The Hon’ble Supreme Court of India in M/s Simla Gomti Pan Products Pvt. Ltd. v. Commissioner of State Tax, U.P. & Ors. [SLP (C) No. 5266 of 2026, order dated March 20, 2026] granted interim protection to the Petitioner by directing deposit of Rs. 3.50 crore within two weeks, and ordered that no coercive steps shall be taken pursuant to the two assessment orders during the meantime. The Court recorded the Petitioner’s case that the relied-upon documents had been uploaded on a different portal, due to which the Petitioner could not access them and could not file an effective reply, and noted the submission that the assessment orders were therefore ex parte in nature. The Court also noted that the total liability under the assessment orders, inclusive of interest and penalty, was around Rs. 159 crore, while the principal liability was stated to be around Rs. 67 crore, for which the statutory pre-deposit would work out to about Rs. 6.70 crore.
This matter arose after the Hon’ble High Court of Judicature at Allahabad (Lucknow Bench) in M/s Simla Gomti Pan Products Pvt. Ltd. v. Commissioner of State Tax U.P. & Ors. [Writ Tax No. 533 of 2025 dated November 03, 2025] dismissed the Petitioner’s writ petition primarily on the ground of availability of a statutory alternate remedy under Section 107 of the U.P. Goods and Services Tax Act, 2017 (hereinafter “U.P. GST Act / the Act”), and further held that the Petitioner was estopped from raising the relief of pre-deposit exemption by virtue of the principle of constructive res judicata and the Henderson Principle, having failed to seek such relief in successive writ petitions.
Facts:
The Petitioner, M/s Simla Gomti Pan Products Pvt. Ltd., is registered under the U.P. GST Act. As recorded by the Supreme Court, one show cause notice raised a demand of Rs. 119,98,39,204/- towards tax, interest and penalty, while the second show cause notice involved a demand of Rs. 17,25,49,263/- towards principal tax liability. The litigation arose from proceedings initiated under Section 74 of the U.P. GST Act. Since the Supreme Court order itself notes these figures in a compressed manner, it is advisable to avoid over-explaining the breakup unless it is independently verified from the underlying records.
The Petitioner asserted that it had sought copies of the documents referred to in the two show cause notices, including the SIB report. According to the Petitioner’s case as recorded by the Supreme Court, the department informed it that the documents would be uploaded on the portal by 31.05.2024, and that replies could be filed by 10.06.2024. The Petitioner further contended that although the documents were uploaded, they were uploaded on a different portal, rendering them inaccessible to the Petitioner. As a result, no effective reply could be filed, and two final assessment orders came to be passed. The Supreme Court noted that the total liability under those assessment orders with interest and penalty came to around Rs. 159 crore, while the principal amount was around Rs. 67 crore.
The Petitioner first challenged the assessment orders before the Allahabad High Court in Writ Tax No. 220 of 2024, but was relegated to the statutory appellate remedy under Section 107 of the U.P. GST Act. The challenge to that order before the Supreme Court in SLP No. 25574 of 2024 was also unsuccessful. Thereafter, the Petitioner preferred appeals without making the statutory pre-deposit, while pleading financial incapacity and seizure of bank accounts. As noticed by the Allahabad High Court, the Appellate Authority had dismissed the appeals, and the later controversy centered on whether, after remand on the limitation aspect, the appeals could still be rejected for non-compliance with Section 107(6)(b).
The Petitioner thereafter filed Writ Tax No. 330 of 2024, which was allowed by a Coordinate Bench on April 10, 2025. That Bench quashed the earlier appellate orders insofar as the benefit of Section 14 of the Limitation Act had not been considered, and remanded the matter to the Appellate Authority for fresh decision in light of M.P. Steel Corporation [(2015) 7 SCC 58] and Suryachakra Power Corporation Limited [(2016) 16 SCC 152]. However, as later noted by the Allahabad High Court, the remand order was confined to the issue of limitation and did not grant any exemption from the statutory pre-deposit. The Appellate Authority thereafter again declined to entertain the appeals for want of compliance with Section 107(6)(b), which led to the filing of Writ Tax No. 533 of 2025, dismissed on November 3, 2025.
