Facts of the Case:
In this case, the e petitioner challenged a Show Cause Notice (Form GST DRC-01A) issued under the GST law on the ground that it had been generated using an Artificial Intelligence (AI) tool without any independent application of mind by the proper officer. The challenge was founded on the contents of the uploaded notice itself, which inadvertently contained AI-generated prompts such as “make it lethal”, “add OIO version”, and suggestions to strengthen the order by adding case law, rebuttals, and findings.
The State contended that these AI references were accidentally uploaded on the GST portal. However, the petitioner argued that the very presence of such AI prompts demonstrated that the statutory authority had mechanically relied upon AI in preparing the show cause notice instead of independently examining the facts and applying its own mind.
Issue:
Whether a GST Show Cause Notice prepared with the assistance of an Artificial Intelligence tool, without independent application of mind by the proper officer, satisfies the statutory requirement of lawful adjudicatory proceedings.
Held That:
The Court held that the GST statute requires the competent authority to independently examine the facts and apply its own mind before issuing a show cause notice. The use of an Artificial Intelligence tool for preparing and issuing such notice has no statutory sanction.
The Court was not convinced by the Department’s explanation that the AI-generated references had been inadvertently uploaded, observing that the contents of the notice itself indicated reliance on AI-generated drafting. Accordingly, the Court held that the notice suffered from lack of independent application of mind and was therefore legally unsustainable. The department was granted liberty to initiate fresh proceedings in accordance with law after independently examining the facts of the case.
The Court allowed the writ petition and quashed the impugned Show Cause Notice along with all consequential proceedings.
Case Name: M/s. SRO India Versus State Of Punjab And Another dated 07.07.2026
