No, the Hon’ble Gujarat High Court in Pratik Surendra kumar Shah v. State of Gujarat & Anr. [2025 TAXONATION 1472 (GUJARAT)] held that proceedings under the GST Act cannot be sustained against a company that has been dissolved under NCLT orders and ceased to exist in the eyes of law. In this case, the petitioner was a former director of M/s Zeb IT Service Ltd., a company engaged in virtual currency trading, which voluntarily went into liquidation and was formally dissolved by the NCLT on 30.09.2022. The GST registration was cancelled with effect from 13.11.2020. Despite this, the department issued show cause notices under Section 73 for FY 2017–18 and 2018–19, followed by adjudication orders dated 28.12.2023 and 16.04.2024, and even recovery notices. The petitioner replied, highlighting that the company was no longer in existence and furnished the NCLT dissolution order. However, the department proceeded to raise demands on the ground that relevant supporting documents to defend the tax issues were not furnished, and cited Section 29(3) of the CGST Act to argue that dissolution or cancellation of registration does not affect the liability for prior periods.
The High Court categorically held that once a company stands dissolved by the NCLT, any proceeding initiated thereafter in its name is without jurisdiction and void ab initio. It relied on the Supreme Court's ruling in Maruti Suzuki India Ltd. (2020) 18 SCC 331, to reiterate that dissolved entities lose legal existence, and no demand or recovery can proceed against such a non-existent person. The Court found that the adjudicating authority had taken cognizance of the company's dissolved status but still proceeded to confirm demand mechanically, rendering the orders unsustainable for non-application of mind. Consequently, the Court quashed both adjudication orders and the related recovery proceedings.
Author’s Comments
This judgment reaffirms a settled but often overlooked principle in tax jurisprudence—you cannot proceed against a person or entity that does not exist in the eyes of law. Once a company has been formally dissolved by the NCLT, it is civilly and legally dead, and any proceedings, whether adjudication or recovery—initiated thereafter suffer from a fatal jurisdictional defect.
The Revenue’s attempt to justify its action by invoking Section 29(3)—that cancellation of registration doesn’t absolve prior liability—completely misses the point. Section 29(3) speaks to survival of liability, not to the continued legal existence of the entity against which proceedings are pursued. There’s a vast difference between holding a living registered entity liable and issuing notices to a non-existent one. The latter is a legal impossibility.
The Gujarat High Court rightly relied on the Supreme Court's decision in Maruti Suzuki India Ltd. to hold that proceedings against a dissolved company are void ab initio—not curable procedural defects, but jurisdictional nullities. Once the NCLT dissolution order is passed, the company vanishes from the corporate registry and ceases to be a legal person under law. Issuing notices, passing orders, or seeking recovery from such a non-existing entity is a non-starter.
This ruling also underscores the importance of identifying the correct “noticee.” Under Section 169 of the CGST Act, notice is not just a procedural formality but it is the very act that sets the law in motion. A notice issued to the wrong person, or to a non-existent person, fails to establish valid lis and vitiates the entire proceeding. The doctrine of natural justice and due process starts with—and stands on—valid service to a legally existing party.
A similar view was recently taken by the Delhi High Court in HCL Infosystems Ltd. v. Commissioner of State Tax, where notices issued in the name of an amalgamated company were quashed. There too, the Court emphasized that proceedings must align with legal identity, and ignoring corporate dissolution or merger is not just sloppy—it is unlawful.
GST Case Law Pratik Surendra kumar Shah v. State of Gujarat
Citation-2025 TAXONATION 1472 (GUJARAT)
Author- CA Ritesh Arora
SUBSCRIBE GST E-LIBRARY (INDIA'S HIGHEST GST CASE LAW DATA)
FOR MORE UPDATE ON GST/ IT JOIN OUR FREE WHATSAPP GROUP BY CLICKING ON THIS LINK https://chat.whatsapp.com/C8VB6F6VHme3A061UDQKhj
