Pre-Consultation Mandatory Before SCN – Proceedings Quashed

Centax Editorial Board

April 14, 2026

• 3 min. read

Case Details: Tamilnadu Transmission Corporation Ltd. vs. Commissioner of GST Central Excise (audit), Coimbatore (2026) 39 Centax 27 (Mad.)

Judiciary and Counsel Details

Anita Sumanth & Mummineni Sudheer Kumar, JJ.
Shri M.A. Mudimannan, for the Appellant.
Shri Rajnish Pathiyil SSC, for the Respondent.

Facts of the Case

Proceedings were initiated by the department by issuing show cause notices and passing orders-in-original under the Central Excise framework, which came to be challenged in a batch of writ petitions and writ appeals. The petitioners contended that the impugned proceedings were vitiated on the ground that the department had failed to follow the mandatory pre-consultation process prescribed under the CBIC Master Circulars prior to issuance of show cause notices and adjudication. It was further contended that such pre-consultation requirement was applicable uniformly and could not be bypassed. The department contended that Instruction F. No. 116/13/2020-CX-3 dated 11-11-2021 excluded cases involving fraud, suppression, or wilful misstatement from the requirement of pre-consultation. The matter was accordingly placed before the Madras High Court.

High Court Held

The Madras High Court held that the pre-consultation process stipulated under the CBIC Master Circulars is mandatory prior to issuance of show cause notices and passing of orders-in-original. It was held that CBIC circulars are binding on the department and must be implemented uniformly, and no exclusion could be read into them except as expressly provided. Consequently, the impugned show cause notices and orders-in-original were quashed, and the proceedings were directed to be revived from the stage of pre-consultation in accordance with the law.

List of Cases Cited

Amadeus India Pvt. Ltd. v. Principal Commissioner — 2019 (25) G.S.T.L. 486 (Del.) — Noted [Para 4, 8, 9]
Back Office IT Solutions Pvt. Ltd. v. Union of India — 2021 (50) G.S.T.L. 522 (Del.) — Referred [Para 4]
Brilliant Corporate Services Pvt. Ltd. v. Commissioner — (2022) 104 GSTR 296 — Referred [Para 4]
Commissioner of Income Tax v. Camco Colour Co. — [2002] 122 Taxman 336 (Bombay) — Referred [Para 4]
Commissioner v. Indian Oil Corpn. Ltd. — 2004 (165) E.L.T. 257 9 (S.C.) — Referred [Para 4]
Commissioner v. Ratan Melting & Wire Industries — 2008 231 E.L.T. 22 (SC) = 2008 (12) S.T.R. 416 (S.C.) — Referred [Para 4]
Dharamshil Agencies v. Union of India — 2021 (55) G.S.T.L. 516 (Guj.) — Referred [Para 4]
Director of Inspection of Income-tax — [1974] 96 ITR 390 (SC) — Referred [Para 4]
Hitachi Power Europe GMBH Project Office v. CBIC — 2019 (27) G.S.T.L. 12 (Mad.) — Referred [Para 4]
Jay Mahakali Industrial Services v. Union of India — 2025 (393) E.L.T. 28 (Guj.) = (2025) 29 Centax 353 (Guj.) — Referred [Para 4)
K.P. Varghese v. Income Tax Officer — (1981) 4 SCC 173 — Referred [Para 4]
Ramnath Prasad v. Principal Commissioner — (2025) 29 Centax 306 (Pat.) — Referred [Para 4]
Rochem Separation Systems (India) Pvt. Ltd. v. Union of India — (2025) 35 Centax 113 (Bom.) — Followed [Para 3, 10]
Ruchi Soya Industries Ltd. v. Union of India — 2021 (377) E.L.T. 432 (Mad.) — Referred [Para 4]
Singh Caterers and Vendors v. Directorate General of GST Intelligence — (2025) 28 Centax 235 (Pat.) — Referred [Para 4]
State of Tamil Nadu v. India Cements Ltd. — 2011 (13) SCC 247 — Referred [Para 4]
Tata Teleservices Ltd. v. Commissioner — 2025 (392) E.L.T. 338 (Del.) = (2025) 28 Centax 191 (Del.) — Referred [Para 4]
Tube Investment of India Ltd. v. Union of India — 2018 (16) G.S.T.L. 376 (Mad.) — Referred [Para 4]
Union of India v. Arviva Industries India Ltd. — Referred [Para 4]
Varalaxmi Construction Co. v. Union of India — (2025) 35 Centax 127 (Bom.) — Referred [Para 4]
Yaduka Agrotech Pvt. Ltd. v. Commissioner — 2022 (66) G.S.T.L. 385 (S.C.) — Referred [Para 4]