Facts of the Case:
In this case, the petitioner challenged a fresh Show Cause Notice (SCN) dated 04.05.2026 issued by the GST authorities. The principal grievance arose from the impugned SCN, wherein the department expressly stated that the notice was being issued in continuation of an earlier SCN dated 08.08.2024, despite the fact that the Rajasthan High Court had already quashed that earlier SCN and decided the matter in favour of the taxpayer. The department justified issuance of the fresh notice by stating that acceptance of the High Court’s judgment was under review by the competent authority and that the notice was being issued merely to safeguard revenue.
The petitioner relied upon the Division Bench judgment in Gyankeer Tobacco Products Pvt. Ltd. v. Additional Commissioner, Central Excise & CGST Commissionerate, wherein identical issues concerning classification of tobacco products, advance ruling proceedings, and invocation of Section 74 had already been conclusively decided in favour of the assessee.
The Revenue fairly conceded that the issue involved in the present writ petition was identical to the controversy already adjudicated in Gyankeer Tobacco Products Pvt. Ltd..
Issue:
Whether the department could issue a fresh Show Cause Notice on the same allegations after an earlier SCN had already been quashed by the High Court? Whether a subordinate authority can disregard a binding High Court judgment merely because the department is considering review or further challenge? Whether issuance of a fresh SCN on identical facts amounts to reopening issues that have already attained finality?
Held that:
The Rajasthan High Court observed that the controversy involved in the present writ petition was no longer res integra, since the very same issue arising from the Advance Ruling and proceedings under Section 104 of the CGST/RGST Act had already been adjudicated by the Division Bench in Gyankeer Tobacco Products Pvt. Ltd.
The Court held that once the issue stood conclusively decided by a coordinate Division Bench, there was no reason to take a different view. Consequently, the writ petition was allowed on the same terms as the earlier decision in Gyankeer Tobacco Products Pvt. Ltd., and the impugned SCN was quashed.
A fresh Show Cause Notice cannot be issued on identical allegations after the same controversy has already been adjudicated and decided by a competent High Court. The mere fact that the department is considering review or further challenge does not dilute the binding effect of the judgment. Unless the earlier judgment is stayed or set aside by a superior forum, subordinate authorities are bound to follow it.
Case Name: M/s Gyankeer Tobacco Products Private Limited Versus Additional Commissioner, Central Excise And Central Goods And Services Tax Commissionerate, Udaipur And Rajasthan Appellate Authority, For Advance Ruling, Goods And Service Tax, Rajasthan Authority, For Advance Ruling, Goods And Services Tax, State Of Rajasthan, Through The Secretary, Department Of Finance, Jaipur And Union Of India, Through The Secretary Finance, New Delhi dated 06.08.2026
Citation No. 2026 Taxo.online 2333
