2026-VIL-214-CAL
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SGST High Court Cases

GST – Denial of ITC to purchasing dealer on the grounds of retrospective cancellation of registration of its suppliers - Issuance of Show Cause Notice under Section 74 of WBGST Act, 2017 - Whether the show cause notice exhibit any ‘pre-determined mind’ and liable to be interfered with at the writ petition stage – HELD - The show cause notice merely invites the taxpayer to present its case and does not constitute any final determination. The notice issuing authority has prima facie material to question the genuineness of the petitioner's transactions with its suppliers based on the ITC chain, and this is sufficient to issue a notice under Section 74. The burden of proving the eligibility for ITC is on the taxpayer, and the adequacy of the documents submitted by the petitioner can only be examined during the adjudication proceedings, not at the show cause notice stage - The SCN does not exhibit any pre-determined mindset of the authority, as the notice has extensively used the term "prima facie" to indicate that the process is still at the inquiry stage. The petitioner would have a full opportunity to present its case and the authority would be required to consider the reply before passing any final adjudication order. However, the adjudication order passed during the pendency of the writ petition is quashed as the same was passed without affording any opportunity of personal hearing to the petitioner. The petitioner is directed to file its reply to the notice and the authorities are directed to pass a fresh adjudication order after considering the reply and providing an opportunity of hearing to the petitioner – The petition is disposed of
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