Bannari Amman Sugars Faces Fresh Recovery Proceedings Over Rs 12 Crore Tax Alleged Under Electricity Act
Bannari Amman Sugars Limited has received proceedings from the District Collector, Erode District, directing the recovery of a significant sum related to tax and interest allegedly payable under the Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003. The total amount directed for recovery is Rs 12,72,30,170/- (Rupees Twelve Crores Seventy Two Lakhs Thirty Thousand One Hundred and Seventy only).The proceedings concern a sugar unit located at Alathukombai Village in Sathyamangalam Taluk, Erode. The company received the copy of these proceedings from the District Collector on July 1, 2026.
Legal Background and Historical Context
The recovery action relates to tax and interest purportedly due under the Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003, covering the period from June 2003 to March 2016.
Bannari Amman Sugars Limited had previously filed a Writ Petition W.P No.7397 of 2005 challenging the levy of tax under the said Act. The High Court allowed this Writ Petition in an order dated March 8, 2012, subject to the outcome of other related writ petitions regarding amendments made to the Act.
The company's legal defense has involved continued litigation at a higher level. While some subsequent challenges filed by other parties were dismissed and appeals have been lodged as Special Leave Petitions before the Hon'ble Supreme Court, others have filed review petitions. These Special Leave Petitions are currently pending consideration before the Supreme Court.
Recovery Efforts Evolve
The company had previously sought relief in 2019, requesting the Chief Electrical Inspector to Government, Tamil Nadu and the District Collector, Erode, to defer any recovery proceedings until the issues were finally decided by the Hon'ble Supreme Court due to the pendency of matters. In response to this request, the then District Collector withdrew the initial revenue recovery proceedings initiated under the Revenue Recovery Act.
However, the present District Collector has subsequently initiated fresh recovery proceedings for the same amount of Rs 12,72,30,170/- under the Revenue Recovery Act, 1864.
Company Action Plan
Bannari Amman Sugars Limited is currently consulting its legal counsel and evaluating all appropriate legal remedies available. These remedies include filing an appeal before the relevant Government authority or initiating proceedings before the Hon'ble High Court and/or the Hon'ble Supreme Court. The company maintains that it has valid legal grounds to challenge the ongoing recovery proceedings and is committed to taking all necessary steps to protect its interests.
BANARISUG Stock Price Movement
Shares of Bannari Amman Sugars Limited are edging higher at 2:16 PM, gaining 1.42% to reach ₹3517 as the stock rallies in live trading. The equity traded within a tight intraday range today, touching a low of ₹3479 and peaking at a high of ₹3520.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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