Supreme Court Directs ₹3.5 Cr Deposit Against ₹159 Cr GST Assessment, Bars Coercive Recovery Till Appeal Hearing [Read Judgement]

In a recent ruling, the Supreme Court of India directed the deposit of ₹3.5 crore as a condition for interim relief in a high-stakes tax dispute, where the company faces a total liability of approximately ₹159 crore.

The dispute arose after the Uttar Pradesh tax department issued two show cause notices against the company, raising demands of ₹119.98 crore and ₹17.25 crore, respectively, later culminating in assessment orders fixing liability at around ₹67 crore in principal tax. With interest and penalty, the total exposure reached ₹159 crore.

Senior counsel Mukul Rohatgi, appearing on th behalf of the petitioner, Simla Gomti Pan Products Pvt Ltd, contended that the denial of access deprived the company of an opportunity to respond, rendering the orders invalid. Also stated that the assessment orders were passed ex parte, as the company was unable to access crucial documents uploaded by the department on a different portal.

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The Allahabad High Court had earlier declined to entertain the company’s writ petition, citing the availability of a statutory appeal under Section 107 of the U.P. Goods andServices Tax Act, 2017, which requires a 10% pre-deposit of the disputed tax amount (about ₹6.7 crore).

Also, the appellate authority subsequently refused to hear the company’s appeal due to non-payment of this pre-deposit.

After hearing the submissions, the Supreme Court bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan ordered a reduced deposit of ₹3.5 crore within two weeks. The Court further directed that no coercive steps be taken against the company pursuant to the assessment orders once the deposit is made.

The court observed that “We direct the petitioner to deposit an amount of Rs.3.50 crore with the concerned department within a period of two weeks from today. The department shall acknowledge the receipt of the said amount in writing.”

It was also directed that the appellant deposit ₹3.5 crore within two weeks. Once the deposit receipt is filed with the Registry, notice will be issued to the respondents, returnable on May 11, 2026.

Until then, the Court ordered that no coercive recovery steps be taken against the company under the two assessment orders.

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