Issues:
- Whether the two assessment orders dated June 12, 2024 passed under Section 74 of the U.P. GST Act are liable to be set aside on the ground that they were passed ex-parte, without affording the Petitioner a reasonable opportunity to reply to the show cause notices, particularly when the relied-upon documents (SIB report) were uploaded on an incorrect portal section rendering them inaccessible to the Petitioner?
- Whether the mandatory pre-deposit requirement of 10% of the principal tax amount under Section 107(6)(b) of the U.P. GST Act can be enforced strictly against an assessee who demonstrates financial incapacity and whose bank accounts have been seized by the department, thereby effectively foreclosing the statutory remedy of appeal?
- Whether the Petitioner’s successive writ petitions seeking exemption from the pre-deposit are barred by the doctrine of constructive res judicata and the Henderson Principle, on the ground that such relief was available but was never specifically sought in the earlier writ petitions or before the Appellate Authority?
- Whether the Hon’ble Supreme Court, in exercise of its jurisdiction under Article 136 of the Constitution of India, may grant interim protection against coercive recovery by directing deposit of an amount lower than the statutory pre-deposit ordinarily required for maintaining an appeal, pending consideration of the Special Leave Petition?
Allahabad High Court Held:
The Hon’ble Allahabad High Court (Lucknow Bench) in Writ Tax No. 533 of 2025 held as under:
- Observed that, the Petitioner had been fully aware throughout the litigation that making a 10% pre-deposit was a mandatory statutory prerequisite for maintaining an appeal under Section 107(6)(b) of the U.P. GST Act, yet consistently failed to seek any specific relief of exemption from such pre-deposit at any stage — neither before the Division Bench in Writ Tax No. 220 of 2024, nor before the Hon’ble Supreme Court during the pendency of SLP No. 25574 of 2024, nor in Writ Tax No. 330 of 2024 before the Coordinate Bench, nor by moving a separate application before the Appellate Authority.
- Noted that, the direction issued by the Coordinate Bench on April 10, 2025 in Writ Tax No. 330 of 2024 was confined exclusively to the issue of limitation and the applicability of Section 14 of the Limitation Act; it contained no direction whatsoever exempting the Petitioner from the mandatory pre-deposit obligation under Section 107(6)(b) of the U.P. GST Act. The Appellate Authority therefore correctly dismissed the appeal for non-compliance of the pre-deposit requirement.
- Held that, the successive writ petitions filed by the Petitioner were a clear attempt to circumvent the statutory pre-deposit obligation under the guise of seeking alternative remedies. The principle of constructive res judicata and the Henderson Principle (as explained by the Supreme Court in Celir LLP v. Sumati Prasad Bafna and others, 2024 SCC OnLine SC 3727 and Devilal Modi v. Sales Tax Officer, Ratlam, AIR 1965 SC 1150) squarely applied, inasmuch as the relief sought was always available to the Petitioner but was deliberately omitted in piecemeal litigation. Filing successive writ petitions raising issues that could and should have been raised earlier amounts to abuse of the process of court.
- Directed that, the writ petition bearing Writ Tax No. 533 of 2025 be dismissed as misconceived, with no order as to costs.
Supreme Court of India Held:
The Hon’ble Supreme Court of India in SLP (C) No. 5266 of 2026 dated March 20, 2026 held as under:
- Observed that, according to the Petitioner, the relied-upon documents had been uploaded on a different portal, due to which the Petitioner could not access them and could not file an appropriate reply to the two show cause notices; in that backdrop, senior counsel for the Petitioner submitted that the two assessment orders could be said to be ex parte in nature because the Petitioner had no effective opportunity to participate in the assessment proceedings.
- Noted that, the total demand raised by the department including tax, interest and penalty amounts to approximately Rs. 159 crore, with the principal tax liability being approximately Rs. 67 crore. The mandatory pre-deposit of 10% for filing a statutory appeal would accordingly amount to approximately Rs. 6.70 crore. The Petitioner had demonstrated financial constraints in depositing the said amount.
