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2026 Supreme(Online)(Raj) 11797

HIGH COURT OF RAJASTHAN (JODHPUR BENCH)
Sanjeev Prakash Sharma, ACJ, Baljinder Singh Sandhu, J
Gyankeer Tobacco Products Pvt. Ltd. – Appellant
Versus
Additional Commissioner, Central Excise And Central Goods and Services Tax Commissionerate – Respondent
D.B. Civil Writ Petition No. 18915/2024

Advocates:
For the Appellants/Petitioners: Sanjay Jhanwar, Falgun Buch, Prateek Gattani, Gopal Krishan Chhangani, Vishal Singh, Rahul Lakhwani, Wilson Joy
For the Respondents: Mahaveer Bishnoi, Harshvardhan Singh, Rajvendra Saraswat, Rishabh Dadhich, Jitesh Kumar Suthar

An Advance Ruling is binding on the assessee and Revenue; the Department cannot use Section 74 to re-litigate issues already decided by the Advance Ruling authority without establishing fresh evidence of fraud or willful suppression, as re-opening settled issues violates judicial discipline and the statutory scheme.

Headnote:(A) Central Goods and Services Tax Act, 2017 - Section 74 - Section 97 - Section 100 - Section 104 - Central Excise Act, 1944 - Section 11A - Section 11AA - Section 11AC - Binding nature of Advance Ruling - Re-agitation of matters settled by the competent authority - Issuance of show-cause notice (SCN) alleging fraud and suppression of facts - Requirement of existence of jurisdictional pre-conditions.

(B) Writ jurisdiction - Availability of alternative remedy - Held, rule of exhaustion of alternative remedy is a rule of policy, convenience and discretion rather than a rule of law - Interference at the stage of SCN is permissible where the notice suffers from patent lack of jurisdiction, reflects non-application of mind, or amounts to an abuse of process of law (Paras 22, 24).

(C) Judicial discipline - Principles require that orders of appellate authorities must be followed unreservedly by subordinate authorities - Attempt to reopen settled issues without fresh material is impermissible (Paras 35, 37).

Facts of the case:
The petitioner challenged show-cause notices (SCNs) issued under Section 74 of the CGST Act and Section 11A of the Central Excise Act, proposing massive demands for duty and penalty, despite already having obtained a favorable Advance Ruling classifying their product as 'unmanufactured tobacco'. The Revenue alleged fraud, misrepresentation, and suppression of facts.

Findings of Court:
The court held that the allegations of suppression were already examined and rejected in prior proceedings under Section 104. The jurisdictional preconditions for invoking Section 74, namely 'fraud' or 'willful misstatement', were not satisfied. The SCNs were an attempt to collaterally attack a finalized ruling without demonstrating any fresh material.

Issues: Whether the writ petition is maintainable against a show-cause notice? Whether the Department can invoke Section 74 to re-open issues already settled by an Advance Ruling in the absence of fresh material?

Ratio Decidendi: An Advance Ruling is binding both on the applicant and the jurisdictional officer. Once the authority has adjudicated upon the facts and these findings have attained finality, the Department cannot re-open the same allegations under Section 74 without proving fresh facts that constitute willful suppression or fraud, as such actions undermine statutory finality and the object of the Advance Ruling system.

Result: Writ petition allowed; impugned show-cause notices quashed.

Table of Content
1. adjudication history and initiation of challenged show cause notices. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9)
2. petitioner's argument regarding finality of advance ruling and lack of jurisdiction. (Para 10 , 11 , 12 , 13)
3. respondent's contention regarding maintainability and alleged suppression of facts. (Para 14 , 15 , 16 , 17 , 18)
4. court's analysis on maintainability and the scope of writ jurisdiction. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25)
5. determining jurisdictional validity of scns and finality of ruling. (Para 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40)

Judgment

1. Date of Conclusion of Arguments : 25.02.2026

2. Date on which judgment was reserved : 25.02.2026

3. Whether the full judgment or only

operative part is pronounced : Full

4. Date of pronouncement : 16.04.2026

Per: Baljinder Singh Sandhu, J.

