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AI Tool Has No Legal Sanction to Prepare GST SCN: P&H HC

Case Law Details

TaxGuru Citation
2026 taxguru.in 9337
Case Name
SRO India Vs State of Punjab And Another (Punjab and Haryana High Court)
Date of Judgement/Order
Only available for paid members
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SRO India Vs State of Punjab And Another (Punjab and Haryana High Court)

The Punjab and Haryana High Court considered a writ petition challenging Show Cause Notice (DRC-01A) dated 02.02.2025. The petitioner contended that the concerned officer had issued the notice without independent application of mind and had instead relied on an Artificial Intelligence (AI) tool. This contention was based on a document uploaded with the show cause notice containing AI-generated suggestions, including optional enhancements for strengthening the proposed order and adding reasoning. The petitioner argued that the statutory requirement of independent consideration by the competent authority was absent. The State submitted, on instructions from the concerned STO, that the AI-related references appearing at the end of the show cause notice had been inadvertently uploaded on the portal.

The High Court did not accept this explanation. It observed that the statute requires the competent authority to examine the facts of the case and independently apply its mind before issuing a show cause notice. The Court further observed that the use of an AI tool for preparation and issuance of a show cause notice had not been shown to be permissible under the statute. Holding that the notice had been issued primarily relying upon the AI tool, the Court quashed the Show Cause Notice (DRC-01A) dated 02.02.2025 and all consequential proceedings. Liberty was reserved to the competent authority to proceed afresh in accordance with law after independently examining the facts of the case.

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Author Info

CA Sandeep Kanoi
Qualification: CA in Job / Business
Company: Taxguru Consultancy
Location: Mumbai, Maharashtra
Articles Published: 19,669

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