Bombay High Court
Omkar Pravin Harlekar vs Deputy Commissioner Of Sales Tax on 19 January, 2026
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
2026:BHC-OS:2021-DB 10.WP4535_2022.DOC
Vidya Amin
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 4535 OF 2022
Omkar Pravin Harlekar ... Petitioner
versus
1. Deputy Commissioner of Sales Tax
2. IDBI Bank Ltd. ... Respondents
_______
Ms. Rajani Mishra for the petitioner.
Mr. Himanshu Takke, AGP for the State.
_______
CORAM: G. S. KULKARNI &
AARTI SATHE, JJ.
DATE: 19 January, 2026
P.C.
1. Rule, made returnable forthwith. By consent of the parties, heard finally.
2. This petition under Article 226 of the Constitution of India challenges the action of the respondent of freezing the petitioner's bank account purportedly to recover the tax dues ,which were payable by one Urdhwa Chemicals Company Pvt. Ltd. (for short "Urdhwa Chemicals") under an assessment order dated 7 December, 2021 passed against the said company. At the outset, we note the prayers as made in the petition, which reads thus:
"a) That this Hon'ble Court may kindly be pleased to issue a Writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or directions to the respondent authorities to immediately lift the attachment on Bank Accounts being A/c. No. 661104000004008 maintained with IDBI Bank, Badlapur Branch.
b) That this Hon'ble Court may kindly be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or directions to quash and set aside the impugned notice/communication dated 15.09.2022 (at Exhibit-D) and further be pleased to declare that the petitioner is not liable for the dues of M/s.Page 1 of 8
10.WP4535_2022.DOC Urdhwa Chemicals Company Pvt. Ltd. now amalgamated with M/s. Omkar Speciality Chemicals Ltd.
c) That this Hon'ble Court may kindly be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or directions to restrain the respondent-authorities to initiate any other recovery actions against the petitioner for alleged dues of M/s. Urdhwa Chemicals Company Pvt. Ltd. now amalgamated with M/s. Omkar Speciality Chemicals Ltd.
d) That this Hon'ble Court may kindly be pleased during the pendency and final disposal of the present petition, be pleased to direct the respondent authorities to restrain from taking any coercive steps and not to recover any amount from Bank Accounts being A/c. no. 661104000004008 maintained with IDBI Bank, Badlapur Branch and further be pleased to lift the attachments on aforementioned accounts."
3. The facts lie in a narrow compass: It is the petitioner's case that the petitioner was a Director of M/s. Omkar Specialty Chemicals Ltd. (OSCL) from 1 June, 2007 to 2 May, 2017. The petitioner has contended that Urdhwa Chemicals was amalgamated with M/s. Omkar Specialty Chemicals Limited by virtue of the order dated 13 April, 2017 passed by National Company Law Tribunal (NCLT), a copy of which is annexed as Exhibit 'A' to the petition.
4. Our attention is drawn to the appointed date as incorporated in the composite scheme of amalgamation as set out in Clause 1.3 is 1 April, 2015. It is the petitioner's case that as a consequence/post amalgamation, the petitioner resigned as a whole-time Director on 2 May, 2017 and an appropriate intimation to that effect was also submitted as per the procedure to the Registrar of Companies. Copy of the resignation letter is annexed to the petition.
5. It is also the petitioner's case that the amalgamated company OSCL had approached the National Stock Exchange and Bombay Stock Exchange with an application for reclassification and terming the petitioner as a Public Share holder Page 2 of 8
10.WP4535_2022.DOC instead of Promoter Shareholder and the same was approved by the said entities vide Approval Letters dated 26 July, 2018. The petitioner contends that thus, between the years 2017 to 2022, the things were smooth, however, on 22 September, 2022, the petitioner received an intimation from the IDBI Bank, where the petitioner is holding the bank account in question, to the effect that a communication dated 15 September, 2022 from the respondent, that the bank account of the petitioner be freezed as per the provisions of Section 33(1) of the Maharashtra Value Added Tax Act, 2002 (MVAT), which was to recover the tax dues of erstwhile Urdhwa Chemicals, in respect of which an assessment order dated 7 December, 2021 was passed. On such backdrop, the petitioner made a representation that the petitioner's bank account has been wrongfully attached and freezed for recovery of dues of a non-existent company, which stood amalgamated with OSCL and more particularly, when the petitioner had already resigned in the year 2017. The petitioner contended that the said action on the part of the respondent was not supported under any provisions of MVAT. It is in these circumstances, this Writ Petition is filed seeking the reliefs as noted by us hereinabove.
