Max Estates Limited Vs Union of India and another (Allahabad High Court)
Allahabad High Court has quashed GST demands raised against Max Ventures and Industries Limited (MVIL), which had already merged with Max Estates Limited as per a National Company Law Tribunal (NCLT) order dated 21.07.2023. The petitioner challenged assessment orders dated 29.11.2023, 27.04.2024, and 26.08.2024, issued under Section 73(9) of the Goods and Services Tax (GST) Act, 2017, arguing that these were issued against a non-existent entity. The GST registration of MVIL was suspended on 10.10.2023, and an application for surrender was submitted on 02.11.2023. The petitioner claimed that despite providing updated contact details, it did not receive any prior notices before being informed of the pending tax demand in January 2025.
The court ruled in favor of Max Estates Limited, citing precedents such as Commissioner of Income Tax Vs. Maruti Suzuki India Limited (2019) and HCL Infosystems Ltd. Vs. Commissioner of State Tax (2024), which establish that tax proceedings cannot continue against an entity that has ceased to exist post-merger. The court rejected the government’s argument under Section 87 of the GST Act, which permits proceedings against the transferor company, stating that this provision does not override the principle that an amalgamated company no longer exists. The writ petition was allowed, and the impugned GST demands were quashed. However, the court granted the tax authorities the option to initiate fresh proceedings against the appropriate entity, if permissible under the law.