- Directed that, the Petitioner shall deposit Rs. 3.50 crore with the concerned department within two weeks from the date of the order. Upon production of the receipt before the Registry, notice shall be issued to the respondents, returnable on 11.05.2026. Since the Petitioner agreed to deposit the said amount within the stipulated time, no coercive steps shall be taken pursuant to the two assessment orders in the meantime.
Our Comments:
Relevant Statutory Provisions:
- Section 74 of the U.P. GST Act, 2017 (pari materia with Section 74 of the Central GST Act, 2017) — empowers the proper officer to determine tax not paid, short paid, erroneously refunded, or input tax credit wrongly availed or utilised, where such acts are attributable to fraud, wilful misstatement or suppression of facts. The extended period of limitation (five years) applies under this provision. The invocation of Section 74 requires the SCN to specifically allege fraud/wilful misstatement/suppression; a mere allegation without factual foundation renders the proceedings jurisdictionally infirm. As rightly argued before the Coordinate Bench, the SCNs in this case allegedly lacked any specific allegation justifying the invocation of the extended period.
- Section 107(6)(b) of the U.P. GST Act, 2017 (pari materia with Section 107(6) of the CGST Act, 2017) — mandates that a taxpayer filing an appeal before the Appellate Authority shall, as a condition for admission of the appeal, deposit 10% of the remaining amount of tax in dispute (in addition to the admitted liability and pre-deposit already paid). This pre-deposit acts as a jurisdictional precondition, and the Appellate Authority has no discretion to waive or reduce the same. Non-compliance renders the appeal not maintainable, not merely defective.
Principles of Natural Justice and Ex-Parte Orders: Where an assessee is unable to access documents relied upon in the show cause notice and is thereby deprived of an effective opportunity to file a reply, the resulting adjudication may be open to challenge on grounds of violation of natural justice. In the present case, the Supreme Court took note of the Petitioner’s case that the documents were uploaded on a different portal and that, for this reason, no effective reply could be filed before the assessment orders came to be passed. It is therefore safer to state that non-supply or inaccessibility of relied-upon documents can vitiate adjudication, rather than to make a broader proposition unsupported by the text of these two orders alone.
Significance of the Supreme Court’s Interim Order: The order is significant because, at the interim stage, the Supreme Court protected the Petitioner from coercive recovery upon deposit of Rs. 3.50 crore, even though the statutory pre-deposit for filing the appeal would ordinarily be around Rs. 6.70 crore on the principal liability of about Rs. 67 crore. The order indicates that the Court found it appropriate, at least prima facie, to balance the Petitioner’s grievance of lack of effective opportunity in the assessment proceedings with the revenue’s interest by imposing a deposit condition. However, it is better not to attribute this interim arrangement specifically to Article 142, because the order itself does not expressly invoke Article 142.
Allahabad High Court’s Holding on Constructive Res Judicata: The Allahabad High Court held that the Petitioner had been aware throughout that the statutory appeal required a 10% pre-deposit, yet no specific relief seeking exemption from such pre-deposit had been pressed either in the earlier writ proceedings, before the Supreme Court in the earlier SLP, or in Writ Tax No. 330 of 2024. On that basis, the Court held that the subsequent writ petition was barred by the principles of constructive res judicata / Henderson principle, and treated the successive litigation as an attempt to avoid the statutory pre-deposit. A safer editorial formulation is to say that this is the High Court’s reasoning in the case, rather than to independently certify it as “legally sound” in absolute terms.
Takeaway for Taxpayers: Where an assessee is unable to access relied-upon documents and apprehends that assessment may proceed without an effective opportunity of reply, it is important to contemporaneously preserve proof of requests for documents and of portal-access difficulties. If appellate proceedings are later contemplated, all material reliefs and grounds should be raised at the earliest available stage, since the Allahabad High Court in this case treated the omission to specifically seek relief regarding pre-deposit in earlier rounds as attracting constructive res judicata. The Supreme Court’s interim order also shows that, in an appropriate case, interim protection may be granted on deposit of a lesser amount, but that conclusion should be stated as case-specific and interim in nature.
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