2026-VIL-480-BOM
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SGST High Court Cases

GST - Amalgamation of companies, Proceedings against non-existent entity – Challenge to proceedings against subsidiary company Capital First Limited (CFL), which had previously amalgamated with the petitioner pursuant to an order of the NCLT. The Respondents initiated various proceedings including audit, show cause notices, and demand orders against CFL, despite the fact that CFL had ceased to exist after the amalgamation - Whether the proceedings initiated and orders passed by the Respondents against the non-existent entity CFL are valid in law - HELD - The Supreme Court in Maruti Suzuki India Limited case held that when a company is amalgamated pursuant to an NCLT order, the amalgamating company ceases to exist. Accordingly, any proceedings initiated against the non-existent entity are void ab initio - The respondents were fully aware that the CFL was no longer in existence, however, completely discarding the said position on a misplaced reliance on the provisions of Section 87 of the CGST Act - The Respondents' reliance on Section 87 of the CGST Act, which provides for treatment of transactions between merging companies, is applicable to facts of the case. The Section 87 is only applicable for the intervening period between the effective date of merger and the date of the merger order, and does not empower the authorities to initiate proceedings against a non-existent entity post-merger - The impugned orders passed against the non-existent entity are quashed and the writ petition is allowed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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