Setback to Patanjali Ayurved, Allahabad High Court dismisses Rs.273.5 crore GST penalty appeal
The Allahabad High Court rejected Patanjali Ayurved Limited's plea challenging the Rs.273.50 crore goods and service tax (GST) penalty, PTI reported on Tuesday, 3 June 2025.
The high court bench comprising Justice Shekhar B Saraf and Justice Vipin Chandra Dixit dismissed Patanjali's argument that such cases are made up of criminal liability and can be imposed only after a criminal trial.
“After detailed analysis, it is clear that the proceeding under Section 122 of the CGST Act is to be adjudicated by the adjudicating officer and is not required to undergo prosecution,” said the judicial bench, as per the report.
The court observed that the tax authorities can impose penalties on firms under Section 122 of the GST Act through civil proceedings without requiring criminal court trials.
Patanjali Ayurved's sister concern, Patanjali Foods, even though a separate entity, is listed in the Indian stock market. Shares of Patanjali Foods were trading 0.44 per cent lower at Rs.1,690.20 during Tuesday's stock market session, compared to Rs.1,697.65 in the previous market close.
Patanjali Ayurved gets GST notice
The Directorate General of GST Intelligence (DGGI), Ghaziabad, issued a show cause notice to Patanjali Ayurved on 19 April 2024 proposing a penalty of Rs.273.51 crore under various sections of the GST Act, reported the news agency.
Later, the DGGI dropped tax demands under Section 74 in an order dated 10 January 2025. The department reportedly found that the quantities sold for all commodities were more than those purchased from the suppliers.
