2025 (10) TMI 670 - HC - GST

Writ challenging cancelled registration for alleged denial of personal hearing dismissed where notice issued and representative submitted writings

Writ challenging cancellation of petitioner's registration for alleged denial of personal hearing was dismissed by the HC. The court found notice for a ... Cancellation of registration of the petitioner - order passed without affording an opportunity to the petitioner - Violation of principles of natural justice - HELD THAT:- The contention of the petitioner that, no personal hearing was granted, would also have to be rejected as the notice for personal hearing was given and an authorized representative of the petitioner appeared before the authority on the date mentioned in the said notice. Further, the fact that the authorized representative of the petitioner had chosen to handover the written explanation on that day would strengthen the version of the respondents that no adjournment or postponement was sought and the authorized representative had handed over the written submissions and left. In the view of this Court, the request for personal hearing is not a clear request for a further date and only a request for hearing if the authority found it necessary. In view of the fact that the authority had passed an Order, dated 13.09.2024, the authority obviously did not find any necessity to seek any further clarification. There are no reason to interfere with the said impugned Order, dated 13.09.2024 and this Writ Petition is dismissed accordingly. ISSUES PRESENTED AND CONSIDERED 1. Whether cancellation of registration under the CGST Act is justified where the taxable person is not conducting business from the declared place of business and is alleged to be issuing invoices without supply of goods or services. 2. Whether principles of natural justice under Section 29 of the CGST Act (opportunity of personal hearing) were violated when the authority passed an order after receiving written submissions from an authorised representative and without granting a further personal hearing date. 3. Whether failure to intimate change of place of business within the statutory period (15 days) militates against the taxable person's explanation that business was conducted from alternate co-working spaces. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of cancellation of registration where business not conducted from declared place and allegations of issue of invoices without supply Legal framework: Cancellation of registration under the CGST Act and Rule 21(a) of the CGST Rules (requirement that business be carried out from declared place and prohibitions related to issuance of invoices without supply). Precedent Treatment: No prior judicial precedents were cited by the parties or relied on by the Court in the judgment. Interpretation and reasoning: The authority conducted an inspection of the declared premises and recorded that the petitioner had not occupied or conducted business from that declared place. Independent corroboration by the declared landlord (who stated the premises were not occupied and the rental agreement was requested to be cancelled) and the statement that the property had been transferred to another person who disclaimed knowledge of the petitioner supported the authority's finding. The petitioner's post hoc explanations that business was being conducted from co-working spaces were supported only by rental agreements dated later (19.10.2023 and 01.08.2024) and were not communicated to tax authorities within the statutory time. The factual findings on non-occupation and lack of business at declared premises provided a sufficient basis under Rule 21(a) to treat the registration as liable for cancellation. Ratio vs. Obiter: Ratio - The Court treated the authority's inspection report and corroborating landlord statements as sufficient factual basis for cancellation under Rule 21(a) when the registered place is not used for business. Obiter - The Court's reference to allegations of invoices without supply was not separately adjudicated on facts beyond noting the authority's assertion; the decision rests principally on non-occupation and failure to intimate change of address. Conclusions: Cancellation of registration was sustainable on the factual finding that the taxable person never conducted business from the declared place and failed to comply with Rule 21(a) requirements. Issue 2: Compliance with Section 29 - adequacy of opportunity of personal hearing Legal framework: Section 29 of the CGST Act (mandate to afford an opportunity of personal hearing before passing adverse orders). Precedent Treatment: No precedents were invoked or overruled; the Court applied statutory standard of opportunity to be heard. Interpretation and reasoning: The authority issued a notice fixing a date for personal hearing. An authorised representative of the taxable person attended on the fixed date and tendered detailed written submissions (letter dated 03.09.2024). The representative did not seek adjournment or explicitly request a further date on that occasion; the representative's written submission included a line requesting a personal hearing 'to present further details, if necessary,' which the Court interpreted as conditional and not a clear, unequivocal request for adjournment or a specific further hearing date. In these circumstances, the authority's decision to proceed on the basis of the written submissions and to find no further necessity for personal hearing was found to satisfy the requirements of Section 29. Ratio vs. Obiter: Ratio - Where an authorised representative appears at the scheduled personal hearing and furnishes detailed written submissions without seeking adjournment or expressly requesting a further hearing date, the statutory requirement for opportunity to be heard under Section 29 is satisfied. Obiter - The Court's characterization of the conditional phrase 'if necessary' as insufficient to amount to a clear request for a further hearing is an interpretive observation applicable to the facts. Conclusions: There was no violation of principles of natural justice under Section 29; the authority afforded the opportunity of personal hearing in substance by fixing a date and receiving the representative and written submissions on that date. Issue 3: Duty to intimate change of place of business within 15 days and evidentiary weight of delayed communication Legal framework: Statutory obligation to intimate change of place of business within 15 days of change (statutory compliance obligations under the CGST Act/Rules). Precedent Treatment: None cited; Court applied statutory time-limit principle. Interpretation and reasoning: The petitioner admitted shifting office in October 2023 but did not apply for change of address until after the show-cause notice issued on 23.08.2024. The Court emphasized the statutory duty to notify change within 15 days and held that an explanation that pending assessment prevented intimation was untenable because the statutory obligation is independent and mandatory. The absence of any material showing attempts to inform authorities since October 2023 undermined the petitioner's claim that the shift was bona fide and timely communicated. Ratio vs. Obiter: Ratio - Non-intimation of change of place of business within the statutory period is a material factor that can justify adverse action (including cancellation) where the registered address is not in use. Obiter - The Court's rejection of the contention that ongoing assessment prevented intimation is factual/legal reasoning tied to the statutory obligation rather than an expansive doctrinal pronouncement. Conclusions: Failure to intimate change of address within 15 days weighed decisively against the petitioner and supported the authority's conclusion that the declared place was not the place of business for purposes of registration. Interrelationship of Issues and Final Conclusion Cross-references: Issues 1 and 3 are interlinked - the authority's fact finding on non-occupation (Issue 1) is reinforced by the petitioner's failure to comply with the statutory intimation requirement (Issue 3). Issue 2 is dispositive of the procedural fairness challenge: because the opportunity to be heard was afforded in substance, the procedural attack on the cancellation could not succeed. Final conclusion: The impugned order cancelling registration was not interfered with. The authority's factual findings on non-occupation, the petitioner's failure to intimate change of address within the statutory period, and the adequacy of the opportunity of personal hearing collectively justify dismissal of the petition. The Court declined to grant relief and made no order as to costs.