IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 24-03-2025 CORAM THE HONOURABLE MR JUSTICE KRISHNAN RAMASAMY WP No. 553 of 2025 AND WMP NO. 667 OF 2025,WMP NO. 666 OF 2025 M/s Gus Clothing Company now known as M/s Gus Clothing Private Limited Rep.by its Managing Director Sri.G.Umashankar, No.2/547 1st Floor, Uthukuli Road, Sarkar Periyapalayam, Tiruppur 641607 Petitioner(s)

Vs

1. The Assistant Commissioner (ST)

Chennimalai Assessment Circle S.F. No

400 / 1, 7, 8, 46 Pudhur, “B” village Ring Road, Erode 638 002.

2.The Deputy Commissioner (ST)(GST)Appeal Erode and Salem Integrated New Commerical Taxes Building 3rd Floor, SF No.400/1, 7,8, No.46, Pudhur B-Village, Erode 638002 Respondent(s)

PRAYER:-Writ Petition filed under Article 226 of the Constitution of India, pleased to issue a Writ of Certiorari, to call for the records of the first respondent in GSTIN 33AADFG1109M1ZP/ 2019-20 dated 31/08/2024 and the consequential order of rejection of appeal by the second respondent in ROC No.4080/2024/A1 dated 09/12/2024 and quash the same.

For Petitioner(s): Mr.Raveendran B For Respondent(s): Mr.C.Harsha Raj, Special Government Pleader (t)

ORDER

This writ petition has been filed by the petitioner seeking to call for the records of the first respondent in GSTIN 33AADFG1109M1ZP/ 2019-20 dated 31/08/2024 and the consequential order of rejection of appeal by the second respondent in ROC No.4080/2024/A1 dated 09/12/2024 and quash the same.

2.Learned counsel for the petitioner would submit that earlier the petitioner was a partnership firm and it was converted as Private Limited Company from 11.02.2022. Subsequent to the conversion, the 1st respondent issued show cause notice dated 21.05.2024 for the assessment year 2019-20 in the name of the partnership firm. Though the petitioner replied to the show cause notice dated 21.05.2024, stating that the partnership firm is not in existence, the 2nd respondent had passed the impugned assessment order dated 09.12.2024 in the name of the partnership firm. Since the firm is not in existence, the petitioner could not file an appeal through GST portal. Therefore, the petitioner filed an appeal manually before the 2nd respondent. However, the 2nd respondent refused to entertain the appeal since it was filed manually. He would further submit that the assessment orders passed in the name of the partnership firm pertaining to the assessment years 2017-18, 2018-19 and 2020- 21 was challenged before this Court in W.P.Nos.8290, 8294 and 8297 of 2024 and this Court vide order dated 22.04.2024 set aside the same.

3.For better appreciation, the relevant portion of the order dated

22.04.2024 passed by this Court in W.P.Nos.8290, 8294 and 8297 of 2024, is reproduced hereunder:-

“2. Learned counsel for the petitioner referred to the certificate of incorporation dated 11.02.2022 and to the memorandum and articles of association of the company. He points out that the partnership firm was converted into a private limited company in 2022. He also points out that proceedings against the partnership firm, which was no longer in existence, were initiated pursuant to show cause notice dated 23.09.2023 and that the impugned orders were issued on 27.12.2023.

3. Mr.C.Harsha Raj, learned Additional Government Pleader, countered these submissions. By referring to Section 85 of applicable GST enactments, he submits that both the transferor and transferee are jointly and severally liable in respect of liabilities accruing up to the date of transfer. Therefore, he submits that the respondent was entitled to proceed against the partnership firm.

4. Sub-section (1) of Section 85 applies to transfers, whether by way of sale, gift, lease, leave and licence or in any other manner, wherein the transferor and transferee continue in existence. By contrast, when the transferor ceases to exist as a result of merger with the resulting entity, proceedings would only lie against the resulting entity. In this case, the documents on record indicate that the