Background and Chronology of Events

  • On June 24, 2025, Tata Steel Limited received a Demand cum Show Cause Notice dated June 13, 2025 from the Office of the Commissioner of CGST and Central Excise, Jamshedpur.
  • The notice alleged irregular availing of Input Tax Credit (ITC) amounting to ₹890,52,10,202 (₹890.52 crore) for the period FY2018-19 through FY2020-21.
  • The notice was issued under Sections 16 and 41 of the Central Goods and Services Tax Act, 2017, Jharkhand Goods and Services Tax Act, 2017, and Integrated Goods and Services Tax Act, 2017.
  • The company made detailed submissions on merits before the Adjudicating Authority (Additional/Joint Commissioner, CGST & Central Excise, Jamshedpur).
  • On December 27, 2025, the company received an Order dated December 26, 2025 from the Adjudicating Authority confirming:
  • Tax demand: ₹890,52,10,202
  • Penalty: ₹890,52,10,202
  • Applicable interest on the total tax amount
  • The company maintained that there was no excess ITC availed, claiming the tax credit pertained to one financial year but was availed in subsequent financial year as permitted under GST laws.
  • The company also challenged the notice on jurisdictional grounds and limitation.
  • On February 24, 2026, the company filed a Writ Petition before the Hon'ble High Court of Jharkhand.
  • The High Court disposed of the petition on April 23, 2026, granting liberty to approach the Appellate Authority.
  • The company filed a Special Leave Petition before the Hon'ble Supreme Court of India challenging the High Court order.
  • On May 19, 2026, the Supreme Court issued notice to respondents and stayed all further proceedings.

Current Status and Outcome

  • The Hon'ble Supreme Court heard the SLP on August 19, 2026 and pronounced its final judgment on August 25, 2026.
  • The Supreme Court:

(i) Allowed the appeal filed by the company

(ii) Set aside the Show Cause Notice dated June 13, 2025 issued under Section 74 of the CGST Act

(iii) Set aside the Order-in-Original dated December 26, 2025 issued by the Additional/Joint Commissioner, CGST & Central Excise, Jamshedpur

(iv) Granted liberty to the Tax Department to initiate appropriate proceedings under Section 74 of the CGST Act, if thought fit, with foundational facts coming from the notice itself, with order to be passed before February 28, 2027

  • Accordingly, the total demand of ₹1,781,04,20,404 (comprising tax demand of ₹890.52 crore and penalty of ₹890.52 crore) plus applicable interest stands quashed.