The Jammu and Kashmir and Ladakh High Court has ruled that a business registered under the Goods and Services Tax (GST) Act cannot engage in brick trading without obtaining the mandatory licence prescribed under local regulatory laws.
The Court made this observation while dismissing a series of petitions filed by brick dealers challenging the orders of district authorities who had seized their vehicles transporting bricks imported from outside the Union Territory. The dealers argued that since they held valid GST registrations, they were authorised to trade freely.
Rejecting this argument, the Court clarified that registration under the GST Act only ensures compliance with taxation obligations and does not substitute the requirement of specific licences under other laws. The bench noted that brick manufacturing, sale, and transport in Jammu and Kashmir are governed by the Brick Kilns (Regulation) Act, 2010, and the corresponding rules framed under it.
The judges observed that the purpose of the licensing regime is to regulate the sector in the interest of environmental protection, fair trade practices, and economic balance within the region. Allowing unrestricted trading merely on the basis of GST registration, the Court said, would undermine the intent of the regulatory framework.
Upholding the action taken by local authorities, the Court ruled that all brick dealers and traders must adhere to the licensing provisions and that unlicensed trading could attract penalties, seizure of goods, and other legal consequences.
The verdict reinforces that GST compliance alone does not confer trading rights where additional regulatory conditions are mandated by law.
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