No Evidence of Business at Declared Place: AP HC Upholds GST Cancellation under Rule 21(a) of CGST Rules [Read Order]

The Andhra Pradesh High Court has upheld the cancellation of GST ( Goods and Services Tax ) registration, observing that the taxpayer had not conducted any business from the declared place of business and failed to notify a change in address within the statutory period.

The Court ruled that such conduct amounted to a clear violation of Rule 21(a) of the Central Goods and Services Tax (CGST) Rules, 2017, which empowers authorities to cancel registration where no business is carried on from the registered premises.

The petitioner-company DNC Infrastructure Private Limited was registered under the CGST Act, 2017. The Superintendent of Central Tax, Proddatur-II Range, issued a show-cause notice dated 23 August 2024 proposing cancellation of registration.

The notice alleged that the petitioner was not operating from the declared business address at D.No. 21-582, Munireddy Colony, Jammalamadugu, Kadapa District, and was issuing invoices without actual supply of goods or services.

Following an inspection and a panchanama, the authorities concluded that the registered premises were found locked and that no business activity was being carried out there. Subsequently, an order dated 4 September 2024 was passed cancelling the registration.

The petitioner contended that it had shifted operations to co-working spaces located in Vizag and Vijayawada and was unable to update the change of address because of pending assessment proceedings.

It was further argued that the cancellation order was issued without granting a fair opportunity of personal hearing, thereby violating Section 29(2) of the CGST Act and the principles of natural justice.

The Counsel for the petitioner claimed that a hearing was requested in the written reply dated 3 September 2024, and the authorities erred in proceeding with cancellation the very next day.

The Revenue, represented by Senior Standing Counsel Smt. Santhi Chandra, submitted that the taxpayer never conducted business from the registered address and that the landlord of the premises confirmed the petitioner had entered into a rental agreement but never occupied the property. The premises were later transferred to another individual who denied any knowledge of the petitioner.

The Department also maintained that a personal hearing notice was issued for 4 September 2024 and that the petitioner’s authorised representative had appeared before the authority and filed a detailed written submission. The officer, therefore, concluded that due process had been followed.

The Division Bench observed that the petitioner failed to provide any proof that it had ever carried on business from the declared premises.

Further, the company had not intimated the change of address within 15 days as required under the GST provisions. The plea that the change could not be recorded due to ongoing assessments was rejected as unsustainable.

Justices Raghunandan Rao and T.C.D. Sekhar also dismissed the argument regarding denial of personal hearing, noting that the authorised representative had appeared on the scheduled date and filed written submissions without seeking an adjournment.

The Court held that the line in the reply stating, “We request a personal hearing to present further details, if necessary,” did not amount to a clear request for a further date.

The High Court, holding that the GST officer’s order was consistent with Rule 21(a) of the CGST Rules, ruled that the petitioner had violated registration conditions by not maintaining business operations at the declared address. Consequently, the writ petition was dismissed, and the cancellation of registration was upheld.

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