Case Law Details
DNC Infrastructure Private Limited Vs Superintendent of Central Tax (Andhra Pradesh High Court)
The Andhra Pradesh High Court adjudicated a dispute involving DNC Infrastructure Private Limited (“the petitioner”) and the Superintendent of Central Tax regarding the proposed cancellation of the petitioner’s GST registration. The petitioner, registered under the Central Goods & Services Tax Act, 2017 (“CGST Act”), received a show-cause notice dated 23 August 2024 from the tax authorities, alleging that the petitioner was not conducting business from its declared place of business in Jammalamadugu, Kadapa District, and that invoices and bills were being issued without actual supply of goods or services. The petitioner argued that the order of cancellation violated Section 29 of the CGST Act, which mandates an opportunity of personal hearing before any adverse order, as the authorities passed the order dated 13 September 2024 without properly considering their objections.
The petitioner explained that it had shifted its operations to co-working spaces in Visakhapatnam and Vijayawada under agreements dated October 2023 and August 2024, respectively. It contended that the assessment authority had rejected its request for a change of address, preventing it from updating the GST records, and maintained that the alleged violations under Rule 21(a) and (b) of the CGST Rules could have been clarified if a personal hearing had been properly granted.
In response, the authorities contended that the declared place of business in Jammalamadugu had never been occupied. The landlord confirmed that although a rental agreement had been executed, the petitioner never took possession, and the property had subsequently been transferred to another person with no knowledge of the petitioner. The authorities argued that this constituted a clear violation of Rule 21(a), which requires a registered person to conduct business from the declared premises. The counter affidavit also noted that a personal hearing had been scheduled on 4 September 2024, and an authorized representative of the petitioner appeared on that date, submitting written objections. The authorities emphasized that no adjournment was sought and the request for further hearing in the submission merely indicated willingness to provide additional details if deemed necessary by the authority.
The Court observed that the petitioner had not submitted any evidence demonstrating an attempt to inform the authorities about the change of address since October 2023. Under law, a registered person is required to intimate any change of business address within 15 days of the change. The Court found that the personal hearing requirement under Section 29 had been satisfied, as the petitioner’s representative attended the scheduled hearing and submitted written explanations. The Court held that the petitioner’s request for further hearing did not constitute a formal request for adjournment, and the authority reasonably concluded that no additional clarification was necessary.
Considering the evidence and procedural history, the High Court concluded that there was no violation of natural justice. The impugned order dated 13 September 2024, cancelling the petitioner’s GST registration, was found to be valid and was upheld. The writ petition filed by DNC Infrastructure Private Limited was accordingly dismissed, with no order as to costs. All interlocutory applications pending in the matter were closed.
The judgment underscores the importance of compliance with GST procedural requirements, including timely intimation of change in business address and cooperation during personal hearings. It reiterates that the authorities have the discretion to act when a registered premises is not operational, and that written submissions alone, without formal requests for adjournment, do not impede lawful enforcement actions.
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
The petitioner was registered as a taxable person under the Central Goods & Services Tax Act, 2017 [for short “the CGST Act, 2017”] with the 1st respondent. A show-cause notice, dated 23.08.2024, was issued by the 1st respondent proposing to cancel the registration of the petitioner under the CGST Act, on the ground that the petitioner was not conducted the business from the declared place of business and that invoices and bills were being issued without supply of goods or services.
2. The petitioner contends the following:-
The declared place of the business of the petitioner, under the registration application, was D.No.21-582, Munireddy Colony, Jammalamadugu, Kadapa District. It appears that this premises was inspected and a panchanama was conducted, on 23.08.2024, after which the aforesaid notice had been issued. The petitioner after receipt of the said show-cause notice, had filed a reply, dated 03.09.2024, requesting for personal hearing to explain his objections. However, the 1st respondent had passed Orders, dated 04.09.2024, without affording an opportunity to the petitioner and consequently there was being violation of the provisions of Section-29 of the CGST Act, which mandates an opportunity of personal hearing before any adverse orders had been passed. The stand of the respondents that petitioner had violated the Rule-21(a) &(b) of the Central Goods & Services Rules, 2017 [for short “the CGST Rules”] is not in accordance with the facts and the same could have been explained if the petitioner had been given an opportunity of personal hearing.
