Assessment void where s.143(2) notice served on non-existent amalgamating entity and order framed against wrong company

SC held the assessment void where the jurisdictional notice under s.143(2) was issued to a non-existent amalgamating entity and the order was framed against the amalgamating company; this constituted substantive illegality not curable under s.292B. Participation by the taxpayer could not estop the law. Relying on the co-ordinate bench precedent, the Court applied the same view to the relevant assessment year to preserve consistency and certainty in tax litigation, resulting in the assessment being set aside.

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Issues Involved:
1. Validity of assessment in the name of a non-existent entity.
2. Applicability of Section 292B to cure defects in the assessment process.
3. Effect of participation by the amalgamated company in assessment proceedings.
4. Jurisdictional validity of notices issued to a non-existent entity.
5. Relevance of previous judgments and their applicability to the current case.

Detailed Analysis:

1. Validity of Assessment in the Name of a Non-Existent Entity:
The primary issue was whether the assessment made in the name of Suzuki Powertrain India Limited (SPIL), which had amalgamated with Maruti Suzuki India Limited (MSIL), was valid. The Tribunal and the High Court held that the assessment was a nullity since SPIL ceased to exist post-amalgamation. This view was affirmed by the Supreme Court, which stated, "the initiation of assessment proceedings against an entity which had ceased to exist was void ab initio."

2. Applicability of Section 292B to Cure Defects in the Assessment Process:
The Revenue argued that any mistake in the assessment order, such as naming the non-existent amalgamating company, could be cured under Section 292B. However, the Supreme Court held that this was a substantive illegality, not a procedural defect. The Court emphasized, "This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B."

3. Effect of Participation by the Amalgamated Company in Assessment Proceedings:
The Revenue contended that since MSIL participated in the assessment proceedings, the defect should be considered cured. The Supreme Court rejected this argument, stating, "Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law."

4. Jurisdictional Validity of Notices Issued to a Non-Existent Entity:
The Court noted that the jurisdictional notice under Section 143(2) was issued to SPIL after it had ceased to exist. This rendered the notice and subsequent proceedings void. The Court cited previous decisions, including Spice Entertainment, which held that an assessment order passed in the name of a non-existent entity is void.

5. Relevance of Previous Judgments and Their Applicability to the Current Case:
The Court referred to its previous decisions, including Spice Entertainment and Skylight Hospitality LLP, to determine the applicability of Section 292B and the validity of assessments made in the name of non-existent entities. It concluded that there was no conflict between these decisions and that the principles laid down in Spice Entertainment governed the current case. The Court stated, "There is no conflict between the decisions of this Court in Spice Enfotainment and Skylight Hospitality LLP."

Conclusion:
The Supreme Court dismissed the appeal, affirming that the assessment order in the name of SPIL, a non-existent entity, was void. It held that such a defect could not be cured under Section 292B and that participation by the amalgamated company did not validate the proceedings. The judgment emphasized the need for consistency and certainty in tax litigation, aligning with previous decisions on similar issues.

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