M/S Karo Sambhav Private Limited Through Its Director Mr. Pranshu Singhal vs. Additional/Joint Commissioner, Central Goods And Services Tax, Delhi North & Anr.

Held

The Court held that at this stage, interference with the Show Cause Notice and the ongoing adjudication process would be premature and would hamper the decision of the Adjudicatory Authority. The Court noted that the Petitioner had already filed a reply to the notice, and the Adjudicatory Authority was yet to take a decision thereon. The defense put forth by the Petitioner was before the Authority, which would consider it in accordance with the law. The Court observed that the SCN itself indicated that no material was found against the Petitioner during the investigation. Therefore, the Court disposed of the Writ Petition with these observations, allowing the Adjudicatory Authority to proceed with its decision-making process. No specific issue was expressly left undecided, as the Court chose not to intervene in the ongoing process.

Facts

The Petitioner, M/s Karo Sambhav Private Limited, filed a writ petition challenging a Show Cause Notice (SCN) dated August 27, 2026, issued under Section 74/74A(5)(ii) of the CGST Act, 2017. This SCN was part of a common notice issued to multiple firms following an investigation into a large-scale GST fraud involving bogus firms created using forged identities. The noticees were alleged to have engaged in goodless invoices to avail Input Tax Credit. The Petitioner had already filed a reply to the SCN. Notably, the SCN itself indicated that no material was found against the Petitioner during the investigation. The Adjudicatory Authority had not yet made a decision on the Petitioner's reply.

Key Issues

1. Whether the High Court should interfere with the ongoing adjudication process at the stage of a Show Cause Notice, particularly when the Petitioner has already filed a reply and the Adjudicatory Authority is yet to decide. Petitioner's Argument: The Petitioner contended that the SCN itself recorded that no material was found against them during the investigation, implying a lack of basis for the notice. They sought intervention at this stage. Respondents' Argument: The respondents (Additional/Joint Commissioner, Central Goods and Services Tax, Delhi North & Anr.) did not present any arguments as none appeared. However, the Court's observations suggest that interference would hamper the decision-making process for multiple noticees.