Input Tax Credit can be transferred post-amalgamation between companies in different states, as no statutory restrictions exist on such transfers under the CGST Act, emphasizing legislative intent to support seamless transactions.

JUDGMENT :

BHARATI DANGRE, J.

1. The Petition filed by the Umicore Autocat India Private Limited has raised a challenge to the action of the Respondents in restricting the transfer of the un-utilized Input Tax Credit [ITC] on account of merger/amalgamation, under Section 18 (3) of the Central Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act, 2017 for short] on the ground that the transfer is prohibited where it involve two distinct States.

The Petitioner, therefore, seeks a direction to the Goods and Services Tax Network [Respondent No. 2] to allow the transfer of credit between the Transferor and the Petitioner Company that neither Section 18 (3) of the CGST Act 2017 nor Rule 41 of the CENTRAL GOODS AND SERVICES TAX RULES , 2017 [hereinafter referred to as the CGST Rules of 2017, for short], impose any such restriction.

2. We have heard Counsel Mr. Avinash Poddar for the Petitioner. The learned Advocate General Mr Pangam, along with Mr. Priolkar, would represent the State Tax Officer [Respondent No. 5] whereas Respondent Nos. 1 to 4 and 6 are represented by Advocate Ms. Asha Desai.

Since the Petition is taken up for hearing at the stage of admission, we deem it appropriate to issue ‘Rule’, which is made returnable forthwith.

3. The Petitioner, a Private Limited Company situated and registered in the State of Maharashtra was formed in the wake of the scheme of amalgamation approved by the National Company Law Tribunal, Special Bench, Mumbai, [NCLT], by an order dated 26.05.2020, thereby according its sanction under Sections 230 to 232 of the COMPANIES ACT , 2013 to the scheme of amalgamation of Umicore Anandeya India Private Limited (Transferor Company) with Umicore Autocat India Private Limited (Transferee Company).

The Transferor, a manufacturing Company of zinc oxide has its manufacturing plant located at Sancole Industrial Estate, Goa whereas the Transferee Company is engaged in manufacturing automotive catalyst and has its manufacturing plant located in Shirwal, State of Maharashtra.

Both the Companies being part of Umicore Group engaged in material technology and recycling industry had a global presence and the scheme of amalgamation was approved in the backdrop of the fact that the manufacturing business and operations of the Umicore Group in India being carried out through the Transferee Company [Umicore Autocat India Private Limited], the Transferor Company [Umicore Anandeya India Private Limited], had ceased its operations and was non-operational for three years.

The NCLT on appreciating the scheme, which in its opinion was fair and reasonable and not violating any provision or affecting the public interest, sanctioned the scheme of amalgamation, by declaring the appointed rate of scheme as on 01.04.2019 and the Transferor Company was dissolved without winding up.

4. The Transferor Company, Umicore Anandeya India Private Limited with its principal place of business at Sancole at Zuari Nagar, South Goa, was registered and was issued a registration certificate under Rule 10(1) of the CGST Rules of 2017 as a ‘Private Limited Company’ from 01.07.2017. On the other hand, the Transferee Company, Umicore Autocat India Private Limited (The Petitioners) also received registration as a ‘Private Limited Company’ under the provisions of the Maharashtra Goods and Services Tax Act, 2017.

5. A