GST Registration Limited To Fiscal Compliance, Brick Kiln Act Governs Environmental Regulation: J&K High Court Dismisses Brick Dealers’ Plea Against Licensing Requirement
Safiya Malik
The High Court of Jammu & Kashmir and Ladakh Single Bench of Justice Wasim Sadiq Nargal upheld the validity of the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010 and its 2017 regulatory framework, dismissing writ petitions filed by brick dealers challenging licensing requirements and seizure of vehicles transporting bricks into the Union Territory. The Court held that the statutory scheme regulates the entire brick trade and that licensing obligations extend not only to kiln owners but equally to dealers involved in sale, storage, transport and import of bricks. It further held that registration under the Goods and Services Tax regime concerns taxation alone and does not substitute or negate the obligation to obtain a licence under the brick kiln legislation, thereby sustaining the impugned administrative orders.
The petitioners, who are dealers engaged in the trade of procuring and selling bricks within the Union Territory of Jammu and Kashmir, filed a writ petition challenging the orders issued by the District Magistrates of Kathua and Samba. These orders directed seizure of vehicles transporting bricks imported from outside the Union Territory and imposed penalties under the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010 and the Jammu and Kashmir Brick Kiln (Regulation) Rules, 2017.
The petitioners contended that the Act was enacted only to regulate the establishment and operation of brick kilns and not the business of trading or transportation of finished bricks. They asserted that the licensing requirements under Sections 4 to 7 of the Act and Rule 3 of the 2017 Rules applied exclusively to manufacturers. They further argued that Forms A and B pertain only to brick kiln owners, that Section 15 imposes only price-related restrictions on dealers, and that registration under the GST Act sufficed to regulate their business.
The respondents submitted that Section 2(e) defines a dealer, that Rule 3 applies to manufacture, sale, and storage, and that Sections 12, 15, and 21 empower licensing authorities to inspect, seize, and take action. They argued that the Deputy Commissioners acted within statutory authority and that the petitioners bypassed the appellate remedy under Section 20.
The Court recorded that the issue required interpreting Rule 3 of the 2017 Rules, noting that it “stipulates that no person shall manufacture, sell, store, or possess bricks for sale without a valid licence.” It stated that the legislative intent, language, and statutory scheme “indicate otherwise” to the petitioners’ argument, observing that the inclusion of “dealer” in Section 2(e) “indicates that the legislature consciously brought dealers within the ambit of regulation.”
The Court stated that Rule 3 “explicitly provides that ‘No manufacturer or dealer shall manufacture, sell, or store bricks except by holding a valid licence’,” recording that this “leaves no scope for doubt that the licensing requirement applies equally to both.” It further stated that Section 15 uses the expression “no manufacturer or dealer shall sell or offer for sale,” showing that both classes are subject to the same statutory obligations.
The judgment recorded the Supreme Court’s reasoning on the interpretation of “or”, quoting “the word ‘or’ is at times used to join terms when either one or the other or both are indicated.” It further stated that Form B “relates to the license for manufacture, sale, and supply of bricks,” and therefore encompasses dealers.
Regarding the Deputy Commissioners’ authority, the Court recorded that Rule 4 “expressly provides that… the Deputy Commissioner… shall exercise the powers of Licensing Authority,” and Section 12 authorizes them “to stop and inspect any vehicle… and to seize bricks found… where he has reasons to believe that contravention… has been or is being… committed.”
The Court stated that GST registration “does not authorize them to engage in any particular trade without fulfilling sector-specific regulatory obligations,” and recorded that “registration under the GST Act neither dispenses with nor substitutes the requirement of licensing under the Brick Kiln Act.”
On maintainability, the Court noted that Section 20 “makes it clear that any person aggrieved… may… prefer an appeal,” and stated that “the petitioners have approached this Court directly… without availing such statutory remedies.”
Regarding Article 19(1)(g), the Court recorded that licensing is a reasonable restriction, stating that the framework “neither prohibits the carrying on of trade nor imposes unreasonable restrictions thereon, rather it merely regulates the same.” It further stated that Rule 3 applies uniformly and “does not occasion any preference or discrimination between intra-State and inter-State trade.”
The Court directed: “all the legal questions formulated by this Court have been answered in favour of the respondents and against the petitioners. This Court is of the considered view that the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010 and the Rules framed thereunder in 2017 constitute a comprehensive regulatory framework intended to control not only the establishment and operation of brick kilns but also the trade, sale, storage, and distribution of bricks within the Union Territory.”
“The inclusion of the term dealer under Section 2(e) and the express language of Rule 3 clearly manifest the legislative intent to bring both the manufacturers as well as dealers within the fold of the regulation. The contention that the Act applies only to manufacturers cannot be accepted. Any interpretation excluding dealers would frustrate the very object of the Act.”
“The contention of the petitioners that the registration under the Goods and Services Tax Act, 2017, exempts them from the requirement of obtaining a license under the Brick Kiln Act, is misconceived and is hereby rejected. Compliance in conformity with one statute does not dispense with the mandatory requirements of another statute operating in a different field.”
The Court stated: “the licensing framework neither prohibits the carrying on of trade nor imposes unreasonable restrictions thereon, rather it merely regulates the same.” It recorded: “Such regulatory restrictions are squarely covered under clause (6) of Article 19 of the Constitution of India.”
“The objection raised by the respondents regarding the maintainability of the writ petition also merits acceptance.” It further recorded: “The petitioners, without availing such statutory remedies, have invoked the extraordinary jurisdiction of this Court under Article 226.”
The Court stated: “The impugned orders issued by the respective Deputy Commissioners… are in conformity with law and proportionate to the object sought to be achieved, and cannot be said to suffer from arbitrariness, mala fides, or want of jurisdiction. The Deputy Commissioners of Kathua and Samba have acted within the scope of their statutory powers in issuing the impugned orders and accordingly the same are upheld.”
“The seizures and enforcement measures complained of are regulatory in nature and justified by the statutory mandate. As a necessary corollary, the orders impugned are upheld.”
“The petitioners have not demonstrated any violation of natural justice, mala fide exercise of power, or lack of jurisdiction.” It stated: “licensing requirement under Rule 3, read with Section 2(e) of the Act, is a reasonable regulatory condition and does not violate Article 19(1)(g) of the Constitution.”
“With these observations, the writ petition stands dismissed along with all connected applications.”
Advocates Representing The Parties
For the Petitioners: Mr. Vikram Sharma, Senior Advocate; Mr. Sachin Dev Singh, Advocate; Mr. Sanpreet Singh, Advocate
For the Respondents: Ms. Monika Kohli, Senior AAG; Mr. Adarsh Bhagat, GA; Mr. Dewakar Sharma, Dy. AG
Case Title: Kehar Singh & Ors. v. Union Territory of Jammu & Kashmir & Ors.
Case Number: WP(C) No. 2790/2025
Bench: Justice Wasim Sadiq Nargal
