The show cause notice was issued following an investigation into the petitioner's transactions based on intelligence gathered by tax authorities. During the investigation, the statements of various officers of the petitioner were recorded, and the respondents alleged that the petitioner had misrepresented facts regarding outward supplies under the GST Act. These allegations were supported by evidence such as statements recorded during the investigation. Furthermore, the show cause notice invoked the extended period of limitation, claiming that the petitioner had suppressed facts with the intention of evading GST payment from July 2017 to March 2022.

However, the respondents' counsel opposed the petition, arguing that it was premature for the petitioner to approach the Court at this stage, as the show cause notice was not a final order but merely an invitation to respond. The respondents contended that the petitioner should have been required to reply to the notice first and raise any legal or factual objections before the adjudicating authority, which would have the power to drop or proceed with the case based on the submissions.

The Court, upon hearing both parties, acknowledged that the show cause notice raised factual issues such as suppression of facts and misstatement, which fell within the realm of adjudication by the relevant authority. The Court emphasized that judicial review at the stage of a show cause notice is limited and generally discouraged, especially when the petitioner has an alternative remedy available. The Court referenced previous rulings from the Supreme Court, which made it clear that High Courts should not entertain writ petitions against show cause notices unless there are exceptional circumstances, such as a violation of fundamental rights, natural justice, or jurisdictional errors.

In particular, the Court referred to the case of Whirlpool Corporation vs. Registrar of Trade Marks (1998), where it was held that show cause notices should typically be responded to before seeking judicial intervention. The Court also drew upon the ruling in Special Director and Another v. Mohd. Ghulam Ghouse (2004), emphasizing that High Courts should not intervene unless the authority issuing the notice had no jurisdiction over the matter.

The Court also noted that the petitioner had not provided adequate evidence to show that the notice was issued in violation of any legal provisions or that it was issued based on improper retrospective application of a circular. The mere assertion of the petitioner was not sufficient to warrant judicial review at this stage.

The Court dismissed the petition, underscoring that the petitioner had a statutory remedy to contest the show cause notice before the designated adjudicating authority. However, the Court granted the petitioner additional time to respond to the notice and directed that the adjudicating authority provide a personal hearing before passing a reasoned order by January 31, 2025.

This case reinforces the principle that High Courts should avoid interfering with the adjudicatory process at the show cause notice stage unless there are compelling reasons such as jurisdictional issues or violations of legal rights. The Court highlighted the availability of alternative remedies within the statutory framework as the appropriate recourse for the petitioner.