Nayara Energy Limited vs The Assistant Commissioner Of ...
2021 Latest Caselaw 17305 Bom

          Digitally
          signed by
GAURI     GAURI AMIT
          GAEKWAD                                     1/5                      908.WP-59-2020.doc
AMIT      Date:
GAEKWAD   2021.12.15
          17:43:07
          +0530
                               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                   ORDINARY ORIGINAL CIVIL JURISDICTION
                                        WRIT PETITION NO.59 OF 2020
              Nayara Energy Limited
              (Successor on amalgamation to
              Vadinar Power Co. Ltd.)                       ....Petitioner
                        V/s.
              The Assistant Commissioner of Income
              Tax Circle - 5 (3) (2) & Ors.              ....Respondents
                                                  ----
              Mr. P.J. Pardiwalla, Senior Advocate a/w. Mr. Niraj Sheth i/b. Mr. Atul K.
              Jasani for petitioner.
              Mr. Suresh Kumar for respondents.
                                                  ----
                                                     CORAM : K.R. SHRIRAM &
                                                              AMIT B. BORKAR, JJ.

DATED : 13th DECEMBER 2021

P.C. :

1 Petitioner is impugning an order dated 4th December 2019

passed by respondent rejecting the objections raised by petitioner for

Assessment Year 2014-2015 for the notice issued under Section 148 of the

Income Tax Act, 1961 (the said Act).

2 One of the main ground of challenge to this notice apart from

many others is that the notice under Section 148 of the said Act has been

issued to a non existing company. Therefore, Mr. Pardiwalla states that as

held by this Court as well as the Apex Court in various judgments, one of

the most recent being Principal Commissioner of Income Tax, New Delhi

V/s. Maruti Suzuki India Ltd. and in Writ Petition No.2828 of 2019 dated

11th August 2021 by this Court, the notice is bad in law.

              Gauri Gaekwad
                                        2/5                        908.WP-59-2020.doc




3               Mr. Pardiwalla submitted that on 31st October 2018 the National

Company Law Tribunal, Ahmedabad (NCLT) passed an order in a scheme of

amalgamation between Vadinar Power Company Limited and petitioner,

which was earlier called Essar Oil Limited. On 30th November 2018 Form

No.INC-28 was filed with Registrar of Companies and on 10 th December

2018 intimation was also given to respondent no.1. In the letter dated

10th December 2018, it is expressly mentioned " Accordingly, the company

has ceased to exist w.e.f. November 30, 2018, i.e., from the date of filing of

e-form INC-28 with ROC" and this letter has been issued by petitioner on

behalf of merged entity "Vadinar Power Company Limited". Even the

letterhead shows "on behalf of merged company Vadinar Power Company

Limited".

4 On 3rd January 2019 petitioner informed Principal

Commissioner of Income Tax-5 about the amalgamation. On 31 st January

2019 respondent nos.1 and 2 were informed about the amalgamation.

Notwithstanding that, on 31st March 2019 respondents issued a notice to

Vadinar Power Company Limited under Section 148 of the said Act though

the company had ceased to exist having been amalgamated with petitioner.

On 14th May 2019 petitioner requested respondent to treat the return filed

on 27th November 2014 as filed in compliance of the notice and sought

reasons recorded under Section 148(2) of the said Act. In the

Gauri Gaekwad 3/5 908.WP-59-2020.doc

communication, petitioner has made it very clear that Vadinar Power

Company Limited now merged with Nayara Energy Limited. On

28th September 2019 once again respondent issued notice to Vadinar Power

Company Limited, a non existing company. Petitioner responded by a letter

dated 14th October 2019 where once again it was mentioned "Nayara

Energy Limited (on behalf of merged company) and also (on behalf of

merged entity Vadinar Power Company Limited). On 18 th October 2019,

reasons recorded for reopening the assessment for Assessment Year 2014-

2015 was provided again to Vadinar Power Company Limited, the non

existing company. On 18th November 2019 petitioner objected to the

validating of the reassessment proceedings and on the letterhead again it is

mentioned Nayara Energy Limited (formerly known as Essar Oil Limited)

(on behalf of merged company Vadinar Power Company Limited). Still the

impugned order disposing of the objections dated 4 th December 2019 was

passed in the name of Vadinar Power Company Limited. In the entire order

disposing of the objections, Mr. Pardiwalla submitted that there is no

reference even made to any of the communications from petitioner that

Vadinar Power Company Limited has ceased to exist having been

amalgamated with petitioner.

5 In view of the above, the notice issued under Section 148 of the

said Act to a non existing company is bad in law and therefore, even the

Gauri Gaekwad 4/5 908.WP-59-2020.doc

order disposing of the objections passed will also be bad in law.

6 In the circumstances, petition is allowed in terms of prayer

clause - (a) which reads as under :

(a) to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, Order or Direction under Article 226 of the Constitution of India calling for the records of the Petitioner's case and after examining the legality and validity thereof, quash and set aside the impugned notice dated 31st March 2019 (Exhibit

of the Act to reopen the assessment for the assessment year 2014-15 as well as the impugned order dated 4th December 2019 (Exhibit S) rejected the Petitioner's objections for the assessment year 2014-15.

7 The Principal Chief Commissioner is directed to hold an enquiry

against the concerned officers as to why despite being brought to their

notice that Vadinar Power Company Limited is a non existing entity having

been amalgamated with petitioner notices were continued to be issued in

the name of Vadinar Power Company Limited and even the order disposing

of the objections came to be passed in the name of Vadinar Power Company

Limited resulting in the notice under Section 148 of the said Act itself being

quashed. The Principal Chief Commissioner, after holding an enquiry, may

take such action as required against the erring officers, if found guilty. The

enquiry shall be completed within six weeks from today.

Gauri Gaekwad
                                      5/5                      908.WP-59-2020.doc




8               A copy of this order be sent to the Principal Chief

Commissioner, Mumbai and also sent to Chairman, CBDT and to the Law

Minister (Government of India) for information and necessary action.

9               Petition disposed.




(AMIT B. BORKAR, J.)                                   (K.R. SHRIRAM, J.)




Gauri Gaekwad