SC Grants Relief in Rs. 159 Cr GST Demand Case, Allows Reduced Pre-Deposit

The petitioner was issued two show cause notices by the GST department proposing substantial tax demands exceeding Rs. 119 crore and Rs. 17 crore respectively. The petitioner sought access to relied upon documents to file a proper reply, which the department claimed were uploaded on a portal. However, according to the petitioner, the documents were uploaded on an inaccessible portal, preventing effective participation in the proceedings.

The department proceeded to pass ex parte assessment orders raising a total liability of approximately Rs. 159 crore including tax, interest, and penalty. The petitioner challenged the orders before the High Court, which declined to entertain the writ petition on the ground of the availability of an alternative remedy under Section 107 of the GST Act, requiring a 10% pre-deposit. The appellate authority also refused to entertain the appeal due to non-payment of the pre-deposit, leading the petitioner to approach the Supreme Court.

Main Issue: Whether relief can be granted where a statutory appeal is not entertained due to the inability to meet the pre-deposit, especially when assessment orders are alleged to be ex parte.

SC’s Order: The Supreme Court granted interim relief to the petitioner by directing a deposit of Rs. 3.50 crore instead of the statutory 10% pre-deposit of approximately Rs. 6.70 crore. The Court took note of the petitioner’s contention that it was denied a fair opportunity due to non-access to crucial documents and the ex parte nature of the assessment.

Upon deposit of the directed amount within two weeks, the Court ordered issuance of notice and restrained the department from taking coercive steps pursuant to the impugned assessment orders. The matter has been kept pending for further consideration.

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