Court Quashes Rs 5.09 Cr SIPCOT Demand

Authority: Supreme Court of India, Criminal Appellate Jurisdiction

Order Date: 18 September 2026

Case Overview

• Parties: M/S A.S. Carriers Pvt. Ltd (appellant) vs State Industries Promotion Corporation of Tamil Nadu Ltd (respondent, SIPCOT).
• Origin: Special Leave to Appeal (SLP) Nos. 10758‑10759/2026 challenging High Court of Madras judgments (Writ Appeal Nos. 2043/2023 and 920/2023) that upheld a demand of Rs 5,09,52,037 plus 12.36 % service tax.
• Background: Original demand dated 28‑04‑2014 required payment within 90 days; Single Judge had quashed it citing lack of clause in lease deed; Division Bench reversed, invoking Clause 39 and public trust doctrine, deeming appellant liable for sub‑leasing charges.
• Supreme Court observations: The appellant was not heard before the demand was issued; the demand therefore cannot stand; respondent must issue a fresh show‑cause notice before any further action.

Final Outcome

• The Supreme Court set aside both the High Court order and the demand of Rs 5.09 crore.
• Appeals are allowed; all issues are left open for further determination.
• Respondent is granted liberty to issue a fresh show‑cause notice prior to raising any new demand.
• Any pending applications are disposed of.

Topics: Sub‑leasing charges, Industrial park lease dispute, Court judgment