M/S. Trelleborg INDIA Private Limited vs. State Of Karnataka - Karnataka High Court, 02 July 2024

Heard together (5 matters)

WP No. 15620 of 2024

WP No. 19662 of 2022

WP No. 24110 of 2023

WP No. 25531 of 2023

WP No. 1928 of 2024

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances

- 1 - NC: 2024:KHC:24866 WP No. 15620 of 2024 C/W WP No. 19662 of 2022 WP No. 24110 of 2023 WP No. 25531 of 2023 WP No. 1928 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 15620 OF 2024 (T-RES) C/W WRIT PETITION NO. 19662 OF 2022 (T-RES) WRIT PETITION NO. 24110 OF 2023 (T-RES) WRIT PETITION NO. 25531 OF 2023 (T-RES) WRIT PETITION NO. 1928 OF 2024 (T-RES) IN W.P. NO.15620 OF 2024 BETWEEN: 1. M/S. TRELLEBORG INDIA PRIVATE LIMITED A COMPANY UNDER THE COMPANIES ACT (1) 1956, HAVING ITS REGISTERED OFFICE AT 22/9 BERETANA AGRAHARA, HOSUR MAIN ROAD BANGALORE - 560 100 AND REPRESENTED BY ITS FINANCE DIRECTOR MR. ANAND RANGANATHAN … PETITIONER (BY SRI. PRASAD PARANJAPE, ADVOCATE FOR SRI BHARATH JANARTHANAN., ADVOCATE) AND: 1. STATE OF KARNATAKA REPRESENED BY ITS CHIEF SECRETARY TO THE GOVERNMENT, VIDHANA SOUDHA BENGALURU - 560 001, KARNATAKA Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:24866 WP No. 15620 of 2024 C/W WP No. 19662 of 2022 WP No. 24110 of 2023 WP No. 25531 of 2023 WP No. 1928 of 2024 2. COMMISSIONER OF COMMERCIAL TAXES VANIJYA THERIGE KARAYALA 1 1ST FLOOR, GANDHINAGAR BENGALURU - 560 009 KARNATAKA 3. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT 4.1) NO.601, 6TH FLOOR BMTC DEPOT, TTMC BUILDING NEAR SONY SIGNAL KORAMANGALA, BENGALURU - 560 095 KARNATAKA … RESPONDENTS (BY SRI. SHAMANTH NAIK, HCGP) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO 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 DTD. 18.05.2024 BEARING REFERENCE NO. ZD2905240525746 ALONG WITH SHOW CAUSE NOTICE NO. DCCT. AUDIT-4.1/SCN/2023-24 DTD. 18.05.2024 PERTAINING TO TAX PERIOD APRIL 2019 TO MARCH 2020 ISSUED BY R-3 HEREIN AND ENCLOSED AS ANNEXURE-A COLLY AND ETC. IN W.P. NO.19662 OF 2022 BETWEEN: 1. M/S. TRELLEBORG INDIA PRIVATE LIMITED A COMPANY UNDER THE COMPANIES ACT (1) 1956, HAVING ITS REGISTERED OFFICE AT 22/9 BERETANA AGRAHARA - 3 - NC: 2024:KHC:24866 WP No. 15620 of 2024 C/W WP No. 19662 of 2022 WP No. 24110 of 2023 WP No. 25531 of 2023 WP No. 1928 of 2024 HOSUR MAIN ROAD BANGALORE - 560 100 REPRESENTED BY ITS MANAGING DIRECTOR MR. RANJAN SEN IT IS REGISTERED UNDER COMPANIES ACT, 1956. … PETITIONER (BY SRI. PRASAD PARANJAPE, ADVOCATE FOR SRI BHARATH JANARTHANAN., ADVOCATE) AND: 1. UNION OF INDIA THROUGH ITS SECRETARY DEPARTMENT OF REVENUE MINISTRY OF FINANCE GOVERNMENT OF INDIA, CENTRAL SECRETARIAT NORTH BLOCK NEW DELHI - 110 001. 