FEBRUARY 19, 2025

By Vijay Kumar

STRANGE are the ways of GST officers; they wield their stamp like wizards casting spells, often conjuring confusion with a flick of their pens! One minute, they're welcoming you into the world of taxation, and the next, they've shut the door because you're from ‘not around here.' It's like navigating a bureaucratic labyrinth where logic takes a backseat and the quirks of compliance reign supreme. Who knew that applying for a GST registration could feel more like trying to decode an ancient scroll than simply starting a business?

Are you required to belong to or reside in the State where you want a GST Registration? At least one GST officer in Andhra Pradesh thinks so.

A prospective taxpayer applied for a GST registration for his premises in Rajamahendravaram in Andhra Pradesh. When somebody applies for a registration, it means that he is likely to do business and pay GST facing all the hurdles placed before him by the benign bureaucrats. If the Department has any interest in really collecting taxes, they should go the applicant with a bouquet and welcome him into the fold of the exciting good and simple tax. Unless he comes in, how can you harass him?

But here is an Assistant Commissioner who rejected the registration on the grounds that:

1. The applicant does not belong to Andhra Pradesh.

2. Even his authorized representative does not belong to the State of Andhra Pradesh.

How can you think of starting a business in a State you don't belong to? Atrocious!

It is not laid down in any law that to get GST registration, you should belong to the State where you are seeking registration or that at least your authorized representative should belong to that State. On the contrary, "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."

But the Constitution and the GST laws are beyond the learned Assistant Commissioner who obviously is a law unto himself. The Chief Minister of his State is going round the world with presentations inviting businessmen to come to his State to do business, promising all help.

In a tweet in X, he declared,

And here is an Assistant Commissioner who says, "No registration, because you don't belong to this State." What about the Chief Minister's invitation? That is not a notification!

Our prospective taxpayer had a divine name – ‘Tirumala Balaji Marbles and Granites'; of course, that didn't influence our Assistant Commissioner into giving them a registration. Tirumala Balaji resides in Andhra Pradesh and in the devout minds of millions of people. Even He is a GST assessee and His temple is managed by a Trust which has members from all over India. On 3 rd February 2025, the Minister of State in the Ministry of Finance, Pankaj Chaudhary told the Lok Sabha that in 2024-25 (up to 31st December, 2024), the Tirumala Trust paid a GST of Rs. 36.28 Crores. Obviously, He had no problems in getting a GST registration.

Anyway, our ‘Tirumala Balaji Marbles and Granites' could not satisfy the Assistant Commissioner about its eligibility to get a GST registration and so, was denied one on the ground of not belonging to the State of Andhra Pradesh.

What can you do when an Assistant Commissioner blatantly, in disregard to the Constitution and the GST Act, refuses to register a prospective taxpayer?

Fortunately, there are High Courts.

And so, Tirumala Balaji Marbles approached the Andhra Pradesh High Court in writ petition.

In the High Court, the State submitted that the registration was rejected 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 .

The High Court [2025-TIOL-293-HC-AP-GST] observed,

1. 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.

2. 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.

3. Mere apprehension, however well founded, cannot deprive the petitioner of his right to carry on trade and business in the State of Andhra Pradesh.

4. 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.

5. In such circumstances, the order of rejection is clearly without any basis in law.

Accordingly, the writ petition was allowed and the order of rejection dated 04.11.2024 was set aside. The respondents were directed to register the petitioner.

Let's break down the Assistant Commissioner's logic:

If you eat cake, you might get crumbs on your shirt; so, to avoid embarrassment, just don't eat cake at all.

If you own a pet dog, it might bark and disturb your neighbours; so just adopt a pet rock instead.

If you start exercising, you might get sore muscles; so, it's better to just stay on the couch and watch fitness videos.

If you have a garden, pests might invade and ruin your plants; so why not just cover it all with concrete?

If you invite friends over, they might eat all your snacks; so why not just throw a party with no food at all?

If you have a bank account, there could be cyber thefts – so, don't have a bank account – keep cash at home.

If you have cash at home – thieves may break in; so, don't keep cash at home - better still, don't have cash at all.

If you provide GST registration, there's a risk of tax evasion; so, avoid the hassle altogether.

Does the Assistant Commissioner believe that granting registration is a favour to the taxpayer? Registration is not a favour; it's a statutory requirement – if at all it is a favour, it is a favour to the department, not the assessee. Are you not working against the government which pays you rather well by refusing registration and thereby taxes?

And is there any guarantee that an assessee from the same State will not evade? And what if he evades and runs off to another State? Is the Assistant Commissioner protecting the interests of the State or jeopardising it? Will he cancel the registration of all the already registered taxpayers in his jurisdiction if they are from outside the State? The Chief Minister is inviting respected investors to start business in his State and an Assistant Commissioner does not want to give registration just because the applicant is from another State. What will the respected Assistant Commissioner do if he is from another country?

How unfortunate it is that the State has the audacity to tell a High Court that registration cannot be given apprehending evasion in spite of constitutional protection!

To start an enterprise the trader has to organise several services and permissions like land, building, electricity, water, pollution and what will happen to him after all these, he is told that he cannot run his business because he belongs to another State? And he has to approach the High Court to get a simple registration for the good and simple tax? The first step in this mega maze is registration and for that you have to go to the High Court! Is a High Court meant for trivialities like granting GST registration?

Can the government stop recruiting officers on the apprehension that new recruits may become corrupt and would be a threat to revenue? When will the officers realise that the trade does not exist only to pay GST – rather you get GST because they exist.

In his zealous quest to protect revenue by rejecting registrations, the Assistant Commissioner has ironically threatened the very cause he seeks to uphold, undermining both the GST Law and the Constitution's fundamental principles.

These are the days of MAGA + MIGA = MEGA

Could it be

MAGA - Make Accountability Great Again

MIGA - Make Investors Giggle Again

MEGA - Make Everyone's Goals Achievable

Until next week

Comments/feedback welcome at vijaywrite@tiol.in or 9848111243 (WhatsApp)