Adani Wilmar Limited Vs ACIT (Gujarat High Court)
Gujarat High Court ruled in favor of Adani Wilmar Limited in a petition challenging a reassessment notice issued under Section 148 of the Income Tax Act, 1961. The petitioner argued that the notice was issued in the name of Satya Sai Agroils Ltd., a company that had ceased to exist after its amalgamation with Adani Wilmar in 2015. The amalgamation was duly communicated to the tax authorities in 2016 and 2018, yet a notice was issued in March 2021. The court relied on the Supreme Court’s decision in Principal CIT vs. Maruti Suzuki Ltd., which held that reassessment notices issued to non-existent companies are void ab initio. The court also cited similar cases, emphasizing that the issuance of such notices lacks jurisdiction and is fundamentally illegal.
The court further noted that the tax authorities had access to all relevant information electronically, making their failure to acknowledge the amalgamation inexcusable. It reiterated that corporate non-existence precludes assessment proceedings against a dissolved entity. As a result, the reassessment notices were quashed with consequential reliefs for Adani Wilmar. However, the ruling clarified that the tax authorities are not precluded from initiating lawful proceedings against the amalgamated company. The judgment underscores the importance of due diligence in tax reassessment procedures and the necessity for tax authorities to update corporate records before issuing notices.
