Bombay HC stays Rs 57.29 crore GST demand against Mad Over Donuts operator
The Bombay High Court has put on hold a Rs 57.29 crore GST demand and penalty raised against Himesh Foods, the Indian franchisee operating the Mad Over Donuts brand, granting the company interim relief, according to media reports.
The demand arose from a show-cause notice issued by the Directorate General of Goods and Services Tax Intelligence (DGGI), which took the view that donuts sold across the counter cannot be classified as a restaurant service. The agency contended that such transactions should be taxed at 18 per cent under GST, rather than the 5 per cent rate under which the company had been discharging its tax liability.
Himesh Foods had initially approached the high court to challenge the show-cause notice. Subsequently, in 2025, the GST Appellate Authority confirmed the tax demand of Rs 57.29 crore and imposed a penalty, leading the company to file a separate challenge against that order as well.
While considering the matter, a division bench comprising Justice GS Kulkarni and Justice Aarti Sathe referred to an earlier decision in which interim protection had been granted in comparable circumstances. Observing that the principle of parity applied, the bench stayed the enforcement of the adjudication order and fixed February 26 as the date for final disposal of the case.
Appearing for Himesh Foods, advocate Abhishek A Rastogi argued that the GST Council has consistently sought to bring clarity and rationalisation to the tax framework. He also drew attention to recent discussions within the council on restaurant taxation, noting that these were intended to minimise uncertainty around applicable tax rates.
