Extended tax powers cannot be reopened on the same facts after advance ruling rejects suppression allegations.

The HC held that the writ petition against the show cause notices was maintainable despite an alternative statutory remedy because interference is permitted where the notice is prima facie without jurisdiction, abusive, or premeditated, and the dispute turned on facts already examined in advance ruling proceedings. It further held that Section 74 of the CGST Act and the analogous excise provision could not be invoked absent fresh material, because fraud, wilful misstatement, or suppression had already been rejected on the same disclosed facts. The notices were therefore without jurisdiction and unsustainable.

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Issues: (i) Whether the writ petition was maintainable against the show cause notices despite availability of an alternative statutory remedy and disputed factual assertions; (ii) Whether the impugned show cause notices could validly invoke Section 74 of the Central Goods and Services Tax Act, 2017 and Section 11A of the Central Excise Act, 1944 when the alleged allegations had already been examined and rejected in advance ruling proceedings.

Issue (i): Whether the writ petition was maintainable against the show cause notices despite availability of an alternative statutory remedy and disputed factual assertions.

Analysis: The rule of alternate remedy is one of discretion and not an absolute bar. Interference at the stage of a show cause notice is permissible where the notice is shown prima facie to suffer from lack of jurisdiction, abuse of process, or premeditated action. The foundational facts relating to the product, the manufacturing process, and the use of aroma and menthol had already been placed before and considered by the advance ruling authority, so the challenge did not require fresh factual adjudication of a kind that would oust writ jurisdiction.

Conclusion: The writ petition was maintainable and the preliminary objection was rejected.

Issue (ii): Whether the impugned show cause notices could validly invoke Section 74 of the Central Goods and Services Tax Act, 2017 and Section 11A of the Central Excise Act, 1944 when the alleged allegations had already been examined and rejected in advance ruling proceedings.

Analysis: Jurisdiction under Section 74 and the analogous excise provision depends upon the existence of fraud, willful misstatement, or suppression of facts with intent to evade tax or duty. The advance ruling and the later proceedings under the review mechanism had already considered the same allegations regarding the product's composition, use of machines, and addition of aroma and menthol, and had rejected the claim of suppression or misrepresentation. In the absence of any fresh material or changed facts, the revenue could not re-agitate issues that had attained finality, and subordinate authorities remained bound by the binding effect of the ruling and the discipline of prior determinations.

Conclusion: The notices were without jurisdiction and could not be sustained.

Final Conclusion: The challenge succeeded because the jurisdictional foundation for reopening the matter was absent, and the advance ruling could not be bypassed on the same facts.

Ratio Decidendi: Where fraud, willful misstatement, or suppression of facts is the statutory precondition for invoking extended tax powers, and the same allegations have already been conclusively rejected on the same disclosed facts, the revenue cannot reopen the matter through fresh show cause notices in the absence of new material.

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