Nagarjuna Agro Chemicals Pvt. Ltd. Vs State of U.P. (Allahabad High Court)
Summary: The Allahabad High Court considered a writ petition arising from four GST appeals for financial years 2017-18 to 2020-21 filed by M/S Nagarjuna Agro Chemicals Pvt. Ltd. against orders passed under Section 74 of the UPGST Act. The original proceedings concerned valuation of stock transfer, classification of “light trap” used in agriculture and reverse charge liability on specified expenses. Earlier, the petitioner had challenged the Section 74 proceedings on the ground that the department had not issued ASMT-10 under Section 61 before initiating proceedings under Section 74. In the connected proceedings, the Court had held that scrutiny of returns under Section 61 and proceedings under Section 74 are separate and distinct and that issuance of a notice under Section 61(3) is not a condition precedent for action under Section 74. The petitioner thereafter filed appeals before the Additional Commissioner (Appeals). During pendency of those appeals, the National Company Law Tribunal, Hyderabad passed an order dated 07.03.2025 winding up the petitioner-company and appointing a liquidator. The petitioner informed the appellate authority about the winding-up order and requested that the proceedings be kept in abeyance. It was subsequently asserted that the NCLAT had kept future liquidation actions in abeyance, without staying the winding-up order itself. Nevertheless, the appellate authority passed four orders dated 10.11.2025 rejecting the appeals. Before the High Court, the petitioner contended that after winding up, the existing counsel or directors could not continue to represent the company and that Section 279 of the Companies Act, 2013 operated in respect of pending as well as fresh proceedings. The Revenue contended that Section 279 applied only to fresh proceedings but accepted that the appellate orders had been passed ex parte and without considering the petitioner’s say, and supported remand. The Court noted that the winding up of the company on 07.03.2025 was undisputed and observed that Section 279 expressly uses the words “if pending”, indicating that pending proceedings are within its textual scope. The Court also considered the important question as to who was competent to appoint counsel to prosecute proceedings after liquidation. However, since the petitioner alleged that it had not been heard and the Revenue itself took the position that the matters should be remitted, the Court did not delve further into those issues. It set aside all four appellate orders dated 10.11.2025 relating to FY 2017-18 to 2020-21 and remitted the matters to the appellate authority for fresh orders. The petitioner was directed to communicate the order to the liquidator within three weeks, while the appellate authority was directed to issue notice to the liquidator within one month, fix a personal hearing with at least three weeks’ advance notice and thereafter pass orders within a further period of four months. The Court expressly clarified that the order was not an expression on the merits of the underlying GST disputes and directed the appellate authority to decide the matters strictly in accordance with law without being influenced by the observations made in the writ proceedings.
