ARCL Organics Ltd has received a show cause notice of ₹5.05 crore from the GST Authority, West Bengal, pertaining to Financial Year 2022-23. The notice alleges non-payment of tax due to the classification of a specific product as non-taxable.

The demand comprises ₹2.78 crore in tax, ₹2.00 crore in interest, and ₹0.28 crore in penalty. The dispute centers on the classification of "Aqua Strong Bond," an additive binder used by the company. The GST Authority contends that the product should be classified under HSN Code 3906 rather than HSN Code 2309, which would render it taxable.

Details of the Demand

The notice was issued under Section 73 of the WBGST/CGST/IGST Acts. The company maintains that its classification is appropriate and disputes the proposed demand. ARCL Organics stated it is examining the notice and will submit a response within the prescribed time through legal channels.

Regulatory Context and Impact

The intimation was filed with BSE Limited under Regulation 30 read with Clause 20 of Para A of Part A of Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company clarified that the proposed demand is not a final determination of liability. As of now, there is no immediate impact on the financial or operational activities of the company owing to this show cause notice.

What the Numbers Show

The proposed penalty of ₹27.79 lakh is exactly 10% of the disputed tax amount of ₹2.78 crore, which aligns with standard statutory provisions for such defaults if not paid within the specified period. Notably, the interest component of ₹1.99 crore is nearly 72% of the principal tax demand, indicating that the majority of the total liability stems from the time value of money accrued since the FY23 period rather than the base tax evasion itself.

Shareholders of ARCL Organics Ltd approved remuneration increases for three key directors and reappointed Mukesh Mundhra at the company’s 34th annual general meeting held on September 19, 2026. The meeting also adopted the audited financial statements for FY26.

The Kolkata-based chemical manufacturer conducted the meeting through video conferencing and other audio-visual means. Fifty-six members, representing 31,61,699 equity shares, participated in the proceedings. Shareholders voted in favor of all six resolutions proposed, including ordinary business items and special resolutions regarding executive compensation.

Governance Updates

The board reappointed Mr. Mukesh Mundhra as a director following his retirement by rotation under Section 152(6) of the Companies Act, 2013. He was eligible for re-appointment and offered himself for the role.

Additionally, shareholders ratified the remuneration of cost auditors for the financial year 2026-27. This resolution was passed as an ordinary resolution.

Executive Compensation

Three special resolutions sought shareholder approval for increased remuneration for senior leadership:

• Mr. Suraj Ratan Mundhra, Chairman and Managing Director
• Mr. Rajesh Mundhra, Whole Time Director
• Mr. Mukesh Mundhra, Whole Time Director

All three proposals were passed by the requisite majority. The specific monetary values of the remuneration increases were not disclosed in the meeting outcome report.

Voting Results

Remote e-voting was facilitated by MUFG Intime India Private Limited. The voting period ran from September 16 to September 18, 2026. KSN & Company served as the scrutinizer for the process.

A total of 27 members participated in the e-voting process. No votes were cast against any resolution, and no invalid votes were recorded. The unanimous support indicates strong alignment between the board and shareholders on governance and compensation matters.