For not obtaining GST Registration, Assessee cannot take benefit of not having business premises in another state where statute already provide the provision of “Casual Taxable Person”.

Pragati Engineers v. Union of India

High Court of Delhi

W.P.(C) No. 3841 of 2021

Category: GST Registration – Tender Compliance

Date of Judgement: November 15, 2021

Relevant Provisions: Section 2(20), Section 22, Section 24, and Section 25 of the CGST Act, 2017

Takeaway: Tender Eligibility Hinges on Appropriate GST Registration – Even for Casual Taxable Persons

Facts of the Case [¶ 1–3]

The petitioner, Pragati Engineers, challenged certain clauses in tender notices issued by government entities requiring GST registration in the state where the work is to be executed. The petitioner, already registered under GST in Delhi, argued that it should not be required to obtain GST registration in other states, such as Telangana (Hyderabad), where it has no fixed place of business. The tender clauses mandated bidders to obtain GST registration in the state of work or as required by GST authorities.

Questions in Consideration [¶ 1, 3]

1. Whether a person registered under GST in one state (Delhi) can be compelled to register in another state (Telangana) solely for fulfilling the conditions of a government tender?
2. Whether such a person can be treated as a “casual taxable person” under the CGST Act for the purpose of compliance?

Observations of the Court [¶ 4–6]

• The Court examined Sections 22 and 25 of the CGST Act and clarified that a supplier must be registered in each state where they undertake business.
• It referred to Section 2(20), defining a “Casual taxable person” as one who occasionally supplies goods/services in a state where he has no fixed place of business.
• Section 24 mandates that casual taxable persons making taxable supplies are required to register, even if not otherwise required under Section 22.
• Therefore, the tender’s requirement for registration in the state where the work is performed (even if temporarily) is valid and in accordance with the law.

Judgement of the Court [¶ 7]

The High Court dismissed the writ petition, holding that the petitioner must comply with both the CGST Act and the tender conditions. However, it allowed the petitioner the liberty to take necessary steps, including registration as a casual taxable person, to qualify for the tender. No costs were imposed.

Between Fine Lines

• GST registration must align with the location of business activity—even if temporary.
• A person cannot rely solely on registration in one state to fulfill national tender conditions.
• Casual taxable person registration is a lawful route for businesses operating temporarily in other states.
• Tender conditions aligned with statutory GST provisions are enforceable.
• High Courts will not interfere where the statutory scheme is clear and prescriptive.

Summary of Referred Cases

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