Kirloskar Brothers Limited (KBL), a leading pump manufacturing company, has obtained an interim stay from the Andhra Pradesh High Court against recovery proceedings for alleged GST tax arrears amounting to Rs. 15.48 crore. The development comes as a significant relief for the company in its ongoing legal battle with the state tax authorities.

Background of the Case

The tax demand in question relates to an unincorporated joint venture named IVRCL-KBL-MEIL, formed by Kirloskar Brothers Limited in partnership with IVRCL Ltd. and Megha Engineering & Infrastructure Ltd. This joint venture was established for executing a project with the Water Resources Department of Andhra Pradesh.

Legal Proceedings

According to the company's disclosure to the stock exchanges, Kirloskar Brothers had filed a writ petition challenging the demand notice issued by the Assistant Commissioner, State Tax Department, Government of Andhra Pradesh. The petition sought to set aside the impugned assessment order and the accompanying demand notice.

Interim Stay Order

In a favorable turn of events for Kirloskar Brothers, the Andhra Pradesh High Court granted an interim stay against the recovery proceedings. This provides temporary relief from the tax recovery process.

Details of the Tax Demand

The GST tax arrears in question amount to Rs. 15.48 crore for the financial year 2017-18. This demand was made by the Assistant Commissioner (ST), Dwarakanagar Circle, Vishakhapatnam – 1, State Tax Department, Government of Andhra Pradesh. The tax authorities had initially given the company a 7-day window to pay the alleged arrears from the date of receipt of the notice.

Company's Response

Kirloskar Brothers has been proactive in addressing this issue, keeping its stakeholders informed through regular updates to the stock exchanges. The company's actions demonstrate its commitment to transparency and compliance with regulatory requirements.

Implications and Next Steps

While the interim stay provides temporary relief for Kirloskar Brothers, the final outcome of the case remains to be seen. The company will likely continue to pursue legal remedies to resolve the matter definitively.

This development is significant for Kirloskar Brothers and will be closely watched by industry observers and stakeholders. The case also highlights the complexities that can arise in tax matters related to joint ventures in infrastructure projects.

As the legal proceedings unfold, Kirloskar Brothers Limited will need to navigate the challenges while maintaining its operational focus and shareholder confidence. The company's ability to successfully resolve this tax dispute could have important implications for its financial position and reputation in the industry.

Kirloskar Brothers Limited (KBL), a leading pump manufacturing company, has taken legal action against a substantial GST demand notice issued by Andhra Pradesh tax authorities. The company has filed a writ petition with the Andhra Pradesh High Court, contesting a Rs. 15.48 crore tax claim for the financial year 2017-18.

Background of the Dispute

The tax demand is associated with an unincorporated joint venture (JV) formed between IVRCL Ltd., Kirloskar Brothers, and Megha Engineering & Infrastructure Ltd. This JV was established for a project with the Water Resources Department of Andhra Pradesh.

Legal Challenge

KBL received a demand notice from the Assistant Commissioner (ST), Dwarakanagar Circle, Vishakhapatnam – 1, State Tax Department, Government of Andhra Pradesh. The notice required payment of the alleged tax arrears within seven days of receipt.

In response, Kirloskar Brothers filed a writ petition (No. WP/31611/2025) with the Andhra Pradesh High Court. The company is seeking to set aside the impugned assessment order and demand notice, along with an interim stay pending the writ petition.

Financial Implications

The exact financial impact of this litigation remains uncertain at this stage. Kirloskar Brothers has stated that the financial implications cannot be ascertained due to the ongoing legal proceedings. The company has committed to informing the stock exchanges of any developments in this regard.

Company's Stance

Kirloskar Brothers maintains that the tax demand is related to transactions undertaken by the unincorporated Joint Venture, of which it is a partner. The company's decision to challenge the demand in court suggests that it believes there are grounds to contest the tax authorities' claim.

Broader Context

This legal challenge comes at a time when Kirloskar Brothers is also dealing with other significant corporate matters. In a separate development, the company recently announced the appointment of Mr. Harsh Vardhan Shringla as an Independent Director, subject to shareholder approval. This appointment is for a term of five years and is part of the company's efforts to strengthen its board with professionals from diverse backgrounds.

As Kirloskar Brothers navigates these legal and corporate governance challenges, stakeholders will be closely watching the outcomes and their potential impact on the company's operations and financial position.