Suppose a tax investigation results in two separate Show Cause Notices against the same taxpayer.

Both arise from the same investigation. Both are placed before the same adjudicating authority. They are even heard together.

Now imagine that the High Court stays proceedings under one of those notices.

Does the other notice automatically get stayed too?

It may seem intuitive that proceedings arising from the same investigation should move together. But the Delhi High Court has clarified that this is not necessarily how the law works.

In A V International & Anr. v. Additional Director General, Directorate of Revenue Intelligence & Ors., decided on August 7, 2026, the Delhi High Court held that two Show Cause Notices can retain their separate legal identity even when they originate from the same investigation, are assigned to the same adjudicating authority and are heard together.

As a result, a stay granted in relation to one SCN will not automatically stop adjudication of the other unless the court order expressly says so.

For businesses dealing with multiple tax notices arising from one investigation, the judgment contains an important lesson: connected does not necessarily mean legally inseparable.

What Happened in This Case?

A V International was engaged in importing and trading signage materials, primarily from China and Taiwan.

In 2016, the Directorate of Revenue Intelligence (DRI) initiated an investigation alleging mis-declaration and undervaluation of imported goods. Searches followed, certain goods were seized and those goods were subsequently provisionally released against a bond and bank guarantee.

The investigation eventually resulted in not one, but two Show Cause Notices.

The first SCN, issued on March 27, 2017, related specifically to the goods seized during the investigation. It proposed confiscation of those goods along with consequential penalties.

Almost three years later, a second SCN, dated May 11, 2020, was issued in relation to the petitioners’ earlier imports. This notice proposed recovery of customs duty, along with interest and penalty under Section 28 of the Customs Act, 1962.

Although both notices flowed from the same broader investigation, they were not seeking exactly the same relief.

That difference eventually became crucial.

Why Did the Two Proceedings Appear to Be One?

In October 2020, the Principal Commissioner of Customs (Import), ICD Tughlakabad was appointed as the common adjudicating authority for both notices.

Common personal-hearing notices were subsequently issued and both matters were taken up together.

From a taxpayer’s perspective, therefore, the two proceedings understandably appeared closely intertwined.

The position became more complicated after the Supreme Court’s decision in Canon India Pvt. Ltd. v. Commissioner of Customs. CBIC subsequently directed certain matters to be placed in the Call Book. Following legislative amendments introduced by the Finance Act, 2022, those matters were later taken out of the Call Book and adjudication recommenced.

The taxpayer then challenged the second SCN before the Delhi High Court, arguing, among other things, that adjudication had become time-barred under Section 28(9) of the Customs Act.

On December 14, 2023, the High Court stayed further proceedings under the second SCN.

And this is where the central controversy began.

The First SCN Was Still Adjudicated

Despite the stay relating to the second SCN, the adjudicating authority proceeded with the first SCN and passed an Order-in-Original on February 1, 2024.

The taxpayer challenged this as well.

Its argument was fairly straightforward:

If both notices came from the same investigation, were placed before the same adjudicating authority and were being heard together as part of what was effectively a common adjudication, how could the Department suddenly separate them and proceed with one while the other remained stayed?

The Delhi High Court did not accept that argument.

Same Investigation Does Not Mean Same Proceeding

The Court focused on the legal character of each notice.

The first SCN concerned the seized goods and proposed confiscation and penalties.

The second SCN concerned earlier imports and proposed recovery of customs duty, interest and penalty under Section 28.

Therefore, although the two notices shared a common investigative background, each had a separate subject matter and an independent statutory foundation.

The Court held that administrative convenience does not change this position.

Appointing the same adjudicating authority, issuing common hearing notices or hearing both matters together does not merge two distinct SCNs into one legal proceeding.

In other words, procedural coordination cannot erase substantive legal independence.

A Stay Order Means What It Says

The second and perhaps more important part of the judgment concerns the interpretation of interim orders.

The stay granted by the High Court in December 2023 expressly related to proceedings under the second SCN.

It did not say that proceedings under the first SCN were stayed.

It did not restrain the adjudicating authority from deciding the first SCN.

The Court therefore held that the scope of an interim order cannot be enlarged merely by implication.

This is an important practical point.

If a taxpayer has three connected notices and obtains a stay referring specifically to only one of them, it cannot automatically be assumed that the remaining two are also
protected.

The wording of the relief sought — and ultimately granted — becomes critical.

What About Natural Justice and the Right to Challenge the Order?

The taxpayer had also argued that relied-upon documents had not been supplied and that adequate opportunity of hearing had not been provided.

The High Court, however, declined to interfere with the Order-in-Original on those grounds.

It noted that these issues involved examination of the adjudication record and could appropriately be considered by the CESTAT through the statutory appellate mechanism.

The Court reiterated the general principle that where an effective alternative remedy is available, writ jurisdiction under Article 226 is ordinarily exercised only in exceptional circumstances.

The taxpayer was therefore given liberty to pursue its appellate remedy before CESTAT.

The Limitation Issue Was Left Open

Another interesting part of the dispute involved the time limit for adjudication under Section 28(9) of the Customs Act.

The taxpayer had questioned whether the proceedings had become time-barred and whether an extension granted in March 2023 was valid, particularly when the extension had allegedly not been communicated.

The High Court deliberately did not decide these questions on merits.

Issues involving limitation, the Call Book mechanism, the extension granted by the authority and the effect of its non-communication were kept open for consideration before the appropriate forum.

This is important because the judgment should not be read as settling every issue surrounding delayed Customs adjudication. Its primary significance lies elsewhere: the independent identity of separate SCNs and the limited reach of an interim stay.

Why This Decision Matters Beyond Customs

Although the case arose under the Customs Act, its reasoning can have wider relevance — including under GST.

It is common for a single GST investigation to lead to multiple notices covering different tax periods or different issues under Sections 73 or 74 of the CGST Act.

The reasoning discussed in the source suggests that each such SCN may continue to constitute an independent proceeding. Therefore, a stay concerning one tax period or one notice may not automatically halt adjudication of every other notice arising from the same investigation.

Section 75(1) of the CGST Act also deals with exclusion of the period during which issuance of an order is stayed by a court or tribunal when computing the time limit for orders under Sections 73 and 74.

For taxpayers facing multiple connected proceedings, this makes the precise scope of interim protection particularly important.

Key Takeaways for Taxpayers

The Delhi High Court’s decision brings out four practical principles:

• Multiple SCNs arising from the same investigation do not automatically become one proceeding. Their legal character depends on the subject matter, statutory basis and relief proposed in each notice.
• A common adjudicating authority or joint hearing is largely an administrative arrangement. It does not necessarily require the notices to culminate in one composite order.
• A stay of one SCN does not automatically stay another. Courts will generally read an interim order according to its actual wording rather than extend it by implication.
• When seeking interim relief, drafting matters. If a taxpayer wants protection across several connected notices or proceedings, the relief sought — and the order ultimately obtained — should expressly cover them.

The Larger Lesson

Tax investigations frequently create a web of connected proceedings. They may share facts, documents, officers and hearing dates.

But legally, each notice may still have a life of its own.

That is the central message of this ruling.

For businesses and tax professionals, the practical question is therefore not simply:

“Did all these notices arise from the same investigation?”

The more important questions are:

What does each SCN independently allege? What statutory provision does it invoke? And exactly which proceedings does the court’s stay order cover?

In tax litigation, that distinction can determine whether an adjudication genuinely stands halted — or continues despite a related matter being before the court.