2. STATE OF KARNATAKA REPRESENED BY ITS CHIEF SECRETARY TO THE GOVERNEMNT VIDHANA SOUDHA BENGALURU - 560 001 3. ASSISTANT COMMISSIONER COMMERCIAL TAXES ENFORCEMENT 22, SOUTH ZONE VTK-1, 'B' BLOCK ROOM NO.405, 4TH FLOOR KORAMANGALA BENGALURU - 560 034. - 4 - NC: 2024:KHC:24866 WP No. 15620 of 2024 C/W WP No. 19662 of 2022 WP No. 24110 of 2023 WP No. 25531 of 2023 WP No. 1928 of 2024 4. COMMISSIONER OF COMMERCIAL TAXES COMMERCIAL TAXES (KARNATAKA) VTK-2, KORAMANGALA BENGALURU - 560 034. 5. COMMISSIONER OF CGST AND CENTRAL EXCISE CGST COMMISSIONERATE - BENGALURU SOUTH DIVISION-8 KORAMANGALA BENGALURU - 560 034. … RESPONDENTS (BY SRI. SHAMANTH NAIK, HCGP FOR R2 TO R4; SMT PREETHA M., CGSC FOR R1; SRI ARAVIND V. CHAVAN, ADVOCATE FOR R5) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO 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 TITLED 'ENDORSEMENT' BEARING NO.ADCOM/ENF/SZ/ACCT-22/INS-18/2021-22 DATED 14.09.2022 FOR THE TAX PERIOD 2017-18 ISSUED BY R3 HEREIN AT ANNEXURE-A AND ETC. IN W.P. NO.24110 OF 2023 BETWEEN: 1. M/S. TRELLEBORG INDIA PRIVATE LIMITED A COMPANY UNDER THE COMPANIES ACT (1) 1956, HAVING ITS REGISTERED OFFICE AT 22/9 BERETANA AGRAHARA - 5 - NC: 2024:KHC:24866 WP No. 15620 of 2024 C/W WP No. 19662 of 2022 WP No. 24110 of 2023 WP No. 25531 of 2023 WP No. 1928 of 2024 HOSUR MAIN ROAD BANGALORE - 560 100 AND REPRESENTED BY ITS MANAGING DIRECTOR MR. RANJAN SEN … PETITIONER (BY SRI. PRASAD PARANJAPE, ADVOCATE FOR SRI BHARATH JANARTHANAN., ADVOCATE) AND: 1. STATE OF KARNATAKA REPRESENED BY ITS CHIEF SECRETARY TO THE GOVERNEMNT VIDHANA SOUDHA BENGALURU - 560 001 2. COMMERCIAL TAX OFFICER (AUDIT)-4.11, DGSTO-4, TTMC BUILDING 5TH FLOOR, BMTC BUS DEPOT 80 FEET ROAD, KORAMANGALA BENGALURU - 560 095 … RESPONDENTS (BY SRI. SHAMANTH NAIK, HCGP) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO 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 DTD. 26.09.2023 BEARING REFERENCE NO. ZD290923045251D FOR THE TAX PERIOD JULY 2017-MARCH 2018 ISSUED BY R-2 HEREIN (ANNEXURE-A) AND ETC. - 6 - NC: 2024:KHC:24866 WP No. 15620 of 2024 C/W WP No. 19662 of 2022 WP No. 24110 of 2023 WP No. 25531 of 2023 WP No. 1928 of 2024 IN W.P. NO.25531 OF 2023 BETWEEN: 1. M/S. TRELLEBORG INDIA PRIVATE LIMITED A COMPANY UNDER THE COMPANIES ACT (1) 1956, HAVING ITS REGISTERED OFFICE AT 22/9 BERETANA AGRAHARA, HOSUR MAIN ROAD BANGALORE - 560 100 AND REPRESENTED BY ITS MANAGING DIRECTOR MR. RANJAN SEN … PETITIONER (BY SRI. PRASAD PARANJAPE, ADVOCATE FOR SRI BHARATH JANARTHANAN., ADVOCATE) AND: 1. STATE OF KARNATAKA REPRESENED BY ITS CHIEF SECRETARY TO THE GOVERNEMNT VIDHANA SOUDHA, BENGALURU - 560 001 2. COMMISSIONER OF COMMERCIAL TAXES VANIJYA THERIGE KARAYALA - 1 1ST FLOOR, GANDHINAGAR BENGALURU - 560 009 KARNATAKA 3. