'GST Is Fiscal Compliance, Not Regulatory Exemption': J&K High Court Says Brick Dealers Still Need Licence Under Brick Kiln Act

The Jammu & Kashmir High Court has upheld the validity of the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010 and the 2017 Rules, ruling that the regulatory framework applies not only to manufacturers but also to brick dealers, rejecting challenges raised by multiple petitioners.The High Court rejected the plea that GST registration obviated the licensing requirement under the Brick Kiln Act, stating, “GST registration pertains to fiscal compliance… the Brick Kiln Act is a regulatory statute aimed at environmental protection and land use control. Compliance with one statute does not dispense with mandatory requirements of another.” A bench of Justice Wasim Sadiq Nargal held that the Act and Rules constitute a “comprehensive regulatory framework intended to control not only the establishment and operation of brick kilns but also the trade, sale, storage and distribution of bricks within the Union Territory.”The Court emphasised that Section 2(e) (definition of “dealer”) and Rule 3 clearly reflect legislative intent to include both brick manufacturers and brick dealers within the regulatory scope.Rejecting the petitioner's argument that the statute regulates only manufacturers, the Court observed, “Any interpretation excluding dealers would frustrate the very object of the Act, rendering it ineffective and encouraging unregulated brick trading operations that evade quality checks, environmental standards, and lawful taxation.” Regulatory Restrictions Are Reasonable Under Article 19(1)(g)Holding that the licensing conditions were regulatory, not prohibitory, the Court concluded “The licensing framework neither prohibits the carrying on of trade nor imposes unreasonable restrictions… Such regulatory restrictions are squarely covered under Article 19(6).”The Court agreed with the State's objection that the petitioners bypassed the statutory appellate remedyThe petitioners, without availing such statutory remedies, have invoked the extraordinary jurisdiction of this Court.” Deputy Commissioners' Closure Orders UpheldThe impugned orders directing closure of unlicensed kilns and regulating existing operations were found valid.“The Deputy Commissioners… have acted within the scope of their statutory powers… the impugned orders are upheld,” the court said.The Court underscored the wider economic and administrative concerns behind the regulatory mechanism: “Unregulated import of bricks… would inevitably lead to hoarding, black marketing and deliberate shortage… causing loss to the local revenue and adverse repercussions on the State economy.” Rejecting the argument that Form B is only for manufacturers, the Court clarified “Form 'B'… expressly includes 'sale and supply'. Since dealers are engaged in the sale of bricks, they fall within its ambit.” Concluding that no violation of natural justice, mala fides or lack of jurisdiction was shown, the Court dismissed the petition.Cause-Title: Kehar Singh Ors vs Union Territory of J&K & Ors, LiveLaw 2025 (JKL) 297Click Here To Read/Download Order

'GST Is Fiscal Compliance, Not Regulatory Exemption': J&K High Court Says Brick Dealers Still Need Licence Under Brick Kiln Act

Aleem Syeed

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