M/S Trelleborg INDIA Private Limited vs. State Of Karnataka
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The petitioner, M/s. Trelleborg India Private Limited, formerly known as Trelleborg Industrial Products India Private Limited, filed a writ petition challenging notices issued by the Commercial Tax Officer (R-3) and the Deputy Commissioner of Commercial Taxes (R-4). The notices, dated July 5, 2024, and October 10, 2023, pertained to the tax period from April 2020 to March 2021. The petitioner sought to quash these notices on the grounds that they were issued to a non-existent entity due to a prior amalgamation. The petitioner relied on a previous order of the same High Court in WP.No.15620/2024, dated July 2, 2024, which had quashed similar notices for the assessment year 2017-18 on the same grounds.
Held
The Court allowed the petition and disposed of it in terms of the previous judgment dated July 2, 2024, passed in WP.No.15620/2024 and connected matters. The Court reasoned that the present petition related to a subsequent tax period (2020-21) and involved the same petitioner and the same issue of notices being issued to a non-existent entity post-amalgamation. Following the precedent set in the earlier case, which relied on the Apex Court's decision in Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki (India) Limited, the Court held that proceedings cannot be continued against a company that has ceased to exist upon an approved Scheme of Amalgamation. Consequently, the impugned notices were quashed. The Court also reserved liberty in favour of the respondents to take recourse to such proceedings as permissible in law, acknowledging that the petitions were disposed of on the premise that no proceedings could have been initiated against a non-existent company.
Key Issues
1. Whether the notices issued by the respondents (Commercial Tax Officer and Deputy Commissioner of Commercial Taxes) to the petitioner, M/s. Trelleborg India Private Limited, for the tax period April 2020 to March 2021 are legally valid and enforceable, given that the petitioner is alleged to be a non-existent entity due to amalgamation? (Question of law) Petitioner's contention: The petitioner argued that the impugned notices were issued to a non-existent entity, rendering them without jurisdiction or authority of law. They relied on the High Court's previous order in WP.No.15620/2024, which quashed similar notices for the assessment year 2017-18, citing the principle that proceedings cannot continue against a company that has ceased to exist upon an approved Scheme of Amalgamation, as per the Apex Court's decision in Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki (India) Limited and subsequent judgments. Revenue's contention: The learned AGA did not dispute the fact that similar notices issued to the petitioner for a previous assessment year had been quashed by this Court.
Sections Cited
Section 226, Section 227
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, petitioner is seeking for the following reliefs: "(i) issue a Writ of Certiorari or any other writ, order or direction under Article 226 of the Constitution of India calling for the records pertaining to the Petitioner's case and after going into the validity and legality thereof, to quash and set aside the impugned Notice in Form GST DRC-01 dated 05.07.2024 bearing Reference No. ZD290724014213M, along with show NC: 2024:KHC:30123 cause notice in Form GST DRC-01 bearing No. CTO(P)/ LGSTO-025/ DRC-01/ 2024- dated 04.07.2024 issued by Respondent No. 3 herein pertaining to tax period from April 2020 to March 2021 and produced as "ANNEXURE 'A'-COLLY"; (ii) issue a Writ of Certiorari or any other writ, order or direction under Article 226 of the Constitution of India calling for the records pertaining to the Petitioner's case and after going into the validity and legality thereof, to quash and set aside the impugned Notice in Form GST DRC-01A dated 10.10.2023 bearing Reference No. ZD291023010891P, along with annexure thereto bearing No. DGSTO-4/DCCT(A)- 4.1/2023-24 dated 10.10.2023 issued by Respondent No. 4 herein pertaining to tax period from April 2020 to March 2021 and produced as "ANNEXURE 'B"; (iii) issue a Writ of Mandamus or any other appropriate writ, order or direction under Article 226 of the Constitution of India, directing the Respondents to forthwith withdraw and refrain from taking any steps or proceedings in pursuance or in furtherance of, the impugned Notice in Form GST DRC-01 dated 05.07.2024 bearing Reference No. ZD290724014213M, along with show cause notice in Form GST DRC-01 bearing No. CTO(P)/ LGSTO-025/ DRC-01/ 2024- 25 dated 04.07.2024 issued by Respondent No. 3 herein pertaining to tax period from April 2020 to March 2021 and produced as "ANNEXURE 'A'-COLLY" impugned Notice in Form GST DRC-01A dated 10.10.2023 bearing Reference No. ZD291023010891P, along with annexure NC: 2024:KHC:30123 thereto bearing No. DGSTO-4/DCCT(A)- 4.1/2023-24 dated 10.10.2023 issued by Respondent No. 4 herein pertaining to tax period from April 2020 to March 2021 and produced as "ANNEXURE 'B' and hold that Respondents No. 3 and 4 cannot issue a notice to an entity that has ceased to exist as a result of an amalgamation; and / or (iv) issue any other writ, order or direction as deemed fit and appropriate by this Hon'ble Court."