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES LGSTO-025, 2ND FLOOR, V.T.K.-2, 2ND STAGE, RAJENDRA NAGAR KORAMANGALA, BANGALORE - 560 047 KARNATAKA … RESPONDENTS (BY SRI. SHAMANTH NAIK, HCGP) - 7 - NC: 2024:KHC:24866 WP No. 15620 of 2024 C/W WP No. 19662 of 2022 WP No. 24110 of 2023 WP No. 25531 of 2023 WP No. 1928 of 2024 THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO 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 DTD. 09.10.2023 BEARING REFERENCE NO. ZD291023009273S, ALONG WITH SHOW CAUSE NOTICE NO.ACCT(P)/LGSTO-025/DRC- 01/R1vsR3B-43/2023-24 DATED 07.10.2023 FOR THE TAX PERIOD APRIL 2018-MARCH 2019 ISSUED BY R3 HEREIN AND COLLECTIVELY ENCLOSED AS "ANNEXURE 'A'-COLLY" AND ETC. IN W.P. NO.1928 OF 2024 BETWEEN: 1. M/S. TRELLEBORG INDIA PRIVATE LIMITED A COMPANY UNDER THE COMPANIES ACT (1) 1956, HAVING ITS REGISTERED OFFICE AT 22/9 BERETANA AGRAHARA, HOSUR MAIN ROAD BANGALORE - 560 100 AND REPRESENTED BY ITS FINANCE DIRECTOR MR. RANJAN SEN … PETITIONER (BY SRI. PRASAD PARANJAPE, ADVOCATE FOR SRI BHARATH JANARTHANAN., ADVOCATE) AND: 1. STATE OF KARNATAKA REPRESENED BY ITS CHIEF SECRETARY TO THE GOVERNEMNT VIDHANA SOUDHA BENGALURU - 560 001 KARNATAKA - 8 - NC: 2024:KHC:24866 WP No. 15620 of 2024 C/W WP No. 19662 of 2022 WP No. 24110 of 2023 WP No. 25531 of 2023 WP No. 1928 of 2024 2. COMMISSIONER OF COMMERCIAL TAXES VANIJYA THERIGE KARAYALA 1 1ST FLOOR, GANDHINAGAR BENGALURU - 560 009 KARNATAKA 3. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT 4.1) V.T.K.II, 4TH FLOOR, D.V.O.-4, KORAMANGALA BANGALORE - 560 047 KARNATAKA … RESPONDENTS (BY SRI. SHAMANTH NAIK, HCGP) *** THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO 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 DTD. 15.12.2023 BEARING REFERENCE NO. ZD291223039418A ALONG WITH SHOW CAUSE NOTICE NO. DCCT. AUDIT-4.1/SCN/2023-24 DTD. 15.12.2023 PERTAINING TO TAX PERIOD APRIL 2018 TO MARCH 2019 ISSUED BY R-3 HEREIN AND ENCLOSED AS ANNEXURE-'A'-COLLY AND ETC. THESE PETITIONS COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: - 9 - NC: 2024:KHC:24866 WP No. 15620 of 2024 C/W WP No. 19662 of 2022 WP No. 24110 of 2023 WP No. 25531 of 2023 WP No. 1928 of 2024

