Mukka Proteins Limited, one of India’s leading manufacturers and exporters of fish meal, fish oil, and other value-added products, is currently in the midst of a tax-related legal battle. The company has been issued a tax demand totaling ₹9.82 crore by the Additional Commissioner of Central Excise & Central GST, Mangaluru. This demand pertains to the financial years 2019-20 to 2022-23.

Tax Demand Breakdown

As per the notice previously disclosed in the company's letter dated 12th August 2024, the demand includes the following components:

• IGST (Integrated Goods and Services Tax): ₹9,18,40,020

• CGST (Central Goods and Services Tax): ₹32,14,986

• SGST (State Goods and Services Tax): ₹32,14,986

This assessment was made under Section 73 of the CGST Act, which generally pertains to non-fraudulent discrepancies in tax payments.

First Appeal Rejected

Mukka Proteins had contested the tax order before the Commissioner of Central GST and Central Excise (Appeals). However, in a recent development, the appellate authority upheld the earlier order, effectively rejecting the company’s appeal and confirming the tax demand issued by the Additional Commissioner in Mangaluru.

Despite this rejection, the company remains confident in its legal position and plans to challenge the decision at the next appellate level.

“The company reasonably expects a favorable outcome at the Appellate level,” Mukka Proteins stated in its latest regulatory disclosure.

No Material Impact on Business

Importantly, the company has clarified that there is no material impact on its operations, financials, or business continuity due to the current tax proceedings.

• No changes to operations: Business activities continue uninterrupted.

• No impact on financials: The ₹9.82 crore demand has not resulted in any cash outflows as of now.

• No immediate provisions reported: The company has not made any provision for this liability yet, indicating confidence in a positive verdict.

Legal Path Forward

While the appeal before the Commissioner has failed, Mukka Proteins will now approach the Appellate Authority, likely the Goods and Services Tax Appellate Tribunal (GSTAT), depending on the procedural route.

The GSTAT is an independent authority designed to resolve disputes between taxpayers and tax authorities, and its decisions can only be appealed in the High Court under specific circumstances.

Broader Implications

This development comes at a time when Indian regulatory bodies have increased scrutiny on indirect tax compliance, particularly in sectors like manufacturing, exports, and trading.

For listed companies like Mukka Proteins, such demands must be disclosed publicly to maintain transparency with shareholders and the investing public. However, the company’s measured response and confidence indicate that this may be a procedural issue rather than a significant tax default.

Not Related to Key Management

The company has also clarified that there are no litigations or proceedings involving its key management personnel, promoters, or persons in control. This further limits the fallout from the current situation, as no senior executives are directly entangled in the legal proceedings.

No Settlements or Penalties Yet

There has been no settlement in the matter so far. The company has not paid any compensation or penalty, and since the legal challenge is ongoing, the outcome and financial liability (if any) remain uncertain.

Conclusion

Mukka Proteins Limited is preparing for its next legal step as it challenges a GST demand of nearly ₹9.82 crore following an unfavorable appellate verdict. Despite the setback, the company remains confident of a favorable result in subsequent proceedings. There is no disruption to operations or financial health, and the company continues to engage with legal remedies as per due process.

This update holds relevance for investors, market analysts, and stakeholders monitoring compliance, financial risk exposure, and tax-related matters involving listed entities.

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