Court stays GST notice against UFlex over USD 0.40m (INR 3.88 crore) tax demand

The Jammu and Kashmir and Ladakh High Court on 16 September 2026 stayed a show cause notice issued to UFlex under Section 74(1) of the state GST Act, which demanded USD 0.40m (INR 3.88 crore) in tax, USD 0.43m (INR 4.08 crore) in interest and a matching penalty for the 2020-21 financial year. UFlex argued the notice lacked the foundational allegations of fraud or wilful misstatement required to invoke that section rather than the ordinary Section 73 procedure. The case is listed for further hearing on 30 November 2026, with the stay in place until then.

Why this mattersAn interim stay, not a decision on the merits; the case tests whether the fraud provision can be used once the ordinary assessment window has closed.

• The High Court granted a stay on 16 September 2026 on a notice issued under Section 74(1) of the J&K GST Act.
• The notice demanded USD 0.40m (INR 3.88 crore) in tax, USD 0.43m (INR 4.08 crore) in interest and an equivalent penalty.
• The dispute follows a GST audit of UFlex's Bari Brahmana plant for the 2020-21 financial year.
• UFlex argued the notice disclosed no foundational facts of fraud, wilful misstatement or suppression.
• The notice was issued six days before the 31 August 2026 outer limit under Section 74(2).
• The case is listed for further hearing on 30 November 2026, with the stay continuing until then.

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