The Delhi High Court has held that Section 69(2) of the Partnership Act, 1932 doesn’t bar unregistered firm paying GST to challenge departmental actions.
The bench of Justice Prathiba M. Singh and Justice Shail Jain Section 69(2) of the Partnership Act, 1932 cannot place a bar to a suit filed by an unregistered firm, if a statutory or common law right is being sought to be enforced. The writ petition seeks reliefs under the CGST Act, under which the Petitioner has a registration – despite being an unregistered Partnership firm. Such a firm, which is paying taxes and has any grievances against the Department cannot be non-suited from enforcing statutory rights.
The petition, filed under Articles 226 and 227 of the Constitution, challenges the order dated 20 February 2025 and the Show Cause Notice (SCN) dated 27 November 2024 issued by the Sales Tax Officer, Delhi, for FY 2020–21, raising a tax demand of ₹59,05,232 and a total demand (with interest and penalty) of ₹1,09,02,348. The petition also contests Notification Nos. 40/2021–Central Tax and 40/2021–State Tax, already under challenge in Sarens Heavy Lift India Pvt. Ltd. v. Sales Tax Officer.
The petitioner, Mr. Amit Kumar Basau, a partner in the unregistered firm M/s Basau Construction (India), has filed the writ on behalf of the firm. The respondents object to its maintainability due to non-registration, while the petitioner relies on the Supreme Court ruling in Haldiram Bhujiawala v. Anand Kumar Deepak Kumar (2000) 3 SCC 250, asserting that an unregistered firm can file a writ through a partner.
The petitioner further submits that no reply was filed to the SCN due to an oversight by its Chartered Accountant and that the order was passed without being heard. The petitioner expresses willingness to pursue an appeal, subject to the outcome of Sarens.
Section 69 of the Indian Partnership Act, 1932 has an embargo on an un-registered firm from filing a suit or any proceeding for enforcement of a right.
The court held that since the Partner has also been implemented, it cannot be held that the writ petition is maintainable. Since the partner has been made a party to the writ petition and has filed the present writ petition as Petitioner No.1, the writ petition is held to be maintainable.
Case Details
Case Title: Amit Kumar Basau & Anr. Versus Sales Tax Officer Class II AVATO Ward 13
Case No.: W.P.(C) 15327/2025 & CM APPL. 62787/2025
Date: 08/10/2025
Counsel For Petitioner: Abhishek Garg
Counsel For Respondent: Sumit K. Batra
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