Kallam Textiles Receives ₹4.97 Crore Tax Show Cause Notice

MUMBAI — Guntur-based textile manufacturer Kallam Textiles Limited received a GST show cause notice demanding ₹4,97,70,714 in unpaid tax, interest, and penalties from the Office of the Additional Commissioner (S.T.), Vijayawada, Andhra Pradesh, on Thursday, August 27, 2026.

The company disclosed the statutory order to the stock exchange on Friday, August 28, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Issued in Form GST DRC-01 under Section 73(1) of the Andhra Pradesh Goods and Services Tax (APGST) Act, 2017, the notice pertains to alleged tax shortfalls during the 2020–21 financial year. Kallam Textiles, which is currently undergoing Corporate Insolvency Resolution Process (CIRP), confirmed it disputes the tax demand and plans to challenge the notice through legal channels.

Alleged Tax Non-Payment and Statutory Proceedings

The GST show cause notice issued by the Andhra Pradesh state tax authority targets alleged non-payment and under-reporting of taxes for the fiscal year ended March 31, 2021.

According to the official corporate disclosure, the demand notice carries reference number ZD3708260460771. The tax authority invoked Section 73 of the APGST Act, 2017, which governs cases involving tax non-payment, short payment, or erroneous refund claims not involving deliberate fraud or willful misstatement.

The total monetary liability demanded across tax, interest, and penalty components stands at ₹4,97,70,714.

Insolvency Context and Operational Financial Impact

The receipt of the GST show cause notice adds a statutory liability layer to Kallam Textiles Limited while the firm operates under the Corporate Insolvency Resolution Process (CIRP).

• Entity Status: Kallam Textiles Limited (formerly Kallam Spinning Mills Limited) is operating under CIRP management.

• Financial Exposure: The financial impact on the company is quantified up to the total demand amount of ₹4.97 crore.

• Company Response: The management stated that it does not agree with the claims set out in the show cause notice and will initiate appropriate legal actions to contest the assessment.

Official Sources

According to official regulatory filings submitted to BSE Limited on August 28, 2026, by Company Secretary and Compliance Officer G. Ramesh Kumar on behalf of Kallam Textiles Limited, the disclosure complies with Para A of Part A of Schedule III under SEBI Listing Regulations. The demand originates from the Office of the Additional Commissioner (S.T.), Vijayawada, Andhra Pradesh.

Quote Section

"According to officials from Kallam Textiles Limited, the company does not agree with the demands raised in the GST show cause notice and will take appropriate legal recourse to defend its position."

Why It Matters

The issuance of a GST show cause notice against a company under insolvency resolution highlights the ongoing regulatory oversight facing distressed assets in India. For equity investors and credentialed creditors, potential tax demands quantify additional contingent liabilities that must be evaluated during the ongoing corporate insolvency proceedings.

Key Facts at a Glance

• Notice Received: Kallam Textiles received a GST show cause notice dated August 27, 2026, from Andhra Pradesh tax authorities.

• Financial Demand: The notice demands ₹4,97,70,714 in tax, interest, and penalties for FY 2020–21.

• Statutory Provision: Issued under Section 73(1) of the APGST Act, 2017, via Form GST DRC-01.

• Corporate Status: The company is currently under Corporate Insolvency Resolution Process (CIRP).

• Management Stand: Kallam Textiles disputes the demand and plans to contest the notice.

Frequently Asked Questions

What is the amount demanded in the Kallam Textiles GST show cause notice?

The tax authority has demanded ₹4,97,70,714, which includes tax, interest, and penalty amounts for FY 2020–21.

Which authority issued the tax show cause notice?

The notice was issued by the Office of the Additional Commissioner (S.T.), Vijayawada, Andhra Pradesh.

Is Kallam Textiles Limited currently under insolvency proceedings?

Yes, Kallam Textiles Limited is currently under the Corporate Insolvency Resolution Process (CIRP).

How will Kallam Textiles respond to the tax demand?

The company stated in its regulatory filing that it disagrees with the show cause notice and will pursue appropriate legal actions to contest the assessment.

Source: Corporate regulatory filing submitted to BSE Limited by Kallam Textiles Limited on August 28, 2026.