TaxTMI 
TaxTMI 
Company ABC has been merged with Company XYZ. Can SCN be issued to ABC post the merger?
SCN to merged company
12 Sep 2024 
10 Replies 
2813 Views Asked by
Merger liability: pre-existing tax obligations persist and enforcement targets the successor or jointly liable transferee.
Whether a show-cause notice can be issued to a transferor after merger depends on statutory continuity of liabilities: company law preserves pre-existing rights and obligations and allows legal proceedings to be continued by or against the resulting company. GST rules make transferor and transferee jointly and severally liable for liabilities attributable to transferred business and treat constituent companies as distinct for certain interim purposes, so enforcement and registration considerations determine whether proceedings target the successor entity or the transferee. (AI Summary)
Whether a show-cause notice can be issued to a transferor after merger depends on statutory continuity of liabilities: company law preserves pre-existing rights and obligations and allows legal proceedings to be continued by or against the resulting company. GST rules make transferor and transferee jointly and severally liable for liabilities attributable to transferred business and treat constituent companies as distinct for certain interim purposes, so enforcement and registration considerations determine whether proceedings target the successor entity or the transferee. (AI Summary)