Delhi High Court Invalidates GST Notices Issued to a Merged Company š«š
š Issue: GST demand notice and order were issued against a non-existent entity (amalgamating company) post-merger, despite the company ceasing to exist following an NCLT-approved Scheme of Arrangement.
āļø Court's Decision: Applying principles from Maruti Suzuki (India) Limited v. PCIT, the court held that orders against a non-existent entity are void ab initio and cannot be rectified under provisions like Section 160 of the CGST Act. The reliance on Section 87 for liability transfer to the petitioner was also deemed inadequate to validate proceedings.
ā
Outcome: The Delhi High Court quashed the SCN and demand order while granting liberty to the authorities to pursue fresh proceedings permissible under the law.
š”ļø Relief: A major win for businesses in mergers and acquisitions, ensuring procedural compliance in GST notices!
Case Title: HCL Infosystems Ltd. Vs Commissioner of State Tax
Court: Delhi High Court
Citation: W.P.(C) 7391/2024 & CM APPL. 30899/2024
Dated: 21-Nov-2024