Himachal Pradesh HC Quashes GST Show Cause Notice, Says Department Bound By Unchallenged Advance Ruling

The High Court of Himachal Pradesh has quashed a GST show cause notice issued to Amit Engineers after finding that the notice was issued despite an earlier Advance Ruling that had attained finality between the parties.

A bench of Justice Vivek Singh Thakur and Justice Ranjan Sharma observed:

“in view of the finality attached to the Advance Ruling between the parties, the show cause notice dated 14.02.2025 (Annexure P-6) was without foundation. In view of the finality of the advance ruling between the parties, the notice is not sustainable and nothing is required to be adjudicated with respect to Advance Ruling and for existence Advance Ruling, Notice has to be treated as non-est. In such a situation, when fate of notice is apparent on face of record there will be no justification to relegate the petitioner to face proceeding on this count”

Amit Engineers had challenged a show cause notice issued by the Additional Director, Directorate General of GST Intelligence, Chandigarh.

The petitioner argued that the show cause notice was unsustainable in view of an Advance Ruling dated April 11, 2022, which had attained finality.

The ruling had classified the company's “Roof Mounted AC Package Unit,” manufactured to Railway specifications and supplied exclusively to Indian Railways, under Chapter 86.07 of the GST Tariff.

The petitioner argued that the Department neither disputed nor challenged the Advance Ruling.

The Department, however, argued that Amit should first respond to the show cause notice and avail statutory remedies in case of an adverse order.

The High Court rejected that contention.

It held that while parties are ordinarily relegated to alternate remedies, this case warranted interference because the impugned notice had been issued in conflict with settled law.

The Court further observed,

“In given facts and circumstances, we are of the considered opinion that it is a fit case where discretion under Article 226 of the Constitution of India can be exercised for quashing the impugned notice issued in conflict with the settled law.”

Accordingly, the Court quashed the February 14, 2025 show cause notice and allowed the writ petition.

For Petitioners: Advocates Ajay Jain and Vandana Thakur

For Respondents: Senior Panel Counsel Bharat Bhushan for respondent No. 1 (Union of India); Senior Advocate Vijay Kumar Arora, with Advocates Hitansh Raj, Avantika Bhandari and Godawari, for respondents No. 2 and 3; Deputy Advocate General Raj Negi for respondent No. 4 (State).