ISC Processors Private Limited Vs Superintendent (Calcutta High Court)
The Calcutta High Court disposed of a writ petition challenging a show cause notice dated 10.03.2026 issued under the Central Goods and Services Tax Act, 2017. The principal issue before the Court was whether the show cause notice should be quashed at the threshold on the ground that the proposed demand was based solely on the allegation that the supplier was non-existent, without appreciating the scope of the statutory provisions or conducting a proper enquiry.
The petitioner challenged the legality, validity, and sustainability of the show cause notice. It contended that the only basis for raising the demand was the allegation that the supplier from whom inward supplies were received was non-existent. The petitioner argued that the CGST authority had issued the notice without properly appreciating the scope of Section 74A(5)(ii) of the CGST Act and that the notice suffered from an inherent lack of jurisdiction. It was further submitted that the petitioner was a bona fide purchaser who had made payment to the supplier through banking channels along with the applicable GST. According to the petitioner, input tax credit (ITC) could not be denied solely because of the supplier’s default or alleged non-existence unless proceedings had first been taken against the supplier and fraud, collusion, or wilful misstatement on the part of the petitioner had been established. The petitioner therefore urged that the notice was ex facie without jurisdiction and constituted an abuse of the process of law warranting interference under Article 226 of the Constitution despite the availability of an alternative remedy.
