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Informist, Thursday, Aug. 14, 2025

NEW DELHI – The Supreme Court on Thursday stayed the adjudication on the show-cause notice that proposed to levy a penalty of INR 2.7 billion against Patanjali Ayurved Ltd. under Section 122 (1), clause (ii) and (vii) of the Central Goods and Service Tax, Act 2017. 

The apex court issued a notice to the Centre and the Directorate General of Goods and Services Tax Intelligence on Patanjali Ayurved's plea against an Allahabad High Court order. In May, the high court had refused to quash the GST department's show-cause notice against Patanjali Ayurved, the parent company of Patanjali Foods Ltd.

The case has its genesis in a probe conducted against various companies, including the three units of Patanjali Ayurved for alleged irregularities in transactions, which led to the issuance of the show-cause notice in 2024. The tax department said Patanjali Ayurved's three units had high input tax credit utilisation but no income tax credentials.

Further, the tax department said Patanjali Ayurved, acting as the "main person", was involved in circular trading of tax invoices without any supply of goods. In 2025, the tax department dropped the tax demand against Patanjali Ayurved in the notice, though it proceeded on the penalty part.  End

Reported by Surya Tripathi

Edited by Avishek Dutta

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