The Jammu & Kashmir High Court has held that the GST registration cannot be granted or renewed considering the fact that the said premise is under dispute between the co-owners.
In the year 1993, the petitioner, Mr. Parveez Ahmad Baba and another person jointly purchased a two storeyed tin roof building along with land measuring 1844 sq. feet situate at Kothibagh Bund, Srinagar from one Mohd. Sultan R/o Gow Kadal, Maisuma, Srinagar in terms of a sale deed executed on 17th May, 1993. It is, however, the case of the petitioner that the entire consideration amount was paid by him and the name of the co-owner, being his brother was also included in the sale deed as vendee, though, he had not paid even a single penny towards purchase of the subject property.
The petitioner contended that on coming to know of the cancellation of his registration under GST Act, he immediately applied to the authorities making it clear to them that he had not applied for any cancellation of his registration under GST Act. An application in this regard was also submitted to Deputy Commissioner (Appeals), Sales Tax Department raising allegations that some of the employees of the department, who were in connivance with the brother, had mischievously submitted online application for cancellation of registration under GST Act issued in favour of the petitioner.
While asking the parties to amicably settle the property dispute, Justice Sanjeev Kumar held that “There is not even an iota of doubt that person running a restaurant and selling the goods and providing restaurant services would be a “Supplier” within the meaning of term defined under Section 2(105) of GST Act and, therefore, would require registration under the Act, if aggregate turn over in a financial year exceeds rupees twenty lakh.”
Disposing the petition, the Court held that unless a person is permitted to run the business in accordance with law and legitimately attains a turnover of more than rupees twenty lakh, he cannot be registered under the GST Act. The turnover must be from a business, which is legitimately run by the supplier.
Concluding the order, the Court added that “In the instant case, as held above, till dispute between the petitioner and respondent No.5 is settled and two, either jointly apply or property is partitioned and fall in the share of the person applying, no license can be issued by the designated authority under the Act.”
Holding that neither the petitioner nor respondent No.5 is entitled to have a license under the Act or registration under the GST Act in his favour to the exclusion of other, the Court held that “they may, if they so desire, bury the hatchet and apply jointly for grant of requisite license and registration for running the food business of Samci Restaurant jointly. If they do so, there would be no difficulty either for the designated authority under the Act or the competent registering authority under the GST Act to grant license and registration for facilitating the running of food business of Samci Restaurant in favour of the petitioner and respondent No5. However, if dispute between the two continues, it would be appropriate for both the authorities to refuse grant of license and registration to them. The petitioner as well as respondent No.5 is well advised to settle their dispute either amicably or through intervention of Court.”
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