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TMI BlogSCN to merged companyX X X X Extracts X X X X X X X X Extracts X X X X ..... Company ABC has been merged with Company XYZ. Can SCN be issued to ABC post the merger? - Reply By KASTURI SETHI - The Reply = Relevant extract of Section 378 ZN (14) of the Company Act (14) The amalgamation, merger or division of companies under the foregoing sub-sections shall not in any manner whatsoever affect the pre-existing rights or obligations and any legal proceedings that might have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n continued or commenced by or against any erstwhile company before the amalgamation, merger or division, may be continued or commenced by, or against, the concerned resulting company, or merged company, as the case may be. Hence SCN can be issued to ABC. - Reply By Shilpi Jain - The Reply = Section 85 is relevant in this case Liability in case of transfer of business. 85. (1) Where a taxable pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, liable to pay tax under this Act, transfers his business in whole or in part, by sale, gift, lease, leave and license, hire or in any other manner whatsoever, the taxable person and the person to whom the business is so transferred shall, jointly and severally, be liable wholly or to the extent of such transfer, to pay the tax, interest or any penalty due from the taxable person upto the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such transfer, whether such tax, interest or penalty has been determined before such transfer, but has remained unpaid or is determined thereafter. - Reply By KASTURI SETHI - The Reply = Dear Querist, This is also worth reading. Before merger both companies are distinct persons. Section 87 of CGST ACT, 2017 effective from 1.7.17 SECTION 87. Liability in case of amalgamation or merger of compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. (1) When two or more companies are amalgamated or merged in pursuance of an order of court or of Tribunal or otherwise and the order is to take effect from a date earlier to the date of the order and any two or more of such companies have supplied or received any goods or services or both to or from each other during the period commencing on the date from which the order takes effect till the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of the order, then such transactions of supply and receipt shall be included in the turnover of supply or receipt of the r espective companies and they shall be liable to pay tax accordingly. (2) Notwithstanding anything contained in the said order, for the purposes of this Act, the said two or more companies shall be treated as distinct companies for the period up to the date of the said ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and the registration certificates of the said companies shall be cancelled with effect from the date of the said order. - Reply By Sadanand Bulbule - The Reply = Dear querist Experts' clarification is on the right side. You may go with it. - Reply By Sadanand Bulbule - The Reply = Dear all It is pertinent to note the following: It is documented in the Legal and Constitutional history of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia (first published in 1984) authored by Hon ble Justice M. Rama Jois that, since 3rd Century liability always follows with the transfer of property. Meaning, the assets and liabilities go together in the given circumstances. There is no scope for cherry-picking by the transferee. So the same ratio has been adopted in almost all the relevant statutes in changed terms. Both Section 85 87 of the CGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Act comprise the said principle. - Reply By Amit Agrawal - The Reply = My understanding of the factual position from the query: Company ABC has been merged with Company XYZ, resultant Co. (i.e. post-merger) is either third Co. or XYZ and thereby, ABC become non-existent. If my above understanding of the factual position is correct, Dept. cannot issue SCN upon ABC post-merger as ABC does not lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly exist as on date of issuance of the SCN. And such SCN has to be issued upon resultant Co. post merger ( which is either third Co. or XYZ, as per facts of merger involved ). These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. - Reply By KASTURI SETHI - The Reply = The fact of merger cannot obliterate or extinguish the righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and liabilities of the transferor company---------CESTAT Bangalore in the case of LANCO INDUSTRIES LTD . - 2007 (11) TMI 147 - CESTAT, BANGALORE - Reply By Pradeep Reddy - The Reply = ABC will loose its existence after merger, therefore SCN cannot be issued to ABC. Issuance of SCN to XYZ is as good as issuance to erstwhile ABC. Typically, department issues to SCN to resultant entity i.e. XYZ wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the phrase formerly ABC - Reply By KASTURI SETHI - The Reply = There is no ambiguity or confusion in the CGST Act and Company Act . Otherwise also the phrase , 'formerly known as' is misfit here. Disclaimer : These are my personal views and meant for education purpose only and not meant for any court proceedings. - SCN to merged company - Query Started By: - Bhavesh Suthar Dated:- 12- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-2024 Last Replied Date:- 18-9-2024 Goods and Services Tax - GST - Got 9 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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