Facts of the case:

In this case, the petitioner-company, engaged in supplying agricultural-use products, was subjected to proceedings under Section 74 of the UPGST Act, 2017 for FY 2017-18 to 2020-21 concerning valuation of stock transfers, classification of “light traps” used in agriculture and RCM liability on freight and legal expenses. Orders were passed by the adjudicating authority and the company preferred four appeals before the Additional Commissioner (Appeals), Kanpur. During pendency of these appeals, the NCLT, Hyderabad, passed a winding-up order on 07.03.2025 and appointed a liquidator. The fact of winding-up was communicated to the appellate authority, along with a request to keep the appellate proceedings in abeyance. However, the appellate authority proceeded to pass four orders dated 10.11.2025 rejecting the appeals.

The petitioner challenged these orders, contending that after winding-up, the company could be represented only through the liquidator and that the pending proceedings could not have been proceeded with without compliance with Section 279 of the Companies Act, 2013.

Issue:

Whether GST appeals pending against a company could be proceeded with and decided after the company had been ordered to be wound up, without obtaining the leave of the Tribunal and without issuing notice to or hearing the liquidator, particularly in view of Section 279 of the Companies Act, 2013?

Held That:

The Allahabad High Court noted that the winding-up of the petitioner-company on 07.03.2025 and appointment of the liquidator were undisputed. The Court examined Section 279(1) of the Companies Act, which provides that once a winding-up order has been passed, no suit or other legal proceeding shall be commenced, or, “if pending at the date of the winding up order, shall be proceeded with”, by or against the company except with the leave of the Tribunal. The Court specifically rejected the Revenue’s broad contention that Section 279 was confined only to fresh proceedings, observing that the legislature had consciously used the words “if pending”, which could not be treated as superfluous.

The Court also recognised that after winding-up and appointment of the liquidator, the question as to who was competent to represent the company and appoint counsel to prosecute the pending GST appeals was a material issue. The Court, however, did not finally determine the entire controversy concerning the scope of Section 279. Instead, it proceeded on the undisputed position that the appellate orders had been passed ex parte and without hearing the petitioner, and the Revenue itself supported remand of the matter.

Accordingly, the Court set aside all four appellate orders dated 10.11.2025 relating to FY 2017-18 to 2020-21 and remitted the matters to the appellate authority for fresh adjudication. The petitioner was directed to communicate the Court’s order to the liquidator, while the appellate authority was directed to issue notice to the liquidator within one month and provide at least three weeks’ advance notice of personal hearing. Fresh orders were thereafter to be passed after hearing the parties. The Court expressly clarified that it had not examined the merits of the underlying GST liability and that the appellate authority must decide the appeals independently in accordance with law.

Case Name: M/s Nagarjuna Agro Chemicals Pvt. Ltd. Versus State of U.P. And 2 Others dated 07.09.2026

Citation No. 2026 Taxo.online 2688