Aarti Drugs Limited announced that the Hon’ble Supreme Court of India has dismissed the Special Leave Petition filed by the GST Department. This decision resolves a significant tax litigation concerning demands for IGST, interest, and penalties amounting to approximately ₹230.70 crores for the financial years 2017-18 to 2021-22. The matter is now disposed of in favor of the company, with no anticipated impact on its financial operations.
Supreme Court Upholds Company’s Position in Tax Dispute
Aarti Drugs Limited has received favorable news from the Hon’ble Supreme Court of India, which has officially dismissed the Special Leave Petition (SLP) filed by the GST Department. This ruling brings a significant tax dispute to a close, with the matter now considered disposed of by the highest court.
Background of the Litigation
The dispute originated from a Show Cause Notice issued to Aarti Drugs concerning alleged contraventions related to Rule 96(10) of the CGST Rule. The notice proposed demands for Integrated Goods and Services Tax (IGST), applicable interest, and penalties totaling approximately ₹230.70 crores. These demands pertained to the financial years 2017-18 to 2021-22.
Subsequently, the CGST & C.Ex. Authority passed an order that included a demand for an erroneous sanctioned IGST refund of ₹20.72 crores under Section 74(9) of the CGST Act, 2017. The order also included an imposition of a penalty of ₹20.72 crores under Section 74(9) of the CGST Act, 2017, read with Section 122(2)(b) of the CGST Act, 2017. While a demand of ₹209.98 crores was dropped, interest demands were also stipulated.
Legal Proceedings and Resolution
In response, Aarti Drugs filed a writ petition at the Hon’ble High Court of Judicature at Bombay, challenging the demand and penalty order. The Hon’ble High Court subsequently passed an order setting aside the order of the CGST & C.Ex. Authority.
The GST Department then challenged the High Court’s order by filing a Special Leave Petition before the Hon’ble Supreme Court of India. With the Supreme Court’s recent dismissal of this SLP, the entire matter has been resolved favorably for Aarti Drugs.
Financial and Operational Impact
The company has stated that there is no impact on its financial, operational, or other activities as the final order passed by the Hon’ble Supreme Court is in favor of Aarti Drugs Limited.
Source: BSE
