Court rejects revenue's appeal on tax liability and refund due to merger; holds intervention not maintainable.

The court held that the revenue's appeal to intervene in Company Petition no.11/2012 and Company Petition no.12/2012 was not maintainable. It rejected the revenue's arguments regarding tax liability and refund due to merger, emphasizing the lack of authority for the Central Government and IT Authority to intervene in schemes under Section 391 of the Companies Act. The court upheld the Single Judge's decision, dismissing the appeals and company applications.

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Issues:
1. Maintainability of the appeal filed by the revenue to intervene in Company Petition no.11/2012 and Company Petition no.12/2012.
2. Tax liability and refund due to merger and amalgamation.
3. Applicability of judgments in previous cases.
4. Powers of Central Government and IT Authority to intervene in schemes under Section 391 of the Companies Act.

Issue 1: Maintainability of the appeal filed by the revenue to intervene in Company Petition no.11/2012 and Company Petition no.12/2012:
The appellant contested the judgment accepting the preliminary objection raised by the respondent regarding the maintainability of the appeal. The learned Single Judge relied on past judgments to reject the application for intervention by the revenue. The appellant argued that the merger would result in a refund of Rs. 900 crores, highlighting the lack of permission from the Finance Ministry. The revenue's contention regarding the applicability of the "Garware Plastic" case was not accepted.

Issue 2: Tax liability and refund due to merger and amalgamation:
The appellant claimed that Sesa Goa Ltd. had paid advance tax, and the merger with "Ekaterina" would lead to a refund of Rs. 900 crores. The appellant argued that the tax liability had not crystallized, distinguishing previous cases where tax planning and evasion were discussed. Concerns were raised about potential revenue loss if the merger proceeded without proper approvals.

Issue 3: Applicability of judgments in previous cases:
The respondent's counsel argued that past judgments, including the "S.R.F. Ltd." case and recent Division Bench judgments, were relevant to the present case. However, the court found that the Central Government and IT Authority do not have powers to intervene in schemes under Section 391 of the Companies Act. The court differentiated the facts of the present case from those in previous judgments, concluding that the revenue's contentions were not acceptable.

Issue 4: Powers of Central Government and IT Authority to intervene in schemes under Section 391 of the Companies Act:
The court confirmed that under Section 391, the Central Government and IT Authority do not possess the authority to intervene in schemes seeking sanction under the Companies Act. The court referenced past judgments to support this decision, emphasizing that the revenue's arguments were not valid. Ultimately, the court upheld the Single Judge's conclusion that the application for intervention was not maintainable, leading to the dismissal of both appeals and company applications.

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