Background: The case arose from two show cause notices issued by the tax department to the petitioner, raising substantial demands for tax, interest, and penalty under the U.P. Goods and Services Tax Act, 2017. The petitioner requested certain documents referenced in the show cause notices to prepare an appropriate reply. Although the department agreed to upload the documents, they were made available on a different portal, rendering the petitioner unable to access them. As a result, the petitioner could not file a reply, and the department proceeded to pass ex parte assessment orders, raising the total liability to approximately Rs. 159 crore.
Proceedings Before the High Court and Appellate Authority: The petitioner challenged the assessment orders before the Allahabad High Court, which declined to entertain the writ petition on the ground that an alternative statutory remedy of appeal under Section 107 of the U.P. GST Act was available, subject to a pre-deposit of 10% of the principal amount. The petitioner then approached the Appellate Authority, but the appeals were not entertained due to failure to make the required pre-deposit, which amounted to around Rs. 6.7 crore.
Supreme Court’s Reasoning and Directions: Before the Supreme Court, the petitioner, citing financial constraints and procedural irregularities in the assessment process, sought relief from the requirement of full pre-deposit. The Court considered the circumstances, including the petitioner’s inability to access documents and the resultant ex parte nature of the assessment orders. Recognizing the petitioner’s financial difficulties, the Supreme Court directed the petitioner to deposit a reduced amount of Rs. 3.5 crore with the department within two weeks. The department was instructed to acknowledge receipt in writing.
Upon production of the deposit receipt before the Supreme Court Registry, the Court ordered that notice be issued to the respondents, returnable on a specified date. Importantly, the Court directed that no coercive steps be taken by the department pursuant to the assessment orders, provided the petitioner complied with the deposit condition.
Legal Principle: The Supreme Court’s order underscores its equitable jurisdiction to grant relief from statutory pre-deposit requirements in exceptional circumstances, particularly where procedural fairness is in question and financial hardship is demonstrated. The Court balanced the interests of revenue with the petitioner’s right to a fair hearing, ensuring that the challenge to the assessment orders could proceed without immediate risk of coercive recovery.
Outcome: The matter remains pending before the Supreme Court, with further proceedings contingent on the petitioner’s compliance with the deposit direction. The interim protection against coercive recovery provides the petitioner an opportunity to contest the assessment orders on merits.
Case Reported at:
Case Name: Simla Gomti Pan Products Pvt. Ltd. v. Commissioner of State Tax U.P. and Ors.
Case Citation: (2026) taxcode.in 11 SC
