Case Law Details
Bio Med Ingredients Pvt. Ltd. Vs Assistant Commissioner (ST) (Madras High Court)
In a recent verdict, the Madras High Court issued a directive in the case of Bio Med Ingredients Pvt. Ltd. against the Assistant Commissioner (ST) regarding the denial of GST registration. The court has mandated the GST Department to grant registration to the petitioner-company, emphasizing the need for property demarcation in case both the lessor and lessee operate in the same premises.
Background of the Case: Bio Med Ingredients Pvt. Ltd. filed an application for GST registration on two occasions, both of which were rejected. The rejection was based on the ground that both the lessor and lessee were running businesses in the same premises, which was deemed unacceptable.
Court’s Intervention: The petitioner contended that they operated on a three-acre land with a clear demarcation, and the rejection was erroneous. On a previous hearing, the court directed officials to conduct a physical verification to ascertain the nature of business operations and demarcation.
Verification Outcome: After the visit, the officials reported that two entities were indeed operating in the same premises, with separate GST numbers. The court, however, awaits the petitioner’s demarcation report to resolve the matter conclusively.
Court’s Directive: The Madras High Court has directed the GST Department to issue the GST registration number to Bio Med Ingredients Pvt. Ltd. within one week from the date of receipt of the court order. If the property is not demarcated, the petitioner is instructed to demarcate it within one week from the issuance of the GST number.
Conclusion: This legal development underscores the importance of proper documentation and demarcation in cases where both lessor and lessee share business premises. The Madras High Court’s directive seeks to ensure fairness in GST registration, requiring a clear separation of properties in cases of joint business operations. The court has set a follow-up date for reporting compliance and expects a demarcation report from Bio Med Ingredients Pvt. Ltd. by November 27, 2023. Stay tuned for further updates on this regulatory resolution.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
When the matter was taken up for hearing on an earlier occasion, i.e. on 13.10.2023, this Court has passed the following order:-
“This petition has been filed by the petitioner seeking to call for the records of the impugned order in Form – GSTREG05 in Ref. No.ZA330923068624C dated 15.09.2023 and quash the same.
2. Ms.Amrita Poonkodi Dinakaran, learned Government Advocate takes notice for the respondents.
3. Learned counsel for the petitioner submitted that the petitioner-Company initially submitted an application for GST registration on 31.07.2023 and the same was rejected by the 1st respondent without assigning any reason. Therefore, the petitioner Company once again applied for GST registration on 22.08.2023, which was also came to be rejected stating that both the lessor and lessee have been running business in the same premises, which was not acceptable.
4. She would further submit that the petitioner has been running its business in the same land which comprised to an extent of three acres. The respondents without conducting any physical verification had erroneously rejected the application of the petitioner Company and hence, the present writ petition has been filed.
5. Learned Government Advocate appearing for the respondents seeks some more time to get instructions and file counter.
6. Considering the above submissions, this Court directs the respondents to visit the petitioner Company and find out as to whether the petitioner is carrying on business separately in a portion of land or not and report the same before this Court in the next date of hearing.
7. Post the matter on 31.10.2023. “
2. The learned Government Advocate appearing for the respondents would submit that in compliance of the above said direction, the officials of the respondent-Department visited the petitioner’s place of business and during such visit they found that two persons have been carrying on their business in the same premises with two separate GST Numbers and there is no demarcation of the properties referred by the petitioner.
3. Refuting the same, learned counsel for the petitioner would submit that though in the place, where, the petitioner is going to conduct the business, exists some other Company being run by some other person, however, the properties have been demarcated and in regard to such demarcation, records are available and the same would be filed before this Court.
4. In view of the rival submissions made by the petitioner, this Court in the interest of justice is inclined to pass the following order:-
i) In the event, the property referred to by the petitioner, where, the Petitioner-Company is going to run its business either demarcated or not, the respondents are directed to issue GST registration number to the petitioner within one week from the date of receipt of a copy of this order. In case, if there is no demarcation of the property, the petitioner-Company is directed to demarcate the property within a period of one (1) week time from the date of issue of GST number.
ii) The petitioner shall demarcate the property and file the demarcation report on 27.11.2023.
5. With the above direction, this Writ Petition stands disposed of. No costs. Consequently, connected Miscellaneous Petition is closed.
6. List the case before this Court on 27.11.2023 for Reporting Compliance of this order by both parties.
