TaxTMI 
TaxTMI 
2026 (9) TMI 639
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....happened to be a dispute between the Directors of the company due to which the complete operations of the company was put on hold from 28.10.2019 and several petitions came to be filed before the NCLT, Hyderabad by the directors against each other. However, recovery notices came to be issued by the respondents which came to be served through speed post at the registered office of the company on 11.08.2022. A show cause notice under Section 74 read with Section 122(1) of UPGST Act, 2017 vide FORM GST DRC-01 for the period 2017-2018 to 2020-2021 were issued by the Deputy Commissioner of SGST, on three issues i.e. (a) valuation of the stock transfer of leftover goods from Kanpur Branch back to Wardha Factory; (b) Classification of the exempted goods, "light trap" used in agriculture field to protect the crops from insects and (c) RCM liability on freight inward, legal expenses and freight outwards. Accordingly, four orders came to be passed by the Deputy Commissioner of State Tax, UPGST, Sector- 2, Commercial Tax, 3rd Floor, Lakhanpur, Kanpur, third respondent for the period 2017-18 to 2020-21 under Section 74 of the Act. On 01.08.2022, notice for recovery under Section 79 was issued.....
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....d by the petitioner for the period in question, therefore, the appropriate course open for the department was to have pointed out deficiency in the returns submitted by the petitioner so as to give it an opportunity to rectify the return before proceeding under Section 74 of the Act. Section 61 of the Act, 2017 reads as under:- "(1) The proper officer may scrutinize the return and related particulars furnished by the registered person to verify the correctness of the return and inform him of the discrepancies noticed, if any, in such manner as may be prescribed and seek his explanation thereto. Sub-Section (2): In case the explanation is found acceptable, the registered person shall be informed accordingly and no further action shall be taken in this regard. Sub-Section (3): In case no satisfactory explanation is furnished within a period of thirty days of being informed by the proper officer or such further period as may be permitted by him or where the registered person, after accepting the discrepancies, fails to take the corrective measure in his return for the month in which the discrepancy is accepted, the proper officer may initiate approp....
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....down any proposition of law which restricts the exercise of jurisdiction under Section 74 upon issuance of notice under Section 61(3) of the Act. In our view, merely because no notices were issued under Section 61 of the Act would mean that issues of classification or short payment of tax cannot be dealt with under Section 74 as exercise of such power is not dependent upon issuance of notice under Section 61. The argument is misconceived is thus, repelled. In the facts of the case, we find that the petitioner has a remedy of preferring appeal which has not been availed. Various facts are asserted during the course of hearing to highlight the incapacity of the petitioner due to which the appeal could not be filed earlier. In the facts of the case, we therefore, permit the petitioner to prefer such appeal within two weeks from today and in the event such an appeal is filed, the same shall be entertained without raising any objection with regard to limitation. Subject to the observations made above, this petition is dismissed." 4. That thereafter the petitioners filed 4 appeals for the period 2017-2018 to 2020-2021 before the Additional Commissio....
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....g orders: "1. On 07.07.2026, the following orders were passed.- "1. Contention of the learned counsel for the petitioner is that the company through its Director had preferred an appeal, however, during the pendency of the appeal, the company stood wound up and without the leave of the NCLT, the proceedings could not have been decided in ex parte manner. 2. Learned Standing Counsel to seek instructions. 3. Put up this case on 27.07.2026, as fresh." 2. Today, instructions have been produced under the signature of the respondent dated 23.07.2026 taking shelter of section 279 of the Companies Act, 2013 so as to contend that there would be no bar in proceeding with the matter particularly when the bar would arise only on those contingencies wherein fresh proceedings are initiated. 3. Sri Shubham Agarwal has invited attention of the Court towards Section 279 so as to contend that the words qualified therein includes "if pending at the date of the winding up order." Submission is that the bar contained under Section 279 would be applicable also in the pending proceeding. 4. Sri N.P. Singh, learned Standing Counsel seeks time ....
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....d and thus, according to him, the order impugned be set aside and the matter be remitted back to the appellate authority to pass a fresh order. 12. I have heard learned counsel for the parties and gone through the records carefully. 13. Facts are not in issue. It is not in dispute that the petitioner-company came to be wound up by the National Company Law Tribunal on 07.03.2025. There were certain liabilities which were to be discharged by the company which entailed issuance of the notices and drawing of the proceedings by Deputy Commissioner of State Tax, UPGST, Sector- 2, Commercial Tax, 3rd Floor, Lakhanpur, Kanpur/ third respondent. Recovery proceedings were also initiated and four appeals came to be preferred before the Additional Commissioner, Grade-II (Appeals)-I, State Tax, Kanpur. Though the petitioner had appointed its lawyer/ counsel but post winding up of the company, the bone of contention between the parties is whether the lawyer/ the advocate so appointed by the company or the director would be authorized to prosecute the proceedings and represent them or not post liquidation. 14. Section 279 of the Companies Act, 2013, reads as under: "Section 279:....