Case Law Details
Tirumala Balaji Marbles And Granites Vs Assistant Commissioner St and Others (Andhra Pradesh High Court)
In the case of Tirumala Balaji Marbles And Granites vs. Assistant Commissioner (ST) & Others, the Andhra Pradesh High Court ruled that GST registration cannot be denied solely on the basis that the applicant belongs to another state. The petitioner applied for GST registration under the AP Goods and Services Tax Act, 2017, for a business located in Rajamahendravaram. However, the application was rejected on November 4, 2024, by the tax authorities on the grounds that neither the petitioner nor the authorized representative was from Andhra Pradesh, citing potential tax evasion risks. The petitioner challenged this decision, arguing that the rejection was not supported by any legal provision.
The High Court held that the refusal of GST registration was unjustified, as there is no statutory restriction preventing a person from another state from registering a business in Andhra Pradesh. The court emphasized that Article 19 of the Indian Constitution guarantees the right to conduct business across the country, and mere apprehension of tax evasion is not a valid reason for rejection. Consequently, the court set aside the rejection order and directed the authorities to grant GST registration to the petitioner. However, the authorities retain the right to monitor the petitioner’s tax compliance and business activities to prevent potential tax evasion. This ruling reinforces the principle that tax administration must follow statutory provisions and not impose arbitrary restrictions on businesses.
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
Heard Sri Anil Bezawada, learned counsel appearing for the petitioner, learned Government Pleader for Commercial Tax appearing for respondents 1 and 2 and learned Deputy Solicitor General appearing for respondent No.3.
2. The petitioner sought registration under A.P. Goods and Services Tax Act, 2005 (for short ‘the Act’) for its place of business situated in Rajamahendravaram. This application, dated 19.10.2024, was rejected by the 1st respondent by an order dated 04.11.2024. The ground, given for such rejection, was that the applicant does not belong to Andhra Pradesh and the authorized representative, put forward by the petitioner, does not belong to the State of Andhra Pradesh. Aggrieved by the said order of rejection, the petitioner had approached this Court by way of the present writ petition.
3. The learned Government Pleader for Commercial Tax, on instructions, submits that the registration was refused on the ground that there would be any amount of scope for tax evasion, as none of the responsible persons are from the State of Andhra Pradesh.
4. Though the apprehension of the respondents may not be misplaced, it would not mean that registration can be refused on a ground, which is not available under the Statute or the Rules. There do not appear to be any restriction for persons outside the State to come into the State of Andhra Pradesh and seek registration under the APGST Act.
5. Mere apprehension, however well founded, cannot deprive the petitioner of his right to carry on trade and business in the State of Andhra Pradesh. It is also necessary to notice that Article 19 of the Constitution of India, grants every citizen of this Country, the right to set up and do business anywhere in the country. In such circumstances, the order of rejection is clearly without any basis in law.
6. Accordingly, this writ petition is allowed and the order of rejection dated 04.11.2024 is set aside. The respondents are directed to register the petitioner under the APGST Act. However, it would be open to the respondents to take such steps, as they deem fit, to monitor the returns of the petitioner and to verify the business activities of the petitioner, for ensuring that there will be no tax evasion. There shall be no order as to costs.
As a sequel, pending miscellaneous applications, if any, shall stand closed.
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