6. Reply affidavit has been filed on behalf of respondent no. 1 of Smt. Sunita S. Thorat, Joint Commissioner of State Tax, GST Office justifying the action taken. The reply affidavit primarily contends that there were tax dues as payable by Urdhwa Chemicals and by taking recourse to the provisions of Section 44(6) of MVAT, 2002, the respondent was justified in issuing the impugned notice for Page 3 of 8
10.WP4535_2022.DOC recovery of the outstanding tax as payable by Urdhwa Chemicals. It is on such backdrop, we have heard learned counsel for the parties.
7. Learned counsel for the petitioner has made extensive submissions. He would submit that in issuing the impugned notice dated 15 September, 2022, the basic aspects which have been overlooked by the respondent are two-fold - firstly, that Urdhwa Chemicals, since 13 April, 2017 is no more an existing company, hence an action of recovery of the alleged dues payable by the non-existing company itself was unsustainable and secondly, the petitioner after having resigned, in any event, could not be said to have any concern in the said entity. This apart, it is submitted that there was no show cause notice and directly an action was resorted in the bank account of the petitioner.
8. Learned AGP, however, has supported the impugned order on the basis of the reply affidavit as filed and more particularly relying on the provisions of Section 44(6) of the MVAT.
9. We have heard learned counsel for the parties. With their assistance, we have perused the record.
10. At the outset, we may observe that the impugned action of freezing of the petitioner's bank account vide notice dated 15 September, 2022 addressed to the IDBI Bank was resorted to realize the tax dues which were payable by Urdhwa Chemicals under the assessment order dated 7 December, 2021 passed under Section 23 of MVAT. We find substance in the contentions as urged on behalf of Page 4 of 8
10.WP4535_2022.DOC the petitioner that on the day the assessment order was passed, Urdhwa Chemicals itself was a non-existing entity, being amalgamated with Omkar Specialty Chemicals Ltd. by order dated 13 April, 2017 passed by the NCLT, Mumbai. As noted above, the appointed date as agreed in the scheme of amalgamation was 1 April, 2015 and thus, necessarily by virtue of the said agreement, the tax liability itself could not be the tax liability of Urdhwa Chemicals but of Omkar Specialty Chemicals Ltd. However, admittedly the impugned action of freezing of the petitioner's bank account was resorted to enforce an order passed against Urdhwa Chemicals, a non-existing company. Also, the petitioner had resigned as a Director on 2 May, 2017, hence qua the assessment order, which is for the period 2016-17 and 2017-18, the petitioner in any event could not be held liable for discharging the tax debt of the said company, as by virtue of the amalgamation order, such liability itself could not have been attributed to Urdhwa Chemicals. The law in regard to the assessment order being passed against a non-existing entity is well- settled. In such context, we may refer to the decision of the Division Bench of this Court of which one of us (G. S. Kulkarni, J.) was a member in Uber India Systems Pvt. Ltd. vs. Assistant Commissioner of Income-tax & Ors. 1. In the said case, one Uber India Research and Development Private Limited stood amalgamated with the petitioner (Uber India Systems Pvt. Ltd.) by virtue of an order passed by the National Company Law Tribunal (NCLT) approving a scheme of amalgamation between the said entities. Despite such amalgamation, a notice was issued under Section 148A(b) of the Income-tax Act, 1961 alleging that the income chargeable 1 (2025) 483 ITR 771 Page 5 of 8
10.WP4535_2022.DOC to tax had escaped assessment within the meaning of Section 147 of the Income- tax Act. In such context, the Court, referring to the decision of the Supreme Court in Pr. CIT v. Maruti Suzuki India Ltd. 2 and the decision of this Court in Teleperformance Global Services Pvt. Ltd. v. Asst. CIT 3 while allowing the petition, made the following observations:-
"11. Now coming to the challenge to the impugned notice as raised by the petitioner. Having perused the record as also the decisions as relied upon by Mr. Mistri, we are persuaded to accept Mr. Mistri's contentions that respondent No. 1 could not have issued the impugned notices under section 148A(b) and pass an order thereon under sub- section (d), as also issue notice under section 148 of the Act to the assessee as it was a non-existent entity. In such context, Mr. Mistri's reliance on the decision of the Supreme Court in Pr. CIT v. Maruti Suzuki India Ltd. is apposite. In such decision the Supreme Court has held that once the amalgamating company had ceased to exist as a result of the scheme of amalgamation approved by the National Company Law Tribunal, there was no warrant in law for the Assessing Officer to proceed against a non-existent company. The relevant observations of the Supreme Court in the said decision are required to be noted which reads thus (page 637 of 416 ITR):
"33. In the present case, despite the fact that the Assessing Officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in CIT v. Spice Enfotainment Ltd. on November 2, 2017. The decision in CIT v. Spice Enfotainment Ltd. has been followed in the case of the respondent while dismissing the special leave petition for the assessment year 2011-2012. In doing so, this court has relied on the decision in CIT v. Spice Enfotainment Ltd."
