Bajel Projects Limited, a listed entity on both BSE (Code: 544042) and NSE (Symbol: BAJEL), has received a Show Cause Notice from the Office of Joint Commissioner of State Tax, Danapur Circle-1, Bihar, amounting to ₹236.77 lakh, which includes tax, interest, and penalty. The notice, issued on July 21, 2025, was made under Section 74A(1) read with Section 74(5)(i) of the Goods and Services Tax (GST) Act, 2017, citing a mismatch between GSTR-3B and GSTR-7 returns.

This development was formally disclosed by the company to both BSE and NSE on July 22, 2025, as per the obligations under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Nature of the GST Demand:

The ₹236.77 lakh demand comprises of:

• Principal tax amount

• Interest accrued

• Penalties under the applicable GST sections

The GST Authority cited return mismatches between GSTR-3B (monthly summary return) and GSTR-7 (TDS return under GST), as the basis for issuing the Show Cause Notice. This discrepancy is typically reviewed to identify possible under-reporting or misreporting of tax liabilities or tax deductions at source.

Company’s Response and Position:

Bajel Projects Limited has stated that:

• It has evaluated its GST compliance thoroughly.

• It has already paid applicable taxes to the government.

• The company has sufficient documentation to demonstrate its adherence to statutory requirements.

• The notice is being reviewed internally, and a formal reply is under preparation to contest the allegations made in the Show Cause Notice.

The company emphasized that it believes it has a strong case, supported by documentation and reconciliation of records, to defend against the demand. According to the disclosure, no financial impact has been felt so far on operations, cash flows, or ongoing projects due to this notice.

Regulatory and Legal Framework:

This issue falls under:

• Section 74A(1) of the GST Act, which deals with tax demands due to fraud or willful misstatement.

• Section 74(5)(i), which allows a taxpayer to pay applicable dues before issuance of a notice, failing which a Show Cause Notice is served.

Bajel's case is currently at the Show Cause stage, meaning that a conclusive liability has not yet been adjudicated. The matter will proceed based on the company’s reply and potential hearings before the Joint Commissioner or relevant appellate authorities.

Materiality Under SEBI Disclosure Norms:

As the GST demand:

• Exceeds ₹1 crore, and

• Could potentially impact investor perception,

Bajel Projects has chosen to disclose this event under Para A, Part A of Schedule III, and sub-para 8 of Para B, under Regulation 30 of SEBI LODR Regulations, in line with its Policy on the Determination of Materiality.

This disclosure ensures transparency for shareholders, regulators, and stakeholders.

No Immediate Impact on Operations:

While a tax demand of this magnitude could raise investor concern, Bajel Projects has clarified that:

• The matter is still under initial scrutiny.

• No liability has been determined conclusively.

• There is no disruption to ongoing projects or financials.

• The company's core operations remain unaffected.

Next Steps:

Bajel Projects Limited is currently:

1. Reviewing the SCN internally through its finance and compliance teams.

2. Preparing a formal, point-wise reply to the GST Authority.

3. Exploring the legal remedies in case the SCN escalates into a confirmed demand.

4. Ensuring continuous compliance with SEBI and tax disclosure norms.

The company has assured that it will keep the exchanges informed of any material updates, including possible hearings, outcomes, or settlements with the tax authorities.

Investor Takeaway:

For shareholders and analysts, the key takeaway is that:

• The GST demand, while significant in absolute terms, is not yet final.

• Bajel’s proactive disclosure reflects its intent to manage compliance transparently.

• The company appears to be in control of the situation with a documented compliance record.

• Investors should monitor future updates closely, particularly any outcome from the authority after reviewing Bajel’s reply.

Conclusion:

This notice to Bajel Projects Limited is a procedural tax development, not an indictment. The company has maintained a confident stance, and barring any adverse final order, this issue may remain contained. However, such notices are increasingly common across industries amid automated GST scrutiny mechanisms, and companies must ensure return reconciliations and documentation are air-tight.

Bajel Projects’ disclosure showcases its intent to be fully compliant with both SEBI and GST regulations, maintaining investor trust even amid tax scrutiny.

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