The Supreme Court of India has granted a stay on tax recovery proceedings against Tata Steel regarding a disputed Input Tax Credit (ITC) demand. The matter involves a tax and penalty claim of ₹890,52,10,202 each for the financial years 2018-19 to 2020-21. The company has maintained that the ITC was valid and contested the jurisdictional basis of the demand, leading to this legal challenge currently pending before the apex court.
Background of the Tax Dispute
In June 2025, Tata Steel received a demand notice from tax authorities challenging the company’s availing of Input Tax Credit (ITC) for the period between FY2018-19 and FY2020-21. The authorities alleged irregularities in the credit claimed, resulting in a demand for tax of ₹890,52,10,202, along with an equivalent penalty and applicable interest. The company formally disputed these claims, asserting that the credits were compliant with GST laws and noting that some discrepancies were simply timing differences between financial years, which is permitted.
Legal Challenges and Judicial Intervention
Following an adverse order issued in December 2025 that confirmed the full demand without incorporating company submissions, Tata Steel sought legal recourse. The company initially filed a Writ Petition before the High Court of Jharkhand, which was disposed of in April 2026 with directions to approach the appellate authority. Dissatisfied with this outcome, the company escalated the matter to the Supreme Court of India via a Special Leave Petition.
Current Status
In a hearing held on May 19, 2026, the Supreme Court took cognizance of the appeal. Following the issuance of the court order on May 20, 2026, it has been confirmed that the Supreme Court has issued notices to the respondents and granted a stay on all further recovery proceedings related to this demand until the next date of hearing. The company continues to defend its position on both legal jurisdiction and the merits of the tax credit claims.
Source: BSE
