Bannari Amman Sugars Limited faces a financial liability of ₹12.72 crore after the District Collector, Erode, initiated fresh recovery proceedings against its sugar unit located in Alathukombai Village. The proceedings, dated July 1, 2026, direct the recovery of this amount under Section 5 of the Revenue Recovery Act, 1864, towards tax and interest alleged to be payable under the Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003. This development poses a potential financial impact on the company, although it intends to contest the demand legally.

The recovery demand covers the period from June 2003 to March 2016. The company had previously challenged the levy of tax under the Tamil Nadu Consumption or Sale of Electricity Act, 2003, by filing Writ Petition No. 7397 of 2005. The Hon'ble High Court allowed this petition on March 8, 2012, subject to the outcome of other writ petitions challenging amendments to the Act. The Energy Department did not appeal against this order.

However, subsequent writ petitions filed by other parties challenging the amendments were dismissed, leading to Special Leave Petitions and review petitions currently pending before the Hon'ble Supreme Court. In 2019, the then District Collector had withdrawn earlier revenue recovery proceedings considering the pendency of these cases. The present administration has now revived the recovery effort for the specified amount.

Legal Background and Company Response

The company maintains that the recovery proceedings should be deferred until the Supreme Court decides on the pending Special Leave Petitions. It argues that the initiation of fresh recovery ignores the legal context established by the High Court's earlier order and the ongoing litigation.

Bannari Amman Sugars is currently consulting its legal counsel to evaluate appropriate remedies. The company stated it believes it has valid legal grounds to challenge the proceedings and is considering filing an appeal before the appropriate government authority or initiating proceedings in the High Court or Supreme Court to protect its interests.

Key Details of the Recovery Proceedings

Bannari Amman Sugars has disclosed a cybersecurity incident at its distillery unit located in Tamil Nadu. The company reported that the issue occurred on June 27 and was resolved in a timely manner, with no disruption to its regular business operations.

Cybersecurity Incident Details

The following key details have been reported regarding the incident:

Operational Status Unaffected

Bannari Amman Sugars confirmed that despite the cybersecurity issue, the company's normal operations remained unaffected. The swift resolution of the incident underscores the company's ability to address technical disruptions without allowing them to impact day-to-day business continuity at the Tamil Nadu distillery unit.