GST
Notice based only on supplier cancellation or an alert
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Facts
A show cause notice must disclose the material relied on and link you to the alleged wrongdoing, especially in fraud cases. You can ask for that material and say that cancellation alone is not enough.
Provisions and law
- Sec 74A, CGST Act 2017For FY 2024-25 onwards, one procedure for demands: notice within 42 months of the annual return due date, order within 12 months of the notice; penalty depends on whether fraud is alleged.
- Sec 75(4), CGST Act 2017A personal hearing must be granted where requested in writing or where any adverse decision is contemplated.
- Sec 155, CGST Act 2017The person who claims ITC has the burden of proving that the claim is genuine.
Analysis
Write first asking for copies of the investigation report, statements and data relied on. Then reply on facts with your evidence. The Punjab and Haryana High Court in Shaurya Alloys (1 October 2026, as reported) said denial cannot be mechanical and the notice must show material linking the buyer. Check whether that ruling has been appealed before relying heavily on it.
Conclusion
- Write to the officer asking for all material relied on.
- Ask for cross-examination of persons whose statements are used.
- Reply on merits with your purchase evidence.
- Point out the absence of material linking you to fraud.
A Savvy can do this for you
Reply to fake ITC notice when a supplier is found non-existent, Sec 16(2)(c)
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