You should never get an XML declaration when you output using method="text".
One possible explanation is that the XSLT processor isn't doing the serialization - perhaps you are writing the output to a DOM, and then serializing using the DOM serializer.
But I notice that your xsl:output specifies name="GML", so it will only affect output written using <xsl:result-document format="GML">.
Michael Kay
http://www.saxonica.com/
Author, XSLT Programmer's Reference and XPath 2.0 Programmer's Reference