Kallam Textiles has received a GST show cause notice demanding ₹4.98 crore from the Additional Commissioner (S.T.), Vijayawada, Andhra Pradesh. The notice, dated August 27, 2026, pertains to alleged non-payment of tax, interest, and penalty for the financial year 2020-21.

The textile manufacturer, which is currently under the Corporate Insolvency Resolution Process (CIRP), disclosed the receipt of Form GST DRC-01 to the Bombay Stock Exchange on August 28, 2026. The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Regulatory Action Details

The notice was issued under Section 73(1) of the Andhra Pradesh Goods and Services Tax Act, 2017. It cites alleged contraventions related to tax liabilities during FY21. The total demand includes principal tax, accrued interest, and applicable penalties.

Company Response

Kallam Textiles stated that it does not agree with the contents of the show cause notice. The company indicated it would take appropriate legal action in response to the demand. No quantifiable financial impact beyond the stated demand was disclosed in the filing.

What the Numbers Show

The notice arrives while the company is under CIRP, adding a layer of regulatory complexity to its insolvency proceedings. The demand of nearly ₹5 crore represents a significant contingent liability that could affect the resolution plan's feasibility or the final distribution to creditors if upheld.

Kallam Textiles Ltd has been fined ₹1,71,100 by BSE for failing to submit audited financial results for the quarter and financial year ended 31 March 2026 within the prescribed regulatory timeline. The exchange levied the penalty under the SEBI Standard Operating Procedure for alleged non-compliance with Regulation 33 of the SEBI (LODR) Regulations, 2015.

The total penalty includes a basic fine of ₹1,45,000 plus applicable GST of ₹26,100. BSE communicated the levy via an email dated 30 June 2026, referencing the SEBI Master Circular regarding penal actions for non-compliance. The fine structure is calculated at ₹5,000 per day until the date of compliance.

The company attributed the delay in submission to circumstances arising from the ongoing Corporate Insolvency Resolution Process (CIRP). Specific challenges cited include difficulties in collating and reconciling financial information, the completion of statutory audit procedures, and other operational hurdles during the insolvency resolution process.

Prior to receiving the penalty notice, Kallam Textiles Ltd had submitted a request to BSE on 27 May 2026 seeking an extension of time and explaining the reasons for the delay. Following the imposition of the fine, the company stated it is requesting BSE to waive the levied amount.

BSE has directed the company to pay the fine within 15 days from the date of the communication. Failure to remit the payment may result in the exchange initiating action to freeze the entire shareholding of the promoter and other securities held in the promoter's demat account. Additionally, a second consecutive year of non-compliance for Regulation 33 could lead to the company being transferred to the Z group and suspension of trading in its equity shares.