTR 556
16.Singh Caterers and Vendors V. Directorate General of GST Intelligence (Govt. of India) Department of Revenue, New Delhi and Ors., (2025) 144 GSTR 576
17. Tata Teleservices Limited V. Commissioner of CGST Delhi East and Anr. , 2025 SCC OnLine Del 1374
18. Ruchi Soya Industries Ltd. V. Union of India and Anr. , (2021) 17 GSTR-OL 346
19.Commissioner of Central Excise, Bolpur V. Ratan Melting & Wire Industries, (2008) 231 ELT 22 (SC)
20. Yaduka Agrotech Pvt. Ltd. V. Commissioner of CGST , 2022 (66) G.S.T
