WinSCP does not download the file to calculate the checksum locally. It asks the server to calculate it remotely. But your SFTP server does not support "check-file" SFTP extension.
See https://winscp.net/eng/docs/protocols

If you want to calculate the checksum locally, download the file and use SHA1.ComputeHash:
https://learn.microsoft.com/en-us/dotnet/api/system.security.cryptography.sha1
https://learn.microsoft.com/en-us/dotnet/api/system.security.cryptography.hashalgorithm.computehash

See also https://winscp.net/eng/docs/library_example_verify_file_checksum

I was using WINSCP.net library and when I tried to calculate the checksum value for a file at the sftp server, it can't and throws an exception as operation not supported. I have mentioned the algorithm as sha-1 and the code used is shown below.

There are no problem at sftp server as I can download the files and access them very well.

WINSCP version: 5.7

Have I done anything wrong over there.

Please help me on this and let me know how to fix this.

Thanks in advance.