Rajasthan HC Upholds GST Discipline: Non-Compliance in One State Bars Registration in Another

The Rajasthan High Court dismissed the writ petition of Leighton India Contractors Private Limited seeking restoration of the GST registration application. The court ruled that it is compulsory to comply with the provisions of the GST Law in all states.

Leighton India Contractors Private Limited had filed a writ petition in the Rajasthan High Court before the Jaipur Bench, seeking GST registration in Rajasthan under the Central Goods and Services Tax Act, 2017. The company claimed that its GST registration application was rejected merely because it did not file its return in Tamil Nadu. The company argued it is not fair under the law to deny GST registration just because the return was not filed in Tamil Nadu and stated the issue should not affect its eligibility in Rajasthan.

When the court analysed the facts of the case, it observed that the GST framework operates both at the central and state levels, with compliance required in each state where a business is registered. It observed that if a company fails to follow legal requirements in one state, it cannot avoid those obligations simply by applying for registration in some other state. The judges further highlighted that a company that is non-compliant in one state is considered a defaulter under the GST law and its registration may be denied until it rectifies its default.

The court ruled, “The Act of 2017 is parallel to the State GST Act. If a company does not follow the provisions of law and, after having been registered in a particular state, does not submit its return and its registration is cancelled or put in abeyance, the company cannot be allowed to move an application for getting registration in another state instead of complying with the provisions of the Act. In view of the particular state, the provisions of the act are state-centric and, at the same time, central-centric. Thus, a company that is registered in a particular state and does not comply with the provisions of the act would be a defaulter and would, therefore, be denied registration in other states too.”

Finding no merit in the petitioner’s arguments, the court held that it is mandatory to properly comply with GST provisions across all states. In conclusion, the high court dismissed the company’s writ petition.