Introduction:

The Andhra Pradesh High Court, in Tirumala Balaji Marbles And Granites v. The Assistant Commissioner St and Others, Writ Petition No. 1200/2025, delivered a significant judgment reinforcing the right to trade and do business across India. The case involved the petitioner, Tirumala Balaji Marbles and Granites, who sought GST registration under the Andhra Pradesh Goods and Services Tax Act (APGST Act) for their place of business in Rajamahendravaram. However, the Assistant Commissioner rejected the registration on the sole ground that the assessee and its authorised representative did not belong to Andhra Pradesh. The petitioner challenged this decision before the Andhra Pradesh High Court, contending that such a rejection was legally untenable and violated their constitutional rights. The division bench comprising Justices R. Raghunandan Rao and Harinath N. ruled in favour of the petitioner, stating that apprehensions regarding tax evasion cannot override statutory rights and that every citizen has the right to conduct business anywhere in India under Article 19 of the Constitution. The court held that the rejection was without legal basis and directed the authorities to grant registration, emphasising that the GST framework does not impose geographical restrictions on business operations.

Arguments:

The petitioner, represented by Advocate Anil Kumar Bezawada, argued that the rejection of GST registration was arbitrary and against the principles of free trade enshrined in the Constitution. They contended that the APGST Act and the Central GST framework do not mandate that a business owner must belong to the same state where they seek registration. The petitioner further argued that denying GST registration based on domicile status created an unreasonable barrier to trade and was against the spirit of the Goods and Services Tax regime, which aims for uniformity across India. They emphasised that the GST system allows businesses to register in any state where they have a place of business and that the respondent’s order was discriminatory and without legal justification. The petitioner also cited judicial precedents where courts had upheld the right of traders to operate in any state and obtain necessary registrations without unwarranted restrictions. Additionally, they pointed out that apprehensions of tax evasion should be addressed through monitoring and compliance mechanisms rather than outright rejection of registration applications.

On the other hand, the respondent, represented by the Assistant Commissioner, defended the rejection by arguing that allowing an outsider to register a business in Andhra Pradesh without any responsible person from the state could lead to potential tax evasion. The department claimed that businesses registered by non-residents might engage in fraudulent activities, including tax evasion and fake invoicing, as there would be no local accountability. The respondents maintained that their primary concern was ensuring tax compliance and preventing revenue loss to the state. They further contended that while the Constitution guarantees the right to trade, it also allows reasonable restrictions in the interest of public welfare, and the rejection of registration in this case was based on genuine concerns. The state authorities also pointed out that allowing registrations indiscriminately could create administrative difficulties in enforcing tax laws and recovering dues in case of defaults. Therefore, they urged the court to uphold the rejection and require businesses to have a local responsible person for better tax enforcement.

Judgement:

The Andhra Pradesh High Court, after hearing both sides, ruled in favour of the petitioner, holding that the rejection of GST registration solely based on the petitioner’s domicile status was legally unsustainable. The bench categorically stated that the respondents’ apprehensions, however valid, could not justify a restriction that was not provided for in the statute or the rules. The court emphasised that the GST law does not impose any geographical restrictions on businesses seeking registration and that denying registration based on state domicile was a direct violation of the right to trade under Article 19(1)(g) of the Constitution. The bench observed that businesses have the right to establish themselves anywhere in India, and any artificial barriers imposed by state authorities would defeat the very purpose of the GST framework, which aims for a seamless national market. The court further stated that the state’s concerns about tax evasion could be addressed through regulatory oversight, but such concerns could not override fundamental rights. In light of these observations, the court set aside the order of the Assistant Commissioner and directed the respondents to grant GST registration to the petitioner without imposing any extralegal conditions.