FACTS OF THE CASE

1. The instant petition is filed by the petitioner challenging the validity of the impugned show cause notices both dated 8th August 2024 issued by the Additional Commissioner, Central Excise and Central Goods Services Commissionerate, Udaipur (herein after referred to as Respondent No. 1) under Section 74 of the Central Goods and Services Act, 2017 (hereinafter referred to as CGST Act) and Section 11A with 11AA and 11AC of the Central Excise Act, 1944 (hereinafter referred to as Central Excise Act) proposing the demand of GST of Rs. 195,06,61,336/- and Central Excise Duty of Rs. 71,34,39,871/- along with interest and equivalent penalty.

2. The brief facts leading to filing of the petition are that the Petitioner filed an application for Advance Ruling under Section 97 of the Rajasthan Goods and Services Act (hereinafter referred to as RGST Act) before Rajasthan Authority For Advance Ruling, Goods And Services Tax, Jaipur (hereinafter referred to as AAR) seeking an Advance Ruling with respect to the classification of its product as unmanufactured tobacco pre-mixed with lime (i.e., supplied without lime tube) under the brand name ‘Keer Kokil' (the Product intended to be sold by the Petitioner) under GST and the rate of GST and Compensation Cess applicable on the same. In the Advance Ruling Application and vide its letters dated 09th May 2022 and 16th May 2022, the Petitioner stated that the Product is unmanufactured tobacco pre-mixed with lime along with addition of certain aroma and menthol for freshness and to avoid bad smell, prepared either using machines or manually.

3. Deputy Commissioner, State Tax, Commercial Taxes Department, Rajsamand (hereinafter referred to as Respondent No. 4), being the Jurisdictional Officer of the Petitioner, vide letters dated 18th January 2022 and 10th May 2022 submitted its comments that the Product falls under the category of unmanufactured tobacco without lime tube and that the Product would be supplied to the customers pre-mixed with lime and there will be no change in the tobacco leaves in the process.

4. AAR passed the Advance Ruling dated 1st June 2022 declaring that the Product is 'unmanufactured tobacco' classifiable under CTH 24012090- ‘Others’, attracting GST at 28% and Compensation Cess at 71%.

5. After elapse of about eleven months’ time, Respondent No.1 initiated an investigation against the Petitioner on the allegation that the Petitioner was not preparing the Product as per the Advance Ruling.

6. Thereafter, Respondent No. 1 filed a complaint/letter dated 4th May 2023 before AAR alleging that the Petitioner was misusing the Advance Ruling and therefore, alleging that the Advance Ruling was obtained by misrepresentation and suppression of facts.

7. To which the AAR passed an order dated 10th July 2023 rejecting the complaint/letter dated 4th May 2023 of Respondent No. 1 and re-confirmed the Advance Ruling holding that all the material facts and information were placed on record before the AAR.

8. Thereafter, Respondent No. 1 filed an appeal before Rajasthan Appellat

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2026 Supreme(Online)(Raj) 11797

HIGH COURT OF RAJASTHAN (JODHPUR BENCH)Sanjeev Prakash Sharma, ACJ, Baljinder Singh Sandhu, JGyankeer Tobacco Products Pvt. Ltd. – AppellantVersusAdditional Commissioner, Central Excise And Central Goods and Services Tax Commissionerate – RespondentD.B. Civil Writ Petition No. 18915/2024

Cases Referred (4)

HIGH COURT OF RAJASTHAN (JODHPUR BENCH)
Sanjeev Prakash Sharma, ACJ, Baljinder Singh Sandhu, J
Gyankeer Tobacco Products Pvt. Ltd. – Appellant
Versus
Additional Commissioner, Central Excise And Central Goods and Services Tax Commissionerate – Respondent
D.B. Civil Writ Petition No. 18915/2024