3. A counter affidavit had been filed on behalf of the 1st In this counter affidavit, it is stated that an inspection of the premises, given in the registration of the petitioner had been inspected. As the petitioner was not conducting business from the said place, a notice dated 23.08.2024, was issued. In response to this notice, the petitioner submitted an explanation, dated 03.09.2024. In this explanation, it was stated that the petitioner was operating his business in a co-working space, located at Flat No.101, D.No.10-28-2/1/1, Waltair Main Road, Vizag and an another co-working space at D.No.73-1-10/1, IV Floor, Patamata Main Road, Opp Durga Mahal, Vijayawada. The agreements under which these premises were taken by the petitioner are dated 19.10.2023 and 01.08.2024 respectively.
4. It is further stated, in the counter affidavit, that the landlord of the original office in Jammalamadugu, YSR Kadapa, had been contacted regarding the occupation of the premises, by the petitioner. The said landlord informed the respondent that the petitioner had executed a rental agreement but had not occupied the house and subsequently requested to cancel the agreement. It also appears that the property had been transferred to another person who specifically stated that he had no knowledge of the petitioner or the deponent of the affidavit filed in support of this Writ Petition.
5. The 1st respondent had specifically stated that these facts make it clear that the petitioner had never conducted any business from the declared place of business and as such, was in violation of Rule-21(a) of the CGST Rules.
6. Sri Srinivasa Rao Kudupudi, learned counsel for the petitioner, would submit that the petitioner was unable to inform the respondents for a change in business. This was because the assessment of the petitioner was being taken up and the assessment authority had specifically rejected the request of the petitioner for a change in the address, so the assessment file is not transferred out to another authority. He would also submit that the impugned order, dated 13.09.2024, suffers from violation of the principles of natural justice inasmuch as the petitioner was not afforded an opportunity of personal hearing, as mandated under Section -29 of the CGST Act.
7. Smt. Santhi Chandra, learned Senior Counsel appearing for the respondents would draw the attention of this Court to the specific averments, in the counter affidavit that personal hearing was fixed on 04.09.2024, and that the authorized representative of the petitioner had come to the office, of the respondents, on that day, and furnished the detailed written submissions vide letter, dated 03.09.2024. She would submit that in such circumstances, it cannot be held that an opportunity of personal hearing was not given to the petitioner. She would further contend that the authorized representative did not seek any further adjournments or the postponement of the personal hearing and had handed over the detailed submissions. She submits that in such circumstances the opportunity of personal hearing required under Section-29 of the CGST Act, had been given.
8. The petitioner while contending that he was unable to furnish the details of change of address, has not produced any material before us to demonstrate that any attempt was made since October-2023, to inform the authorities about the change of address. Further, the contention of the petitioner that such change of address could not be intimated on account the pending assessment proceedings also cannot be accepted inasmuch as the petitioner was required, under law, to intimate the change of address within 15 days from the date of change, whereas the petitioner, despite shifting office in October-2023, did not choose to make any such application, till 23.08.2024 when the show-cause was issued.
9. 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.
10. Sri Srinivasa Rao Kudupudi, learned counsel for the petitioner would draw the attention of this Court to the last line in the reply, dated 03.09.2024. This line reads as follows:-
“We request a personal hearing to present further details, if necessary”.
11. In the view of this Court, the said request 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.
12. For all the aforesaid reasons, we do not find any reason to interfere with the said impugned Order, dated 13.09.2024 and this Writ Petition is dismissed accordingly. There shall be no order as to costs.
As a sequel, interlocutory applications pending, if any shall stand closed.
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