IDFC First Bank Limited Vs State of Maharashtra & Ors. (Bombay High Court)
GST Demand Set Aside After Merger Rendered Company Non-Existent; Proceedings Against Amalgamated Entity Held Void Despite Department’s Reliance on Section 87; Bombay HC Applies Maruti Suzuki Ruling to Quash GST Proceedings Against Merged Company; GST Audit and Demand Notices Issued to Non-Existing Company Declared Invalid by Bombay HC; Amalgamation Ends Company’s Legal Existence, GST Proceedings Cannot Continue: Bombay HC; Bombay HC Rejects GST Department’s Stand on Section 87 in Merger Dispute.
In the case of IDFC First Bank Limited Vs State of Maharashtra & Ors., the Bombay High Court quashed GST proceedings and the consequent demand order passed against Capital First Limited (CFL), holding that the proceedings were initiated against a non-existent entity after its amalgamation with IDFC First Bank Limited.
The petitioner challenged the order dated 26.04.2024 passed in Form GST DRC-07 confirming CGST and MGST demands of Rs.4,40,15,285 each and IGST demand of Rs.1,45,31,099 along with interest and penalty against CFL. The petitioner contended that CFL had ceased to exist after amalgamation approved by the National Company Law Tribunal (NCLT), Chennai by order dated 12.12.2018. Following the amalgamation, an application for cancellation of GST registration of CFL was filed on 21.01.2019 and the registration stood cancelled on 14.06.2019.