Heard learned counsel for the petitioner and learned AGA for the respondents and perused the material on record.
In addition to reiterating various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the order at Annexure-Q, dated 02.07.2024 passed in the case of M/S.TRELLEBORG INDIA PRIVATE LIMITED Vs. STATE OF KARNATAKA AND OTHERS in WP.No.15620/2024 and connected matters filed by the petitioner and other identically/similarly situated assesses, in relation to the Assessment Year 2017-18, wherein the claim of the petitioner was upheld by this Court on the ground that the impugned notices/endorsement issued to non-existent entity was without NC: 2024:KHC:30123 juri iction or authority of law and the same were quashed by this Court. It is submitted that the present petition in relation to the subsequent year 2020-21 also deserves to be quashed and the present petition also deserves to be disposed of in terms of the aforesaid order.
Per contra, learned AGA does not dispute that in relation to the previous Assessment Year and in respect of the very same petitioner herein, this Court quashed the notices/endorsement issued to the petitioner.
As rightly contended by the learned counsel for the petitioner in WP.No.15620/2024 and connected matters, dated 02.07.2024 filed by the petitioner herein and in connected matters, this Court has held as under. "
Such of the facts as referred to above are not in dispute. In light of the legal position emanated from the decision of Apex Court in Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki (India) Limited reported in (2020) 18 SCC 331, it is clear that once an amalgamating entity ceases to exist upon approved Scheme of Amalgamation, the question of continuing the proceedings as regards the non-existent Company cannot be permitted. This position has been reiterated in the subsequent judgments of this Court NC: 2024:KHC:30123 including the order of this Court dated 04.06.2024 passed in W.P.No.14156/2024 [M/s.Rajdisle Private Limited v. The Income Tax Officer and Another].
Admittedly, as the notices/endorsement at Annexure-'A' are issued to a non-existent entity, the proceedings sought to be initiated by virtue of show cause notices/endorsement at Annexure-'A' in all the petitions are set aside. It is needless to state that the respondents are at liberty to pursue the proceedings against the appropriate entity regarding the subject matter of notices at Annexure-'A' as is permissible in law, as the petitions are disposed off on the premise that no proceedings could have been initiated against a non-existent Company. All contentions are kept open."
It is the matter of record that the said petition was in relation to the Assessment years 2017-18, 2018-19 and 2019-20 and the instant petition being related to the subsequent year 2020- 21, the present petition also deserves to be allowed and disposed of in terms of the aforesaid judgment of this Court.
In the result, I pass the following: ORDER i) The petition is hereby allowed and disposed of in terms of the aforesaid judgment dated 02.07.2024 NC: 2024:KHC:30123 passed by this Court in the case of M/S.TRELLEBORG INDIA PRIVATE LIMITED Vs. STATE OF KARNATAKA AND OTHERS in WP.No.15620/2024 and connected matters. ii) The impugned notices at Annexure-A (Colly) dated 05.07.2024 and Annexure-B, dated 10.10.2023, are hereby quashed. iii) Liberty is, however, reserved in favour of the respondents to take recourse to such proceedings as permissible in law. (S.R.KRISHNA KUMAR) JUDGE PHM List No.: 1 Sl No.: 46 CT: BHK
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.