Mawana sugars Limited has achieved a favorable outcome in its ongoing tax litigation, with authorities cancelling a ₹1,22,415 SGST liability that was imposed on the company's Nanglamal Sugar Complex unit.

Background of the Tax Dispute

The litigation originated from a notice issued by the Office-Joint Commissioner (Corporate Cell) S.G.S.T. Office, Meerut, Uttar Pradesh, which had been communicated to exchanges on August 27, 2025. The tax authorities had alleged that the company's Nanglamal Sugar Complex unit generated double e-way bills on invoices across three separate cases, leading to the imposition of the liability.

Legal Challenge and Resolution

In response to the SGST liability, Mawana Sugars filed a comprehensive representation before the Office of the Joint Commissioner of (Corporate Cell) S.G.S.T. Office in Meerut, Uttar Pradesh. The company's legal strategy proved successful as the authorities reviewed and accepted their arguments.

Official Outcome

After careful consideration of the representation filed by Mawana Sugars, the Hon'ble Joint Commissioner decided to cancel the entire SGST liability. This decision eliminates the financial burden that the company was facing due to the alleged double e-way bill generation issue.

Regulatory Compliance

The company has maintained transparency throughout the process by providing regular updates to stock exchanges under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The resolution of this matter demonstrates the company's commitment to addressing regulatory challenges through proper legal channels.

This favorable outcome provides financial relief to Mawana Sugars and resolves the uncertainty surrounding the tax liability that had been pending since the original notice was issued in August 2025.

Mawana Sugars Limited has informed stock exchanges about receiving a penalty notice from the Uttar Pradesh excise department regarding its distillery operations. The company disclosed this development under SEBI listing regulations on February 23, 2026.

Penalty Details and Financial Impact

The Nanglamal Sugar Complex, a unit of Mawana Sugars, received communication from the Office of Additional Excise Commissioner (Administration), U.P. regarding penalty imposition for alleged non-compliance in alcohol production standards.

Nature of Alleged Violation

The penalty stems from allegations that the recovery percentage of alcohol from molasses based on fermentable sugar fell below prescribed regulatory limits at the Nanglamal Sugar Complex's distillery division in Meerut. This represents a compliance issue related to production efficiency standards mandated by excise authorities.

Regulatory Action Breakdown

The excise department has taken a two-pronged approach to the penalty:

• Direct Penalty: Rs 45,000 imposed specifically for low recovery cases
• Security Deduction: Additional Rs 45,000 recovered from the company's performance security amount
• Total Impact: Rs 90,000 affecting the company's financials

Company Response and Next Steps

According to the disclosure, Mawana Sugars has not yet taken specific action regarding this communication. The company filed this disclosure in compliance with SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, ensuring transparency with stakeholders about regulatory communications that could impact operations.

The penalty relates to historical operations during 2019-22, indicating this is a retrospective assessment by excise authorities. The relatively modest financial impact of Rs 90,000 suggests this is a minor operational compliance matter rather than a significant business disruption for the sugar and distillery company.