2019 (4) TMI 2067 - HC - GST

Principles of natural justice - cross-examination of witnesses have never been provided despite several requests by this petitioner - Department is relying upon the statements of such several witnesses - HELD THAT - It appears from the show-cause notice which is at Annexure-1 that the respondent-department is relying upon the statements of six witnesses whose names have been referred in para 17 of the memo of this writ petition for which cross-examination was sought for by this petitioner. Despite several requests for cross-examination of the witnesses whose names have been referred in para 17 of the memo of the writ petition, the same was never afforded by the respondents. Reliance placed in the case of AYAAUBKHAN NOORKHAN PATHAN VERSUS THE STATE OF MAHARASHTRA OTHERS 2013 (8) TMI 563 - SUPREME COURT where it was held that The aforesaid discussion makes it evident that, not only should the opportunity of cross-examination be made available, but it should be one of effective cross-examination, so as to meet the requirement of the principles of natural justice. In the absence of such an opportunity, it cannot be held that the matter has been decided in accordance with law, as cross-examination is an integral part and parcel of the principles of natural justice. Thus, it has been held by Hon ble the Supreme Court that whenever the Union of India is relying upon the statements of the witnesses in which show-cause notice issued under the Central Excise Act and when the cross-examination is demanded by the assesse, the same ought to be given. In the present case, despite several requests by the petitioner vide his letters dated 10th December, 2010 (Annexure-2), 21st December, 2012 (Annexure-5), 30th September, 2013(Annexure-10 and 10/1), 25th February, 2015 (Annexure-13 and 13/1), 23rd March, 2015 (Annexure-16) and 26th May, 2016 (Annexure-25), the respondents have not granted cross-examination of the witnesses whose names have been referred in paragraph 17 of the memo of the writ petition. Thus, there is violation of principle of natural justice by the Department. Thus, cross-examination of the witnesses whose names have been referred in paragraph 17 ought to have been given by the respondents - the respondents are directed to permit the petitioner to cross-examine the witnesses whose names are referred in paragraph 17 and whose names have been referred in the aforesaid letters which are written by this petitioner. Petition allowed.

Summary

Issues:
Challenge to Order-In-Original for Central Excise dues based on witness statements without cross-examination.

Analysis:
The writ petition challenged the Order-In-Original passed by the Commissioner, Central Excise and Service Tax, Ranchi, dated April 28, 2017, along with a corrigendum dated June 16, 2017. The petitioner contended that the reliance on witness statements in a show-cause notice without providing an opportunity for cross-examination violated the principles of natural justice. The respondents conducted a search of the petitioner's premises in 2006, seized documents, and recorded statements of witnesses, leading to a show-cause notice in 2009. Despite requests for cross-examination of witnesses, the Department did not afford this opportunity, prompting the challenge.

The judgment cited various legal precedents emphasizing the importance of cross-examination in upholding natural justice. Referring to the Supreme Court cases, it highlighted that the denial of the right to cross-examine witnesses amounts to a denial of the right to be heard, violating fundamental principles of justice. The right to cross-examine witnesses was deemed integral to the principles of natural justice, ensuring fairness in legal proceedings and the opportunity to challenge evidence presented against the party.

In light of the legal principles outlined, the Court found that the failure to provide cross-examination opportunities to the petitioner constituted a violation of natural justice. The Order-In-Original was quashed, and the corrigendum was set aside. The respondents were directed to permit the petitioner to cross-examine the witnesses whose statements were relied upon, as well as those mentioned in the petitioner's letters requesting cross-examination. The judgment concluded by allowing the writ petition and disposing of the related application, emphasizing the significance of cross-examination in upholding the principles of natural justice in legal proceedings.