The Madras High Court stayed the Service Tax Demand passed in the name of amalgamating company, after it ceased to exist.
Mr.G.Natarajan, counsel for sole writ petitioner, L&T notwithstanding very many averments and grounds raised in writ affidavit submits in the Admission Board at this prima facie stage that sheet anchor ground of attack qua SCN and consequent order is, they have been issued/made in the name of amalgamating company post amalgamation though the factum of amalgamation and relevant date of amalgamation have been communicated to respondent both prior to SCN and in response communication i.e., reply to SCN.
The impugned SCN is dated 24.09.2020, but the relevant date qua amalgamation is prior to that i.e., 18.05.2020 is writ petitioner counsel’s say. Prior to impugned SCN on 02.09.2020, when the writ petitioner Company’s Senior Deputy General Manager (Finance and Accounts) gave a statement, made it clear that the noticee (amalgamating company) which was 100% subsidiary of amalgamated company has been merged with the amalgamated company. This has been reiterated in 06.05.2021 reply to SCN is learned counsel’s further say. Notwithstanding this position, the respondent has proceeded with further proceedings qua impugned SCN and main impugned order dated 29.06.2021 again in the name of amalgamating company which ceased to exist on and from 18.05.2020. To be noted, L&T Shipbuilding Limited is the amalgamating company and writ petitioner herein Larsen and Toubro Limited is the amalgamated company and as already alluded to supra, the relevant date is 18.05.2020.
Mr. Natarajan contended that the issue of SCN and culmination of the same in the impugned order in the name of amalgamating company is ex facie illegal and liable to be set aside. As issue of notice i.e., SCN and assessment qua a non-existent entity (albeit a juristic person) is a jurisdictional error warranting interference in writ jurisdiction
The Single bench of Justice M.Sundar stayed the order and listed the matter on November 15, 2021 for the next date of hearing.
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