The Rajasthan High Court, Jaipur Bench, ruled that non-compliance with GST provisions in one state may bar a taxpayer from obtaining registration in another state.
The bench of Acting Chief Justice Sanjeev Prakash Sharma and Justice Shubha Mehta observed that the Central Goods and Services Tax Act, 2017, operates in parallel with the State GST Act.
The court stated that if a company, after obtaining registration in a particular State, fails to comply with the provisions of the law and does not file its returns, resulting in cancellation or suspension of its registration, it cannot be permitted to apply for registration in another State without first complying with the provisions of the Act.
The provisions of the Act focus on both state and central regulations. Therefore, if a company is registered in a specific state and fails to comply with the Act’s requirements, it will be considered a defaulter. As a result, this company will also be denied registration in other states.
The applicant, Leighton India Contractors Private Limited, had approached the court asking directions to grant GST registration in Rajasthan under the Central Goods and Services Tax Act, 2017. The company cited that its registration application was cancelled due to the reason that it did not submit the needed GST returns in Tamil Nadu.
Applicant’s counsel said that the alleged failure to submit the returns in Tamil Nadu must not be utilised as a reason to refuse registration in Rajasthan. The company held that GST registration in one state must not automatically be linked to compliance problems in another state.
After acknowledging the submissions of both sides, HC refused the claim of the applicant. As per the bench, the GST structure functions centrally and through state-specific implementations under the GST regime.
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The court mentioned that if a company registered in a specific state did not follow the regulatory norms, like filing returns, and its registration is either cancelled or placed in suspension due to this default, then the entity could not skip the law by asking for fresh registration in another state.
The bench mentioned that authorising this practice shall make the regulatory structure weak and promote businesses to avoid compliance liabilities.
| Case Title | Leighton India Contractors Private Limited vs. Union Of India |
| Case No | Petition No. 4042/2026 |
| For Petitioner | Mr. Vinay Kumar Jain and Mr. Sakshya Jain |
| For Respondent | Mr. Shiv Prakash Dhanera, Mr. Arun Kumar, Mr. Kuldeep Singh Rathore, Mr. Rohan Mittal, Mr. Vedant Agarwal, and Mr. Rajat Sharma |
| Rajasthan High Court | Read Order |
