The Bombay High Court has granted interim relief to Himesh Foods Pvt Ltd, the operator of the Mad Over Donuts (MOD) chain in India, by staying a ₹57.29 crore GST demand along with the associated penalty raised by tax authorities.
The demand arose from a show-cause notice issued by the Directorate General of Goods and Services Tax Intelligence (DGGI), which held that over-the-counter sales of donuts could not be classified as a ‘restaurant service’. Based on this interpretation, the DGGI contended that such sales should attract 18% GST instead of the 5% rate paid by the company.
Himesh Foods challenged the show-cause notice before the Bombay High Court. Meanwhile, in 2025, the GST Appellate Authority upheld the tax demand of ₹57.29 crore and imposed a penalty on the company, prompting a separate legal challenge.
A division bench comprising Justice G.S. Kulkarni and Justice Aarti Sathe noted that interim protection had been granted in similar cases earlier and held that parity warranted comparable relief in the present matter. The court accordingly stayed the operation of the adjudication order and scheduled the matter for final hearing on February 26.
Appearing for Himesh Foods, advocate Abhishek A. Rastogi argued that the GST Council has consistently sought to reduce ambiguity and ensure certainty through rate rationalisation. He pointed out that restaurant taxation has also featured in recent GST Council deliberations, reflecting ongoing efforts to clarify the applicable tax framework.
The interim stay provides temporary relief to the popular donut chain as the broader issue of GST classification for quick-service and takeaway food outlets continues to remain under judicial scrutiny.