Cart Infralog Ltd. & Anr. Vs Additional Commissioner (Calcutta High Court)
The Calcutta High Court considered a writ petition challenging a Show Cause Notice dated 11.06.2025 issued under Section 74 of the Central Goods & Services Tax Act, 2017 for Financial Years 2018-19, 2019-20 and 2023-24, and the consequential Order in Original dated 09.12.2025 passed during pendency of the writ petition. The notice raised two principal allegations: ineligible Input Tax Credit of Rs. 88,57,040/- and irregular excess Input Tax Credit of Rs. 1,48,84,011/- in GSTR-3B compared with GSTR-2A, with the total principal demand stated at Rs. 2,37,41,051/- and the aggregate demand with interest and penalty at Rs. 6.3 Crores. The petitioners contended that supplier-default proceedings had already been initiated against M/s. Aster Trading Company, that supporting documents concerning the transactions and supplier defaults were furnished, and that the adjudicating authority failed to properly consider their reply dated 10.11.2025 and annexed documents.
The petitioners relied on Suncraft Energy Private Ltd., whose ruling concerning denial of ITC to a bona fide purchaser for supplier default/non-reflection in GSTR-2A had been affirmed when the Supreme Court dismissed the Special Leave Petition on 14.12.2023. They also contended that Section 74 had been invoked mechanically to overcome limitation under Section 73(10), without material particulars demonstrating fraud, wilful mis-statement or suppression of facts, relying on G.R. Infra Projects Private Ltd. Ratlum. The Department opposed the writ on the ground of the alternative appellate remedy under Section 107 and maintained that irregular ITC had been detected through departmental enquiry and that adequate opportunity had been afforded.
