Mawana Sugars Limited has achieved a significant victory in its tax litigation matter, with the Income Tax Department dropping a substantial demand of ₹9.54 crores. The company informed stock exchanges on January 23, 2025, about this favorable development under Regulation 30 of SEBI's Listing Obligations and Disclosure Requirements Regulations, 2015.

Background of the Tax Demand

The original tax controversy began when the Office of the Assistant Commissioner of Income Tax ACIT (OSD), Delhi issued a demand notice of ₹9,54,53,137 under Section 156 of the Income Tax Act, 1961. This demand was initially communicated to the exchanges on August 29, 2025, as part of the company's regulatory disclosure obligations.

Company's Strategic Response

Mawana Sugars adopted a proactive approach to challenge the tax demand by filing an application for rectification under Section 154 of the Income Tax Act, 1961. This provision allows taxpayers to seek correction of apparent errors in tax assessments or demand notices.

Favorable Outcome

The Income Tax Department's response to the rectification application proved highly favorable for the company. Upon examination of Mawana Sugars' contentions, the department accepted the company's position and observed that the error was apparent from the record. This acknowledgment led to the rectification of the error under Section 154 provisions and the complete withdrawal of the ₹9.54 crore demand.

Regulatory Compliance

The company has maintained transparency throughout this process by keeping stakeholders informed about developments in the litigation. The latest update confirms that the proceedings have been resolved in the company's favor, with no financial impact on its operations. The company specifically noted that the matter did not involve any key management personnel, promoters, or ultimate persons in control, and no settlement terms or penalties were involved since the demand was entirely dropped.

Conclusion

This resolution represents a positive development for Mawana Sugars Limited, eliminating a potential financial liability of ₹9.54 crores. The successful challenge of the tax demand through proper legal channels demonstrates the company's commitment to protecting shareholder interests while maintaining compliance with regulatory requirements.

Mawana Sugars has received a significant regulatory approval as the National Company Law Tribunal (NCLT) accepted the initial motion for the merger of Mawana Sugars Ltd and Mawana Foods. This development marks a crucial step forward in the consolidation process between the two entities.

NCLT Approval Details

The tribunal's acceptance of the initial motion represents the first formal regulatory milestone in the merger proceedings. This approval enables the companies to proceed with the next phase of the consolidation process, which involves engaging with key stakeholders.

Upcoming Stakeholder Engagement

Following the NCLT's decision, meetings for shareholders and creditors will be scheduled as part of the standard merger process. These meetings are essential components of the regulatory framework governing corporate mergers and acquisitions in India.

The scheduled meetings will provide shareholders and creditors with the opportunity to review and vote on the proposed merger terms. This stakeholder consultation process is a mandatory requirement under Indian corporate law for merger transactions.

Merger Significance

The consolidation of Mawana Sugars Ltd and Mawana Foods represents a strategic corporate restructuring initiative. The NCLT's acceptance of the initial motion demonstrates that the proposed merger meets the preliminary regulatory requirements for such transactions.

The approval paves the way for the companies to advance through the remaining stages of the merger process, subject to stakeholder approval and final regulatory clearances.