No, the Hon’ble Delhi High Court in Sulender Shah and Anr. v. Additional Commissioner/Joint Commissioner CGST Delhi and Anr., [2025 TAXONATION 1157 (DELHI)] dismissed the writ petition and refused to interfere with the adjudication proceedings at the stage of show cause notice. The petitioners—a Chartered Accountant and a trader—assailed the show cause notice dated 02.08.2023 and corresponding GST DRC-01 and DRC-02, contending that the documents were non-compliant with law as they failed to compute individual liability separately for each noticee. It was submitted that these proceedings had serious consequences as the Institute of Chartered Accountants of India had initiated disciplinary action against one of the petitioners based on the said notice. The allegations in the show cause notice involved floating of fake firms by third parties with whom the petitioners had business links, as partially admitted by them in recorded statements. The Court observed that both GST DRC-01 and DRC-02 referred to the show cause notice and clearly stated that tax/penalty had been imposed vide notice dated 02.08.2023, with the annexure to the notice containing detailed computation. The Court held that in cases involving multiple parties and a web of transactions, reference to annexures in the SCN is sufficient at the notice stage to inform the noticee of the tax implications. It was further held that the writ jurisdiction under Article 226 could not be invoked to challenge the show cause notice or to assess the truthfulness of petitioners’ statements recorded by the department. Since the adjudication was still in progress, the Court found no reason to interfere and disposed of the petition, directing that the proceedings be continued in accordance with law.
Author’s Comments:
This ruling reaffirms the well-established principle that writ jurisdiction under Article 226 is not ordinarily exercisable at the stage of show cause notice, unless there exists a clear case of lack of jurisdiction, breach of natural justice, or patent illegality. The Delhi High Court has rightly declined to entertain a challenge at the pre-adjudication stage, emphasizing that mere procedural or formatting grievances in DRC-01/DRC-02—when detailed computation and reference to the annexure is available—do not merit judicial interference.
However, in the author’s considered opinion, the case raises serious concerns about procedural regularity and fairness in multi-party SCNs, particularly when liability is sought to be imposed on multiple distinct entities/persons through a single show cause notice. When a joint SCN is issued without clear bifurcation of tax liability and individual allegations, it creates practical impediments in the exercise of statutory remedies, such as filing of separate replies, seeking rectification, or pursuing appeal by each noticee. The GST common portal currently does not allow individual responses, filings, or appeals by separately named persons against a single SCN, effectively curtailing the independent legal strategy available to each party.
Further, a single adjudication proceeding based on joint notice may inadvertently result in one noticee's defence influencing or prejudicing the outcome for another, especially when the nature of involvement, documentary evidence, and legal grounds differ. In such cases, each noticee must be allowed to rebut independently and avail legal remedies on their own merits. If such opportunity is denied merely because the DRC-01 was issued jointly, it offends the principles of natural justice and undermines the right to fair hearing.
GST Case Law Sulender Shah and Anr. v. Additional Commissioner/Joint Commissioner CGST Delhi and Anr.
Citation-2025 TAXONATION 1157 (DELHI) (Click here to read Full Case law)
CA Ritesh Arora
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