Mandatory pre-SCN consultation binds the revenue; a notice issued in breach of that procedure can be quashed in writ jurisdiction.

Pre-show cause notice consultation was mandatory under the departmental circulars, and the impugned notice fell outside the stated exceptions for fraud, collusion, wilful misstatement, suppression of facts, or intent to evade. Because the notice was issued in breach of that binding procedural requirement, it was not sustainable in law and was quashed. The writ petition was maintainable despite an alternative statutory remedy, since the challenge went to the jurisdictional validity of the notice itself and the notice was ex facie not maintainable. The revenue was left free to proceed afresh in accordance with law, including by complying with the pre-notice consultation procedure.

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Issues: (i) Whether pre-show cause notice consultation was mandatory before issuance of the impugned show cause notice. (ii) Whether the writ petition was maintainable despite the availability of an alternative statutory remedy.

Issue (i): Whether pre-show cause notice consultation was mandatory before issuance of the impugned show cause notice.

Analysis: The circular dated 10.03.2017 expressly states that pre-show cause notice consultation in cases involving demands above the prescribed threshold is mandatory. The subsequent clarificatory circular dated 11.11.2021 reiterates the same position and limits the exception to cases involving fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade. The dispute in the present case did not fall within the exempted category. A departmental instruction described as mandatory cannot be treated as merely directory.

Conclusion: The impugned show cause notice was issued in breach of the mandatory pre-SCN consultation requirement and was not sustainable in law.

Issue (ii): Whether the writ petition was maintainable despite the availability of an alternative statutory remedy.

Analysis: Ordinarily, an assessee may be required to pursue the statutory adjudicatory mechanism. However, where the impugned notice is ex facie not maintainable and the challenge is directed to the very jurisdictional legality of its issuance, the existence of an alternative remedy does not bar writ interference.

Conclusion: The writ petition was maintainable and the Court declined to relegate the petitioner to the alternative remedy.

Final Conclusion: The show cause notice was set aside, while leaving the revenue at liberty to proceed afresh in accordance with law, including by following the pre-notice consultation procedure.

Ratio Decidendi: A departmental circular that makes pre-show cause notice consultation mandatory binds the revenue, and a show cause notice issued in violation of that requirement may be quashed in writ jurisdiction notwithstanding the availability of an alternative remedy.

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