Novartis India Limited has received a significant procedural development in its ongoing tax dispute, with the Delhi High Court admitting the company's writ petition challenging a DVAT assessment for the assessment year 2013-14.

Court Proceedings and Case Details

The Delhi High Court issued an order dated March 27, 2026, admitting Novartis India's petition in the matter of Novartis India Limited vs. Commissioner of Trade and Taxes (W.P.(C) 3892/2026). The company filed this writ petition to direct the respondents to complete proceedings initiated for FY 2013-14 within the prescribed time.

Financial Implications of the Assessment

The DVAT assessment under challenge involves substantial financial implications for the pharmaceutical company. The original demand raised by the tax authorities includes both primary tax obligations and penalty components.

Potential Outcomes and Impact

The company has outlined two possible scenarios based on the final court decision. In case of a favorable order, the Commissioner of Trade and Taxes would need to follow guidelines and complete proceedings within prescribed timelines, potentially resulting in a refund of ₹54.45 lakh to the company.

Conversely, if the order proves unfavorable, Novartis India states there would be no financial impact as the pre-deposit amount is fully provided for in the company's books. This indicates prudent financial planning and risk management by the pharmaceutical manufacturer.

Regulatory Compliance and Disclosure

The disclosure was made in accordance with Regulation 30 read with Schedule III Para B sub-para 8 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has committed to providing updates to stock exchanges on any further developments in this matter as they occur.

Company Secretary and Compliance Officer Chandni Maru signed the disclosure document, ensuring proper regulatory compliance and transparency with stakeholders regarding this ongoing legal proceeding.

Novartis India Limited has disclosed receiving a significant income tax demand notice totaling ₹10,28,40,780 for Assessment Year 2020-21. The pharmaceutical company made this disclosure under Regulation 30 of SEBI Listing Regulations on March 27, 2026.

Tax Demand Details

The demand notice was issued under Section 156 of the Income-tax Act, 1961, by the Assistant Commissioner of Income-tax, TDS Circle – 2(3). The company received the notice on March 26, 2026, via email, followed by the TDS order on March 27, 2026.

Nature of Allegations

The tax authorities have alleged non-compliance with tax deducted at source (TDS) provisions related to:

• Alleged margin to stockist
• Interest on Micro, Small and Medium Enterprises (MSMEs)

The TDS order also mentions that penalty proceedings under section 271C of the Income-tax Act are being initiated separately.

Company's Response Strategy

Novartis India has outlined its planned course of action in response to the demand:

• Filing an appeal with the appropriate appellate authority
• Applying for a stay of demand
• Continuing to update stock exchanges on further developments

Regulatory Compliance

The disclosure was made in accordance with Regulation 30 read with Schedule III Para B sub-para 8 of the SEBI Listing Regulations, 2015, and Master Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026. Company Secretary and Compliance Officer Chandni Maru signed the disclosure document.

Assessment Period

The demand pertains to Assessment Year 2020-21, covering the financial year ended March 31, 2020. The proceedings were concluded under sections 201(1) and 201(1A) of the Income-tax Act, which deal with TDS compliance and interest on delayed deposits respectively.