Never Make This Mistake While Requesting a Personal Hearing in GST Proceedings!

High Court Upholds GST Registration Cancellation - A Lesson for All Taxpayers

In a recent High Court judgment, the cancellation of a taxpayer’s GST registration was upheld - even though the taxpayer argued that no personal hearing was granted.
This judgment serves as an important reminder to all taxpayers and GST practitioners - how you write your request for a personal hearing can decide the outcome of your case.

Case Background

The GST department cancelled the taxpayer’s registration because he changed his business address but failed to inform the department within 15 days as required.
Upon inspection, it was found that no business activity was being carried out at the registered premises. Later, it was revealed that the taxpayer was operating from co-working spaces.

Subsequently, the department issued a show cause notice on 23 August 2024.
In reply, the taxpayer responded and added one last line:

“We request a personal hearing to present further details, if necessary.”

The Dispute: Denial of Personal Hearing

The taxpayer later argued that the cancellation order, passed on 13 September 2024, was issued without granting a personal hearing - violating the Principles of Natural Justice.
However, the High Court dismissed this argument and upheld the department’s action as valid.

Court’s Key Observations

1. The Two Words “If necessary” - The Root of the Problem

The Court held that the words “if necessary” made the taxpayer’s request conditional.
This meant that the decision to grant a hearing was left to the discretion of the officer.

The Court observed:

“This is not a clear or categorical request. The taxpayer has left it to the officer’s judgment. Hence, when the officer found no necessity, the order was rightly passed.”

2. Failure to Report Change of Address - A Legal Violation

As per Rule 18 & Rule 21 of the CGST Rules, a taxpayer must notify the department of any change in business address within 15 days.
The taxpayer’s failure to do so was a valid ground for cancellation, the Court held.

3. Department Followed Due Process

The department had issued a notice for personal hearing, and the taxpayer’s representative had attended and submitted a written explanation.
Therefore, there was no violation of natural justice, the Court concluded.

Important Lessons for Taxpayers and GST Professionals

1. Never Write “If necessary” in Your Hearing Request

Wrong:

“We request a personal hearing to present further details, if necessary.”

Correct:

“We request you to grant us a personal hearing to present our clarifications and documents before taking any adverse decision.”
or
“We seek a confirmed opportunity of personal hearing to explain our position before passing any adverse order.”

2. Update Address Within 15 Days

As per Rule 18, any change in business address must be updated on the GST portal within 15 days.
Failure to do so can lead to cancellation under Rule 21(a) & (b).

3. Written Replies Can Be Treated as Hearings

The Court clarified that if a taxpayer does not explicitly and unconditionally request a hearing, the written reply itself may be considered as the personal hearing.

4. Maintain All Records and Evidence

• Always keep proof of all submissions made on the GST portal - replies, hearing requests, and documents.
• Avoid ambiguity in your communication.

Final Judgment

The High Court upheld the department’s cancellation order and dismissed the taxpayer’s petition, observing that:

• The department complied with the principles of natural justice.
• The taxpayer’s request for a hearing was not explicit or unconditional.
• The taxpayer violated the law by not updating the address within the prescribed time.

Hence, the registration cancellation was legally valid.

Key Takeaway for Professionals

This case clearly shows that even a single word can change the outcome of a tax proceeding.
GST practitioners must draft every reply and application with clarity and precision.

“The power of your words can be as strong as the power of the law.”

Conclusion

• Always make your request for a personal hearing clear and unconditional.
• Report any change in business address within the stipulated time.
• Keep all replies and communications documented and unambiguous.

Following these principles can protect taxpayers from unnecessary GST disputes.

Prepared by:
Dr. Muhammed Musthafa C.T.
Senior Tax Consultant & Managing Director, BRQ Associates

“For a tax-aware India - one step forward.”

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