Demand for Non Submission of C Form

[Ashok Chopra]

We had revived the 'X' company from Company Court under Section 466 of the Company Act with the consent of former management.  Undertaking was given by Y company to Company Court that in case of any other liability if pending against  X Company, this will be paid by Y Company.  Y company  was in liquidation for last 20 years. .  After revival Former Directors resigned and new Directors entered into it and amalgamated the X company in their existing 'Y'  company with the permission of Company Court.

During tenure of X company in liquidation, the sales authorities assessed Ex-parte and created of demand for non submission of C forms and  issued notice to Y company now after 25 years i.e. 20 years in liquidation and 5 years lapsed.

What should i do? pls advice

[YAGAY andSUN]

There is no statutory bar to adjudicate the matter.  In CCE v Bhagsons Paint Industry 2003(2003 (10) TMI 49 - SUPREME COURT OF INDIA )(158) ELT 129 (SC), adjudication after nine years of issue of SCN was held as permissible, particularly because it pertained to duty and not to penalty or interest (of course, even in respect of notice for penalty or interest, there is no statutory time limit for adjudication.

Though, you may make plea that:-

1) Matter is very old

2) Unable to locate the documents

3) Ex party orders were not received (after checking the facts).

4) Entire Management has been changed.

Please also discuss with your consultant.

AI Summary

No statutory limitation on adjudication permits assessment long after issuance of show cause notices for tax duty liabilities. The core legal position is that no statutory limitation prevents adjudication of historic tax demands after long delays, including assessments issued after company revival and amalgamation; where claims concern duty (and even penalties or interest) adjudication may proceed notwithstanding the passage of many years. Practical responses include pleading the age of the matter, loss of records, non-receipt of ex parte orders and change of management, and seeking specialist tax advice to reconstruct records and challenge procedural irregularities.