The Bombay High Court has dismissed a GST order against Kanakia Spaces Realty Pvt Ltd. It said that a GST SCN was issued when it came to know about the non-existence of the company pursuant to its amalgamation, which was without jurisdiction, making the proceedings that followed legally unsustainable.
A division bench of Justice Suman Shyam and Justice Advait M. Sethna permitted the writ petition submitted by Kanakia Spaces Realty Private Limited and overturned the Order-in-Original passed by the GST authorities.
The bench said that, “Consequently, we hold that any show cause notice issued to an 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.”
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The case has emerged 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. Post-merger, Kanakia Supremo Construction was dissolved and ceased to exist.
Although the tax department had been notified about the amalgamation, it issued an SCN in June 2025 in the name of the dissolved company. Subsequently, an Order-in-Original dated December 31, 2025, confirmed a GST demand of ₹42.65 crore, including interest and penalties.
The judges acknowledged that there was no dispute regarding the fact that the transferor company had ceased to exist and that the department was aware of the amalgamation. The question before the court was whether proceedings initiated with an SCN issued to a non-existent company could continue.
The bench quoted 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. It concluded that the notice was issued without jurisdiction. It therefore overturned the Order-in-Original, while specifying that it had not analysed the merits of the GST demand.
| Case Title | Kanakia Spaces Realty Pvt Ltd Vs Union of India |
| Case No. | Writ Petition No. 2586 of 2026 |
| Petitioner | Mr Prakash Shah, Mr Mohit Raval |
| Respondents | Mr S. Chandrashekhar, Abhishek Mishra, Mr Amar Mishra |
| Bombay High Court | Read Order |
