2026 (3) TMI 641 - HC - GST

Orders in name of non existent entity invalid; upload adjudication to transferee's GST and deem earlier registration cancelled.

Whether adjudication orders issued in the name of a dissolved/merged entity after amalgamation are valid and whether the erstwhile entity's GST ... Validity of Orders issued in the name of a non-existent entity - jurisdictional defect - deemed cancellation of GST registration upon amalgamation - transferability of demands to successor's GST registration - non-applicability of limitation in view of section 75(3) CGST Act. Orders issued in the name of a non-existent entity - Effect of amalgamation on GST registration and validity of orders issued in the name of the erstwhile (now non existent) entity; administrative steps to be taken by Revenue. - HELD THAT:- The Court held that where a company having a GST number has ceased to exist on account of amalgamation with another company, the GST registration of the erstwhile company is to be treated as cancelled from the appointed/merger effective date and an order cannot validly be framed in the name of a non-existent entity. Upon receipt of information that a company has merged and ceased to exist, the Department must treat the earlier GST number as deemed cancelled and make the new/merged entity's GST registration operational for posting orders. Any demands relating to the earlier GST number may be uploaded against the new GST number and dealt with by the successor in accordance with law. The Court directed the Revenue to upload the impugned orders on the petitioner's GST number within one month and declared the earlier orders on the non existent entity redundant upon such uploading (paras 8-12, 15). [Paras 9, 10, 11, 12, 15] The GST registration of the erstwhile (merged) entity is deemed cancelled from the merger effective date; Revenue to upload the adjudication orders on the petitioner's GST number within one month and earlier orders shall be treated as redundant; demands, if any, may be uploaded on the new GST number. Non-applicability of limitation in view of section 75(3) CGST Act - HELD THAT:- The Court recorded that the question of limitation does not arise in the present circumstances in view of Section 75(3) of the CGST Act and therefore neither party is precluded by limitation from raising or contesting claims arising from the orders that are to be uploaded on the new GST registration (para 14). Limitation will not operate against either party in view of Section 75(3) CGST Act. Final Conclusion: The writ petitions were disposed by directing the Revenue to treat the erstwhile entity's GST registration as deemed cancelled from the merger effective date, to upload the impugned orders on the petitioner's GST number within one month (making earlier orders redundant), and by holding that limitation does not arise in view of Section 75(3) of the CGST Act; the petitioner remains free to pursue available remedies. Issues: Whether orders passed by the Revenue in the name of a non-existent entity after amalgamation can be treated as invalid and whether the GST registration of the erstwhile (merged) entity is to be deemed cancelled so that the impugned orders are uploaded on the petitioner's GST number.Analysis: Sections 28 and 29 of the Central Goods and Services Tax Act, 2017 govern amendment, cancellation and suspension of registration and require taking into account the GST number assigned to a registered person; Section 75(3) addresses limitation in certain circumstances. The factual matrix shows that the erstwhile company merged into the petitioner with an appointing date and effective date communicated to the Department, yet adjudication orders were recorded in the name of the erstwhile entity. Given settled law that orders cannot be passed in the name of a non-existent entity and in light of the statutory scheme for cancellation of registration on amalgamation or transfer, the appropriate remedy is to treat the earlier GST registration of the dissolved/merged entity as having been cancelled with effect from the date of merger and to post the adjudication orders on the petitioner's GST number; any demands relating to the earlier registration may be uploaded on and dealt with under the petitioner's GST number. Section 75(3) removes limitation objections for the parties in the circumstances presented.Conclusion: The Revenue is directed to upload the impugned orders on the petitioner's GST registration number and the earlier GST registration of the non-existent/merged entity is deemed cancelled with effect from the merger date; the petitioner remains free to pursue available remedies and liabilities relating to the earlier registration shall be dealt with on the petitioner's GST number.