2025 (1) TMI 1224 - HC - Customs

Seeking change of name of the Company - tax exemption under the Special Economic Zones Act 2005 - HELD THAT - The stand of the petitioner regarding change of name of Company is not accepted mainly on the ground that original certificate issued by Registrar of Companies was not produced by the petitioner. A plain reading of impugned order shows that the petitioner submitted copy of relevant certificate issued by the competent authority showing the change of name of the company. The said certificate is disbelieved by holding that certified copy of the same was not filed. No attempts were made to get the genuineness of the certificate verified from issuing authority i.e. the office of the Registrar. No reasons are assigned as to why true/photocopy of certificate is to be disbelieved. Similarly there is no iota of discussion whether the petitioner deserves any exemption for functioning in SEZ. These relevant aspects are required to be looked into. Conclusion - i) No attempts were made to get the genuineness of the certificate verified from issuing authority i.e. the office of the Registrar. No reasons are assigned as to why true/photocopy of certificate is to be disbelieved. ii) The matter remanded back to the same authority for reconsideration. Petition disposed off by way of remand.

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

Whether the change of name from M/s. Vignette Software Development India Private Ltd. to M/s. Open Text Technologies Pvt. Ltd. was validly recognized for the purposes of the proceedings initiated by the Income Tax Department.
Whether the petitioner was entitled to tax exemption under the Special Economic Zones Act, 2005, given its status as a unit within a Special Economic Zone (SEZ).
Whether the procedural fairness was adhered to in the issuance and adjudication of the show-cause notice, particularly concerning the opportunity given to the petitioner to present original documents.

ISSUE-WISE DETAILED ANALYSIS

1. Validity of Name Change Recognition

Relevant legal framework and precedents: The Companies Act, 1956, particularly Section 21, which governs the change of a company's name, and the procedural requirements for such a change to be recognized legally.
Court's interpretation and reasoning: The Court noted that the petitioner had indeed provided a certificate from the Registrar of Companies indicating the name change. However, the impugned order did not accept this due to the absence of an original certificate.
Key evidence and findings: The petitioner submitted a photocopy of the certificate of name change dated 22.04.2010. The Court found that the adjudicating authority did not make efforts to verify the certificate's authenticity with the Registrar's office.
Application of law to facts: The Court determined that the failure to accept the name change based solely on the lack of an original document was insufficient, especially without attempts to verify the document's authenticity.
Treatment of competing arguments: The Income Tax Department argued that the petitioner failed to provide original documentation, thus invalidating the name change for their records. The Court, however, found this reasoning lacking in procedural fairness.
Conclusions: The Court concluded that the issue of the name change required further examination and verification by the competent authority.

2. Entitlement to Tax Exemption under SEZ Act

Relevant legal framework and precedents: The Special Economic Zones Act, 2005, which provides tax exemptions to units operating within SEZs.
Court's interpretation and reasoning: The Court noted the absence of any discussion in the impugned order regarding the petitioner's claim for tax exemption under the SEZ Act.
Key evidence and findings: The petitioner asserted its operation within an SEZ, which was not contested or addressed in the impugned order.
Application of law to facts: The Court found that the adjudicating authority failed to consider the petitioner's claim for exemption under the SEZ Act, which was a critical oversight.
Treatment of competing arguments: The Income Tax Department did not address this point in their arguments, focusing instead on procedural issues.
Conclusions: The Court deemed it necessary for the adjudicating authority to consider the SEZ exemption claim in their fresh evaluation.

3. Procedural Fairness and Opportunity to Present Original Documents

Relevant legal framework and precedents: Principles of natural justice requiring fair opportunity to present evidence and respond to allegations.
Court's interpretation and reasoning: The Court criticized the lack of opportunity given to the petitioner to present the original certificate and the absence of any attempt by the authority to verify the document's authenticity.
Key evidence and findings: The petitioner claimed it was not directed to produce the original certificate during the proceedings.
Application of law to facts: The Court found procedural lapses in the handling of the petitioner's submissions and evidence.
Treatment of competing arguments: The Income Tax Department maintained that the petitioner had the opportunity to present the original certificate, which the Court found unsubstantiated.
Conclusions: The Court ordered a remand for the authority to allow the petitioner to submit the original certificate and address any discrepancies in registration numbers.

SIGNIFICANT HOLDINGS

The Court set aside the Order-in-Original dated 24.03.2023, citing procedural deficiencies and the need for further examination of the petitioner's claims.
The Court emphasized the importance of verifying the authenticity of documents through appropriate channels and considering all relevant claims, such as SEZ exemptions, in tax adjudications.
The Court directed the competent authority to provide a personal hearing and allow the petitioner to file an additional reply with necessary documentation.
Verbatim quote: "No attempts were made to get the genuineness of the certificate verified from issuing authority i.e. the office of the Registrar."
The Court refrained from expressing any opinion on the merits of the case, focusing instead on ensuring a fair procedural process.