Amit Kumar Basau & Anr. Vs Sales Tax Officer (Delhi High Court)
The Delhi High Court, in Amit Kumar Basau & Anr. Vs Sales Tax Officer, ruled that an unregistered partnership firm is not barred from filing a writ petition to enforce its statutory or common law rights, despite the restrictions imposed by Section 69(2) of the Indian Partnership Act, 1932. This determination upheld the maintainability of the writ petition filed by Mr. Amit Kumar Basau, a partner in the unregistered firm M/s Basau Construction (India), challenging a high-value GST demand.
The Issue of Maintainability
The petitioners challenged an impugned show cause notice (SCN) dated November 27, 2024, and a subsequent order dated February 20, 2025, which raised a total tax, interest, and penalty demand of over Rs. 1.09 crore for the financial year 2020-21. The petition also challenged related GST notifications, the legality of which was pending before the High Court in a separate lead matter (Sarens Heavy Lift India Private Limited v. Sales Tax Officer).
A preliminary objection was raised by the Respondent (Sales Tax Officer) regarding the petition’s maintainability, citing that the firm, M/s Basau Construction (India), was unregistered.
Statutory Bar and Judicial Precedents
The court acknowledged the bar set forth in Section 69(2) of the Indian Partnership Act, 1932, which stipulates that an unregistered firm cannot institute a suit to enforce a right arising from a contract against any third party.
