Filatex India has emerged victorious in a significant legal battle concerning GST refund claims. The Gujarat High Court has quashed show cause notices issued by the Joint Commissioner of CGST, which sought to recover GST refund claims totaling Rs. 166.79 crores from the company.

Key Highlights

• The Gujarat High Court's judgment favors Filatex India, nullifying two show cause notices.
• The disputed amount of Rs. 166.79 crores relates to GST refund claims for inverted duty structure.
• The period under scrutiny spans from January 2018 to February 2022.

Details of the Case

The case involved two separate show cause notices:

Filatex India had proactively filed writ petitions with the Gujarat High Court against both notices. The court had previously granted interim stays on these matters, demonstrating the company's commitment to resolving the issue through proper legal channels.

Resolution and Impact

The Gujarat High Court's decision to quash the show cause notices marks a significant victory for Filatex India. This ruling effectively puts an end to the potential recovery of Rs. 166.79 crores in GST refunds, which could have had a substantial impact on the company's financials.

Timeline of Events

• The Gujarat High Court issued its judgment quashing the show cause notices.
• Filatex India received certified copies of the favorable judgment at 11:30 AM.

This resolution provides clarity and closure to a prolonged legal matter, potentially allowing Filatex India to move forward with greater financial certainty. The company's success in this litigation may also set a precedent for similar cases in the textile industry regarding GST refunds on inverted duty structures.

Investors and stakeholders of Filatex India can view this development as a positive outcome, eliminating a significant financial risk that had been looming over the company. The resolution of this matter may contribute to improved investor confidence and potentially impact the company's financial planning and operations going forward.

As always, investors are advised to consider this information alongside other financial and operational aspects of the company when making investment decisions.

Filatex India Limited has made a strategic investment in its wholly owned subsidiary, Texfil Private Limited, through a rights issue. The company disclosed under Regulation 30 of SEBI Listing Regulations that it acquired additional equity shares of Texfil for Rs 15.00 crore on January 16, 2026.

Investment Transaction Details

The latest investment represents a significant capital infusion into the subsidiary's operations:

Fund Utilization Strategy

The investment proceeds will be deployed across three key areas to strengthen Texfil's operational capabilities:

Polyester Textiles Recycling Project: A significant portion of the funds will finance the ongoing recycling project, demonstrating the company's commitment to sustainable textile production practices.

Loan Repayment: The investment will enable Texfil to repay existing loans from Filatex India Limited, improving the subsidiary's financial structure and reducing inter-company obligations.

Working Capital Enhancement: Additional funds will support Texfil's working capital requirements, potentially boosting operational efficiency and growth prospects.

Regulatory and Transaction Framework

As disclosed in the regulatory filing, this transaction constitutes a related party transaction conducted on an arm's length basis. The company confirmed that no promoter, promoter group, or other group companies have any interest in this transaction. Additionally, no governmental or regulatory approvals were required for this acquisition.

This strategic move reinforces Filatex India's commitment to strengthening its subsidiary's financial position while focusing on sustainable business practices through the recycling project. The investment is expected to enhance Texfil's operational capabilities and contribute to the group's consolidated performance in upcoming quarters.