Show Cause Notice issued to a non-existent amalgamated company is void ab initio and cannot be saved by Section 87 of the CGST Act

Last updated: 27 August 2026

Save Share

Quick Summary

The Bombay High Court has ruled that a Show Cause Notice issued to a company that no longer exists due to amalgamation is void from the outset. The court found that Section 87 of the CGST Act does not permit the tax department to issue such notices to non-existent entities after a merger. Consequently, the original order confirming a GST demand of over Rs. 42 crores, based on this invalid notice, was set aside.

Court :
Bombay High Court

Brief :
The Hon’ble Bombay High Court in the case of Kanakia Spaces Realty Private Limited v. Union of India & Ors. [Writ Petition No. 2586 of 2026 dated June 24, 2026] set aside the Order-in-Original confirming a GST demand of Rs. 42.65 crores which was passed on the basis of a Show Cause Notice issued under Section 74 of the Central Goods and Services Tax Act, 2017 ( “the CGST Act” ) in the name of a company that had ceased to exist upon its amalgamation, and held that a Show Cause Notice issued to a non-existent entity is without jurisdiction and the entire proceedings initiated thereunder are vitiated and rendered void ab initio. It was further held that Section 87 of the CGST Act operates only for the intervening period from the date on which the amalgamation order takes effect till the date of the order, and in no manner confers authority on the Department to issue a Show Cause Notice on a non-existent entity post merger/amalgamation.

Citation :
Writ Petition No. 2586 of 2026 dated June 24, 2026

Daily Limit Reached

You have reached your daily limit of 2 Free Judgements

Subscribe to CCI PRO for unlimited access

Why Upgrade to CCI PRO?

No Ads
WhatsApp Community
Daily E-Newsletter
Unlimited Judgements Access
Profile Visitors
Link Social Profiles
Featured Job Posts
Pro Badge
Expert GST Guidance
Unlimited Forum Replies
Download Content in PDF

1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

BEST VALUE

3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

View all CCI PRO benefits

Already a PRO member? Login here for an ad-free experience. 07941056694

Attached File : 671907_6103_15_kanakia_spaces_realty_private_limited.pdf

downloaded 104 times

204 Views Comment Share GST Report

Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

View Judgements

Comments