2026-VIL-91-BOM
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VAT High Court Cases

Maharashtra Value Added Tax Act, 2002 - Freezing of bank account for recovery of tax dues of amalgamated company - Petitioner was Director of Omkar Specialty Chemicals Ltd. (OSCL) from 2007-2017. Urdhwa Chemicals Company Pvt. Ltd. (Urdhwa Chemicals) was amalgamated with OSCL in 2017. After the amalgamation, the petitioner resigned as Director of OSCL in 2017. Dept sought to recover tax dues of Urdhwa Chemicals by freezing the petitioner's bank account under Section 33(1) of the MVAT Act, 2002 - Whether the respondent authorities were justified in freezing the petitioner's bank account to recover the tax dues of Urdhwa Chemicals, a non-existent company after its amalgamation with OSCL – HELD - On the day the assessment order was passed, Urdhwa Chemicals itself was a non-existing entity, being amalgamated with OSCL. After the amalgamation of Urdhwa Chemicals with OSCL, the tax liability could not be that of Urdhwa Chemicals but of OSCL. Further, the petitioner had resigned as a director in 2017 and thus could not be held liable for the tax dues of Urdhwa Chemicals - The law in regard to the assessment order being passed against a non-existing entity is well-settled. Once an amalgamating company ceases to exist due to an approved scheme of amalgamation, there is no warrant in law for the authorities to proceed against the non-existent company – Further, the respondent's reliance on Section 44(6) of MVAT is misplaced as it applies only to private companies and not to an amalgamated entity - The impugned notice freezing the petitioner's bank account is quashed and the petition is allowed
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