The Rajasthan High Court ruled that any GST orders issued in the name of a company that no longer exists due to amalgamation are legally unsustainable. This decision came in the case involving Larsen and Toubro Ltd. (L&T) and the Union of India, where L&T had merged its subsidiary, L&T Hydrocarbon Engineering Ltd. (LTHE), effective from April 1, 2021, with approval from the NCLT. Despite notifying the GST authorities about the merger, GST adjudication orders were still issued in the name of the now non-existent LTHE in December 2023 and August 2024.
L&T argued that issuing orders in the name of a defunct entity constitutes a jurisdictional defect, referencing the precedent set in Principal Commissioner of Income Tax v. Maruti Suzuki (India) Ltd. The Revenue defended its actions by stating that the GST registration for LTHE had not been formally cancelled under Sections 28 and 29 of the CGST Act, which forced them to issue orders under the old registration.
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The Court concluded that once a company is amalgamated and ceases to exist, any order passed in its name is fundamentally flawed. It emphasized that upon notification of a merger, the GST registration of the amalgamated entity should be deemed cancelled, even without a formal cancellation under Section 29. The GST framework should automatically adapt to such changes, and the new entity’s GST number should be used for all proceedings. The Court directed the Revenue to re-upload the orders under L&T's valid GST number, ensuring that limitation periods do not hinder remedies under Section 75(3) of the CGST Act.
Order Date - 13 February 2026
Parties: Larsen And Toubro Ltd. Vs Union Of India, Through The Secretary, Goods And Services Tax Council, Through Its Chairperson, State Of Rajasthan, Through Commissioner, Commercial Taxes and Deputy Commissioner (Goods And Service Tax, Rajasthan)
Facts -
- Larsen and Toubro Ltd., after amalgamating its subsidiary L&T Hydrocarbon Engineering Ltd. (LTHE) pursuant to NCLT approval effective from 01.04.2021, informed the GST authorities about the merger.
- Despite the merger, GST adjudication orders dated 28.12.2023 and 06.08.2024 were issued in the name of LTHE, a company that had already ceased to exist.
- The petitioner argued that passing orders in the name of a non-existent entity is a jurisdictional defect, relying on Principal Commissioner of Income Tax v. Maruti Suzuki (India) Ltd..
- The Revenue contended that since the old GST number had not been formally cancelled under Sections 28 and 29 of the CGST Act, it was constrained to issue orders on that registration.
Issue -
- Whether GST orders passed in the name of a non-existent amalgamated company are valid when its GST registration was not formally cancelled?
Order -
- The Court held that once a company ceases to exist due to amalgamation, any order passed in its name suffers from a fundamental jurisdictional defect.
- Upon intimation of merger, the earlier GST registration must be treated as deemed cancelled, even if no formal cancellation order was issued under Section 29.
- The GST framework should automatically recognize such mergers, and the new entity’s GST number must become operational for all proceedings.
- The Court directed the Revenue to upload the impugned orders under the petitioner’s valid GST number, clarifying that limitation would not bar remedies under Section 75(3) of the CGST Act.
