Kiran Raj

The Andhra Pradesh High Court has allowed a writ petition challenging the rejection of a Goods and Services Tax (GST) registration under the Andhra Pradesh Goods and Services Tax Act, 2017. The Court recorded that the rejection, based on the ground that the applicant and its authorized representative were not residents of Andhra Pradesh, had no basis in law. It held that the right to conduct business anywhere in India is guaranteed under Article 19 of the Constitution and that the authorities cannot impose conditions beyond those specified in the statute. The Court directed the respondents to grant GST registration to the petitioner while reserving the right to monitor compliance and prevent tax evasion.

The petitioner, Tirumala Balaji Marbles and Granites, had applied for GST registration for its place of business in Rajamahendravaram. The application, dated October 19, 2024, was rejected by the Assistant Commissioner, Commercial Tax, on November 4, 2024. The rejection order stated that the petitioner and its authorized representative did not belong to Andhra Pradesh and that allowing such registration could lead to potential tax evasion.

Aggrieved by this rejection, the petitioner approached the High Court, contending that the rejection was arbitrary and contrary to the provisions of the APGST Act, 2017. The petitioner argued that neither the Act nor the rules prescribed any residency requirement for obtaining GST registration in Andhra Pradesh. It was submitted that the rejection violated the fundamental right to conduct business under Article 19(1)(g) of the Constitution.

The learned Government Pleader for Commercial Tax, appearing for the respondents, submitted that the registration was refused due to concerns over possible tax evasion. It was contended that since neither the petitioner nor its authorized representative belonged to Andhra Pradesh, there was a risk that tax obligations could be evaded. The respondents maintained that their decision was based on an effort to prevent potential misuse of GST registration.

The Court examined the relevant statutory provisions and recorded that the GST framework does not impose any restriction preventing non-residents from obtaining registration in a particular state. It stated, "There do not appear to be any restrictions for persons outside the State to come into the State of Andhra Pradesh and seek registration under the APGST Act."

The Court further recorded that the apprehension of tax evasion, however well-founded, could not justify the refusal of registration if the statute does not provide for such a ground. It stated, "Mere apprehension, however well-founded, cannot deprive the petitioner of his right to carry on trade and business in the State of Andhra Pradesh."

Referring to Article 19 of the Constitution, the Court recorded that every citizen has the right to conduct business anywhere in India, subject only to reasonable restrictions imposed by law. It observed, "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."

The Court held that the rejection order was not based on any statutory provision and was therefore unsustainable in law. It recorded, "In such circumstances, the order of rejection is clearly without any basis in law."

The Court set aside the rejection order dated November 4, 2024, and directed the respondents to grant GST registration to the petitioner. It stated, "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, the Court clarified that the tax authorities retain the power to monitor compliance and prevent tax evasion. It recorded, "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."

The Court disposed of the writ petition with no order as to costs and directed that any pending miscellaneous applications be closed.

Case Title: Tirumala Balaji Marbles and Granites v. The Assistant Commissioner, Commercial Tax & Others
Case Number: W.P. No. 1200 of 2025
Bench: Justice R. Raghunandan Rao and Justice Harinath N

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