GST proceedings against a non-existent amalgamating company are void ab initio; Section 87 cannot authorise notice after merger.

GST proceedings cannot be maintained against an amalgamating company after it has ceased to exist pursuant to a sanctioned merger, because action against a non-existent entity is void ab initio and participation in the proceedings does not cure the jurisdictional defect. Section 87 of the CGST Act was treated as limited to liability arising in the intervening period between the effective date of the merger and the date of the order, and not as authority to issue notice or adjudicate against a dissolved entity after amalgamation.

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Issues: Whether a show-cause notice and consequent order issued under the GST law against an amalgamating company after it had ceased to exist upon merger were without jurisdiction and void ab initio, and whether Section 87 of the CGST Act could sustain such proceedings.

Analysis: The merger was approved by the NCLT and the fact of amalgamation had been intimated to the GST authorities. Once the amalgamating entity ceased to exist, proceedings could not validly be initiated or continued in its name. The principle that action against a non-existent person is void ab initio applied with full force, and participation in the proceedings did not cure the jurisdictional defect. Section 87 of the CGST Act was held to operate only in respect of liability for transactions in the intervening period between the effective date of the merger order and the date of the order, and not to authorise issuance of notice to a non-existent entity after amalgamation.

Conclusion: The impugned show-cause notice and order were held to be without jurisdiction and void ab initio, and Section 87 of the CGST Act did not save the proceedings.

Final Conclusion: The petition succeeded and the impugned action was quashed on the ground that GST proceedings cannot be maintained against an entity that has ceased to exist after merger.

Ratio Decidendi: Proceedings initiated under GST against an entity that has ceased to exist upon sanctioned amalgamation are void ab initio, and Section 87 of the CGST Act does not authorise notice or adjudication against such a non-existent entity after the merger has taken effect.

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