The Supreme Court has allowed Tata Steel’s appeal against a GST demand of INR 890.52 crore and equal amount penalty relating to alleged irregular availment of input tax credit (ITC), setting aside the show-cause notice issued by the tax authorities as well as the subsequent order confirming the demand.
In an exchange filing, Tata Steel disclosed that the matter relates to a June 13, 2025 demand-cum-show-cause notice issued by the Office of the Commissioner of CGST and Central Excise, Jamshedpur, concerning alleged irregular availment of ITC for financial years 2018-19 to 2020-21. The notice sought recovery of ITC amounting to INR 890.52 crore, along with applicable interest and penalty.
The adjudicating authority subsequently passed an order on December 26, 2025, confirming the entire tax demand of INR 890.52 crore, along with an equal amount as penalty and applicable interest on the tax amount. Tata Steel said it had made detailed submissions on merits and maintained that there had been no excess availment of ITC. The company said the credit related to one financial year but was availed in a subsequent financial year, which it contended was permissible under GST laws. It also challenged the jurisdiction of the notice and raised limitation grounds.
Tata Steel initially approached the Jharkhand High Court, which disposed of its writ petition on April 23, 2026, granting the company liberty to approach the appellate authority.
The company thereafter moved the Supreme Court challenging the High Court order. On May 19, the Supreme Court issued notice to the respondents and stayed further proceedings in the matter.
The Supreme Court heard the company’s appeal on August 19 and pronounced its final judgment on August 25, 2026. It allowed Tata Steel’s appeal and set aside the June 13, 2025 show-cause notice issued under Section 74 of the CGST Act as well as the order-in-original passed by the Additional/Joint Commissioner, CGST & Central Excise, Jamshedpur.
However, the Supreme Court granted liberty to the tax department to initiate appropriate proceedings under Section 74 of the CGST Act, if it considers it appropriate, based on the foundational facts emerging from the notice. Any such proceedings and order would have to be completed before February 28, 2027.
The Supreme Court has allowed Tata Steel’s appeal against a GST demand of INR 890.52 crore and equal amount penalty relating to alleged irregular availment of input tax credit (ITC), setting aside the show-cause notice issued by the tax authorities as well as the subsequent order confirming the demand.
According to Tata Steel’s August 26 stock exchange disclosure, the matter relates to a June 13, 2025 demand-cum-show-cause notice issued by the Office of the Commissioner of CGST and Central Excise, Jamshedpur, concerning alleged irregular availment of ITC for financial years 2018-19 to 2020-21. The notice sought recovery of ITC amounting to Rs 890.52 crore, along with applicable interest and penalty.
The adjudicating authority subsequently passed an order on December 26, 2025, confirming the entire tax demand of INR 890.52 crore, along with an equal amount as penalty and applicable interest on the tax amount. Tata Steel said it had made detailed submissions on merits and maintained that there had been no excess availment of ITC. The company said the credit related to one financial year but was availed in a subsequent financial year, which it contended was permissible under GST laws. It also challenged the jurisdiction of the notice and raised limitation grounds.
Tata Steel initially approached the Jharkhand High Court, which disposed of its writ petition on April 23, 2026, granting the company liberty to approach the appellate authority. The company thereafter moved the Supreme Court challenging the High Court order. On May 19, the Supreme Court issued notice to the respondents and stayed further proceedings in the matter.
The Supreme Court heard the company’s appeal on August 19 and pronounced its final judgment on August 25, 2026. It allowed Tata Steel’s appeal and set aside the June 13, 2025 show-cause notice issued under Section 74 of the CGST Act as well as the order-in-original passed by the Additional/Joint Commissioner, CGST & Central Excise, Jamshedpur.
However, the Supreme Court granted liberty to the tax department to initiate appropriate proceedings under Section 74 of the CGST Act, if it considers it appropriate, based on the foundational facts emerging from the notice. Any such proceedings and order would have to be completed before February 28, 2027.
Consequently, the INR 890.52 crore tax demand, an equivalent penalty and applicable interest currently stand quashed.
