Repeated Attempts to Evade Mandatory GST Pre-Deposit: Allahabad HC Dismisses Writ Petition

The Allahabad High Court, Lucknow Bench has dismissed a writ petition observing that the company repeatedly attempted to bypass the statutory requirement of depositing 10% of the disputed GST demand before filing an appeal. The bench of Justice Jaspreet Singh has observed that the petitioner attempted to invoke the writ jurisdiction multiple times to avoid the mandatory pre-deposit mandated under Section 107(6)(b) of the GST Act. The dispute relates to assessment orders dated 12 June 2024 issued under Section 74 of the Uttar Pradesh GST Act for Assessment Years 2021–22 and 2022–23. The company alleged that the orders were passed ex parte and without providing it with the SIB (Special Investigation Branch) report, which formed the basis of the demand. The company initially approached the High Court through Writ Tax No. 220 of 2024, which was dismissed on 4 September 2024 on grounds of alternate statutory remedy. The Court granted liberty to file an appeal within 10 days. The company then filed an SLP before the Supreme Court, which was dismissed on 4 November 2024. After dismissal of the SLP, the petitioner filed an appeal on 6 November 2024 before the Appellate Authority but did not deposit the mandatory 10% of the disputed tax. Instead, the petitioner asserted lack of funds, frozen bank accounts, and business closure as reasons for non-payment. These grounds were recorded in the delay-condonation application and statement of facts filed with the appeal. The Appellate Authority dismissed the appeal for limitation and non-compliance with Section 107(6)(b). The company again approached the High Court through Writ Tax No. 330 of 2024, arguing that the period spent litigating before the High Court and Supreme Court should be excluded under Section 14 of the Limitation Act. On 10 April 2025, a Coordinate Bench allowed that writ and remanded the matter to the Appellate Authority only to reconsider limitation, specifically directing it to apply the principles laid down in M.P. Steel Corporation and Suryachakra Power Corporation. Notably, the writ did not seek any relief regarding exemption from the mandatory pre-deposit, nor did the Court grant any such relief. Upon reconsideration, the Appellate Authority again dismissed the appeal—this time solely for non-compliance with Section 107(6)(b), i.e., failure to make the 10% pre-deposit. This led to the present petition (Writ Tax No. 533 of 2025), where the company once again sought to challenge both the original order and the appellate rejection. The Court noted that the petitioner was fully aware of the pre-deposit requirement from the very beginning and had used writ petitions to avoid it. The Court emphasized that both before the Division Bench and the Supreme Court, the petitioner had attempted to obtain relief without depositing 10% of the disputed tax. The Court invoked the Henderson Principle and the doctrine of constructive res judicata, holding that issues which could have been raised earlier (such as exemption from pre-deposit) cannot be litigated through successive writ petitions. Despite knowing that the appeal had been rejected for non-payment of the pre-deposit, the petitioner did not seek exemption from this requirement in earlier proceedings. The Court held that such piecemeal litigation is barred. The Court held that the Appellate Authority acted correctly in dismissing the appeal for non-compliance with Section 107(6)(b). Since no court had granted relief from the pre-deposit requirement, the appeal was incomplete and invalid. Concluding that the petition was “misconceived” and part of a strategy to avoid statutory obligations, the Court dismissed it without costs. Case Details Case Title: M/S Simla Gomti Pan Products Pvt. Ltd. Versus Commissioner of State Tax U.P. Commissioners Case No.: WRIT TAX No. - 533 of 2025 Date: 03/11/2025 Counsel For Petitioner: Pradeep Agrawal Counsel For Respondent: C.S.C. Click Here To Read Order Read More: Gauhati HC Questions Constitutional Validity Of Restricting ITC Through State Incentive Schemes, Suspends SCN Against Patanjali Foods

Repeated Attempts to Evade Mandatory GST Pre-Deposit: Allahabad HC Dismisses Writ Petition

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