GST Notice To Amalgamated Company That Ceased To Exist Without Jurisdiction: Bombay High Court

The Bombay High Court has recently quashed a GST order against a real estate company. It held that a show cause notice issued after the company had ceased to exist pursuant to its amalgamation was without jurisdiction, making the proceedings that followed legally unsustainable.

A division bench of Justice Suman Shyam and Justice Advait M. Sethna allowed the writ petition filed by Kanakia Spaces Realty Private Limited and set aside the Order-in-Original passed by the GST authorities.

The bench held, "Consequently, we hold that any show cause notice issued to a amalgamating company after the same had ceased to exist pursuant to its merger, based on the scheme of the amalgamation, would be without jurisdiction. Therefore, any proceeding initiated thereunder, would also be null and void."

The case arose from proceedings against Kanakia Supremo Construction Private Limited, which had amalgamated with Kanakia Spaces Realty Private Limited under a scheme approved by the Bombay High Court. After the merger, Kanakia Supremo Construction stood dissolved and ceased to exist.

Even though the tax department had been informed about the amalgamation, it issued a show cause notice in June 2025 in the name of the dissolved company. An Order-in-Original dated December 31, 2025 later confirmed a GST demand of ₹42.65 crore along with interest and penalty.

The judges noted there was no dispute that the transferor company had ceased to exist or that the department knew about the amalgamation. The question before the court was whether proceedings begun with a show cause notice issued to a non-existent company could survive.

Referring to the Supreme Court's ruling in Principal Commissioner of Income Tax v. Maruti Suzuki India Ltd. and the Bombay High Court's earlier decisions in Reliance Industries Ltd. v. P.L. Roongta and Vodafone Idea Ltd. v. Union of India, the bench concluded that the notice was issued without jurisdiction. It accordingly set aside the Order-in-Original, while clarifying that it had not examined the merits of the GST demand.

For Petitioner: Senior Advocate Prakash Shah with  Mohit Raval instructed by PDS Legal

For Respondent: Advocate S. Chandrashekhar with Abhishek Mishra, for the Respondent Nos. 1 to 4. Mr. Amar Mishra, AGP , for the Respondent No.5-State.