2026-VIL-1048-ALH
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SGST High Court Cases

GST - Requirement of notice under Section 61 as precondition to proceed under Section 74, Application of Section 279 of Companies Act to pending proceedings after winding-up order - Disposal of appeals in ex-parte manner without hearing the liquidator - Whether notice under Section 61(3) is a mandatory precondition before proceeding under Section 74 of the CGST Act, 2017 and whether Section 279 of Companies Act, 2013 restricts continuation of pending legal proceedings after winding-up order and whether counsel appointed by company can continue representation after liquidation - HELD - Section 61 regulating scrutiny of returns and Section 74 dealing with fraud or wilful misstatement are two separate and distinct statutory exigencies. The scrutiny proceedings under Section 61 and proceedings under Section 74 are independent of each other. Issuance of notice under Section 61(3) disclosing deficiency is not a condition precedent for initiation of action under Section 74. The statutory scheme contemplates that department can directly proceed under Section 74 without first issuing notice under Section 61 where proper tax has not been deposited Section 279 of Companies Act, 2013 employs the expression if pending at the date of winding up order meaning that the bar applies equally to pending proceedings as well as fresh proceedings - Once company stands liquidated and winding-up order passed, the only competent authority to appoint or engage lawyer or advocate for prosecution of proceedings is the liquidator. The counsel appointed by company or directors prior to liquidation does not retain the authority to represent the company after winding-up without appointment by liquidator. Appeals cannot be decided in ex-parte manner without hearing the liquidator who is the legal representative of the company post-liquidation, as this violates principles of natural justice – Impugned orders are set aside and matter is remitted back to the appellate authority to pass fresh orders – The petition is disposed of
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