GST Demand Against Amalgamated Company in Its Former Name Invalid Without Notice to Successor Entity, but Tax Liability Survives Merger and Fresh Proceedings Permissible: Punjab and Haryana High Court
Case Name: Union Bank of India (Erstwhile Andhra Bank) v. Excise and Taxation Department, Chandigarh
Date of Judgment: 14 October 2026
Citation: CWP No. 13782 of 2026
Bench: Hon’ble Mr. Justice Ashwani Kumar Mishra, Chief Justice, and Hon’ble Mr. Justice Sanjiv Berry
Held: The Punjab and Haryana High Court held that a GST show cause notice and adjudication order issued against a company that has ceased to exist following amalgamation cannot be sustained where the successor entity was not served with notice or afforded an opportunity of hearing. However, such invalidity does not extinguish pre-amalgamation GST liabilities, which remain protected under Sections 29(3) and 87 of the CGST Act, 2017.
The Court further held that Sections 29(3), 87(2) and 160 of the CGST Act must be construed harmoniously to preserve the Revenue’s right to determine and recover tax liabilities relating to the period preceding amalgamation. Accordingly, quashing an adjudication order passed against a non-existent entity does not necessarily bar fresh proceedings involving the amalgamated entity, notwithstanding an objection based on limitation.
Summary: Union Bank of India challenged a GST demand of approximately ₹75.46 crore raised against Andhra Bank through an adjudication order dated 30.04.2024, despite Andhra Bank having amalgamated with Union Bank of India with effect from 01.04.2020.
The Department had issued a show cause notice under Section 73 of the CGST/UTGST Act on 28.12.2023 concerning Financial Year 2018–19. Both the notice and subsequent adjudication order were issued in the name of Andhra Bank and uploaded against its erstwhile GST registration without serving Union Bank of India.
The principal issues were whether proceedings initiated against a non-existent entity following amalgamation were legally sustainable and whether the Department could initiate fresh proceedings despite the limitation objection raised by the successor bank.
The Court held that issuance of notice and determination of liability against Andhra Bank without involving Union Bank of India violated the principles of natural justice, rendering the adjudication order unsustainable.
However, examining Sections 29(3), 87(2) and 160 of the CGST Act, the Court observed that cancellation of GST registration or amalgamation does not extinguish tax liabilities arising before the merger. The statutory scheme expressly protects such liabilities even where their determination takes place subsequently.
The Court distinguished the Supreme Court’s ruling in Principal Commissioner of Income Tax v. Maruti Suzuki India Ltd., (2020) 18 SCC 331, observing that the Income-tax Act does not contain provisions corresponding to Sections 29(3) and 87 of the CGST Act. Consequently, the principle governing assessments against non-existent entities under income-tax law could not be applied without considering the distinct GST statutory framework.
The Court also distinguished Vodafone Idea Ltd. v. Union of India, 2026 SCC OnLine Bom 3453, and HCL Infosystems Ltd. v. Commissioner of State Tax, 169 taxmann.com 82 (Delhi), emphasising the need to harmoniously construe the statutory provisions protecting pre-amalgamation GST liabilities. It observed that denying fresh proceedings in the present case would deprive the Revenue of its right to subject the transactions to tax.
Decision: The High Court quashed the GST adjudication order dated 30.04.2024 passed against erstwhile Andhra Bank on account of non-service of notice upon Union Bank of India and consequent violation of natural justice.
However, the Court granted liberty to the Excise and Taxation Department to initiate fresh proceedings in accordance with law concerning Andhra Bank’s pre-amalgamation GST liabilities, while associating Union Bank of India as the successor entity.