12. The decision of the Supreme Court in Pr. CIT v. Maruti Suzuki India Ltd. is followed by a co-ordinate Bench of this court to allow Teleperformance Global Services Pvt. Ltd. v. Asst. CIT, the facts therein being identical to the case in hand. The relevant observations of this court in the decision of Teleperformance Global Services Pvt. Ltd. v. Asst. CIT are required to be noted which read thus (page 733 of 435 ITR):
"The Supreme Court in the case of Pr. CIT v. Maruti Suzuki India Ltd. had considered that income, which was subject to be charged to 2 (2019) 416 ITR 613 (SC) 3 (2021) 435 ITR 725 (Bom) Page 6 of 8
10.WP4535_2022.DOC tax for the assessment year 2012-2013 was the income of erstwhile entity prior to amalgamation. The transferee had assumed the liabilities of the transferor company, including that of tax. The consequence of approved scheme of amalgamation was that the amalgamating company had ceased to exist and on its ceasing to exist, it cannot be regarded as a person against whom assessment proceeding can be initiated. In the said case before notice under section 143(2) of the Act was issued on September 26, 2013, the scheme of amalgamation had been approved by the High Court with effect from April 1, 2012. It has been observed that the assessment order passed for the assessment year 2012-2013 in the name of non- existing entity is a substantive illegality and would not be procedural violation of section 292B of the Act.
The Supreme Court in its aforesaid decision, has quoted an extract from its decision in Saraswati Industrial Syndicate Ltd. v. CIT. The Supreme Court has also referred to the decision of the Delhi High Court in the case of CIT v. Spice Enfotainment Ltd. and observed that in its decision the Delhi High Court had held that assessment order passed against non-existing company would be void. Such defect cannot be treated as procedural defect and mere participation of the appellant would be of no effect as there is no estoppel against law. Such a defect cannot be cured by invoking the provisions under section 292B. The Supreme Court had also taken note of the decision in CIT v. Spice Enfotainment Ltd. which was followed by the Delhi High Court in matters, viz., CIT v. Dimension Apparels Pvt. Ltd., CIT v. Micron Steels Pvt. Ltd., CIT v. Micra India Pvt. Ltd. and in CIT v. Intel Technology India Pvt. Ltd., the Karnataka High Court has held, if a statutory notice is issued in the name of non-existing entity, the entire assessment would be a nullity in the eyes of law. It has also been so held by the Delhi High Court in the case of Pr. CIT v. Nokia Solutions and Network India Pvt. Ltd. (formerly known as Nokia Siemens Network Pvt. Ltd.)."
13. In the light of the above discussion, we are of the clear opinion that there was neither a legal basis nor jurisdiction with respondent No. 1 to issue the impugned notice under section 148A(b) and pass an order thereon and further to issue the impugned notice under section 148 to a non-existing entity-"Uber India Research and Development Private Limited". Such notices at the threshold were illegal, invalid and non est."
11. In this view of the matter, on the basic premise as noted by us above, the freezing of the bank account of the petitioner cannot be sustained. This apart, this is a case where the respondent has clearly erred in taking recourse to provisions of sub-section (6) of Section 44, inasmuch as sub-section (6) would be applicable in regard to the liability to pay taxes only in respect of a private company, whether Page 7 of 8
10.WP4535_2022.DOC existing or not or under liquidation. It would certainly not cover a situation as in the present case where the company has stood amalgamated with another entity and when it is available for the tax authorities to proceed against the new amalgamated entity. Thus, even taking recourse to sub-section (6) of Section 44, no action could have been taken. For convenience, it would be imperative to note the provisions of Section 44(6), which reads thus:
"44. Special provision regarding liability to pay tax in certain cases.--
(1) Where a dealer, liable to pay tax under this Act, dies then,--
...............
(6) Subject to the provisions of the Companies Act, 2013 (18 of 2013), where any tax or other amount recoverable under this Act from a private company, whether existing or wound up or under liquidation, for any period, cannot be recovered, for any reason whatsoever, then, every person who was a director of the private company during such period shall be jointly and severally liable for the payment of such tax or other amount unless, he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the said company."
12. In the light of the above discussion, the petition needs to succeed. It is allowed in terms of prayer clauses (a) to (d).
13. Rule is made absolute in the above terms. No order as to costs.
(AARTI SATHE, J.) (G. S. KULKARNI, J.)
Signed by: Vidya S. Amin
Designation: PS To Honourable Judge Page 8 of 8
Date: 23/01/2026 17:54:36