ORDER These petitions have been filed by M/s. Trelleborg India Private Limited, who is the petitioner in all these batch of writ petitions challenging the notices/endorsement in Form GST DRC-01 as hereunder:- W.P. No.15620/2024 GST DRC-01 18.05.2024 W.P.No.19662/2022 GST DRC-01 14.09.2022 W.P.No.24110/2023 GST DRC-01 26.09.2023 W.P.No.25531/2023 GST DRC-01 09.10.2023 W.P.No.1928/2024 GST DRC-01 15.12.2023

The notices in Form GST DRC-01 have been issued for various tax periods on the ground that notices have been issued to a non-existent entity, viz., M/s. Trelleborg Sealing Solutions (India) Private Limited.

It is to be noticed that in terms of the Scheme of Amalgamation approved by National Company Law Tribunal (NCLT) Bengaluru Bench, M/s. Trelleborg Sealing NC: 2024:KHC:24866 Solutions (India) Private Limited was amalgamated resulting in the creation of a new entity M/s. Trelleborg India Private Limited, which is the petitioner herein in terms of the order dated 13.06.2017 passed by NCLT, Bengaluru Bench in T.P.No.175/2017 & 176/2017. 4. After amalgamation of M/s. Trelleborg Sealing Solutions (India) Private Limited with the Transferee Company M/s. Trelleborg Indstrial Products Private Limited, the new entity formed underwent change of name and accordingly, the petitioner represents a new Company consequent to amalgamation as per the order dated 13.06.2017 passed by NCLT, Bengaluru Bench in T.P.No.175/2017 & 176/2017. 5. Sri Shamanth Naik, learned HCGP appearing for the respondents refers to the order dated 13.06.2017 passed by NCLT, Bengaluru Bench in T.P.No.175/2017 & 176/2017 and submits that in terms of the said order, the liability stands transferred to the Transferee Company. NC: 2024:KHC:24866 Said aspect is taken note of.

It is to be noticed that after the approval of Scheme of Amalgamation by NCLT, an application for cancellation of registration of M/s. Trelleborg Sealing Solutions (India) Private Limited was made on 29.11.2021 and the final order came to be passed on 03.12.2021 in Form GST REG-19 and the effective date of cancellation of registration was stipulated as 29.11.2021. 7. It is submitted that despite all developments, a pre show cause notice came to be issued and in reply to which, the developments as referred to have been made and reference of such reply is stated to have been made. The relevant details come forth in the Summary Table of dates filed by the petitioner, which is extracted below:- NC: 2024:KHC:24866 Particulars I II III IV V (Lead Petition) 1 Writ Petition No. 19662/2022 24110/2023 25531/2023 1928/2024 15620/2024 2 Period of dispute 2017-18 2017-18 2018-19 2018-19 2019-20 3 Appointed date for amalgamation of TSSIPL into the petitioner 01.04.2016 (page 57) 4 NCLT Approval for amalgamation scheme 13.06.2017 (page 48) 5 Effective date for amalgamation 13.07.2017 (page 58) 6 Application for cancellation of registration 29.11.2021 (page 87) 7 Order for cancellation of registration 03.12.2021 (page 90) 8 Issuance of DRC-01A to TSSIPL

14.09.

2023 23.09.2023 10.10.2023 10.10.2023 (page 91) 9 Intimation of amalgamation to department vide written reply 14.01.2022 22.09.2023 29.09.2023 16.10.2023 16.10.2023 (page 95) 10 Show cause notice in DRC-01 issued to TSSIPL (non-existent entity) 14.09.2022 26.09.2023 09.10.2023 15.12.2023 18.05.2024 (page 37)

It is submitted that despite the intimation of amalgamation of the Company having been made in NC: 2024:KHC:24866 writing, the show cause notices have been issued to M/s. Trelleborg Sealing Solutions (India) Private Limited, which is a non-existent entity and accordingly the same have been challenged in these Writ Petitions and details of date of issuance of such notices is detailed at Serial No. 10 of the Summary Table of Dates, extracted hereinabove.

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 including the order of this Court dated 04.06.2024 passed NC: 2024:KHC:24866 in W.P.No.14156/2024 [M/s.Rajdisle Private Limited v. The Income Tax Officer and Another].

10.

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 Accordingly, the petitions are disposed off. JUDGE VGR