2020 (2) TMI 1661 - HC - Central Excise

Principles of natural justice - non-grant of opportunity for cross-examination of the witnesses - Reliability of statements of witnesses - HELD THAT - The Court is of the view that the order, which has been rendered is essentially based upon the statements, which have been relied upon by the department, then the persons making those statements were required to be permitted to be cross-examined by the petitioner. In the instant case, this Court also do not propose to examine any other aspect or merits, else it would not be proper thereafter to remand the matter and as the counsel for the respondents also could not controvert or dispute the settled proposition of law and as it is also not disputed that the statements, which have been taken into consideration for casting the order, the persons making those statements have not been permitted to be cross-examined on the perception that the same was only a delaying tactic - Therefore, without observing anything further on the merits, the order is required to be quashed and set aside only on the ground of authority s denial to grant cross-examination, as requested, had vitiated the order and, therefore, the concerned respondent no.2 shall afford an opportunity to cross-examine the persons, authorities, whose statements have been relied upon as well as the officers involved in the investigation and cast the order afresh after applying mind to the facts and circumstances of the case and it may be observed at this stage that so far as other merits are concerned, the Court has not gone into and it would be absolutely appropriate to the authority to apply its mind and pass appropriate order as expeditiously as possible. Petition disposed off.

Summary

Issues Involved:
1. Opportunity for cross-examination of witnesses.
2. Principles of natural justice.
3. Validity of order based on statements without cross-examination.
4. Denial of cross-examination as a delaying tactic.
5. Authority's obligation to grant cross-examination.
6. Legal implications of non-granting of cross-examination.
7. Remand of the matter for cross-examination.

Analysis:

1. Opportunity for Cross-Examination:
The petitioner contended that the non-granting of an opportunity for cross-examination of witnesses, whose statements were relied upon by the authority, violates the principles of natural justice. The petitioner sought a remand of the matter to the authority for cross-examination based on established legal precedents supporting the significance of cross-examination in ensuring fair proceedings.

2. Principles of Natural Justice:
The Court acknowledged the well-established legal principle that the denial of an opportunity for cross-examination of witnesses, despite demand, can vitiate an order. The petitioner cited various judgments supporting this proposition, emphasizing the importance of adhering to the principles of natural justice in administrative proceedings.

3. Validity of Order Based on Statements Without Cross-Examination:
The Court noted that the impugned order was primarily based on statements of individuals without affording the petitioner the opportunity to cross-examine them. This raised concerns about the validity of the order and highlighted the necessity for the authority to allow cross-examination to ensure a fair and transparent decision-making process.

4. Denial of Cross-Examination as a Delaying Tactic:
The authority's rejection of the request for cross-examination was challenged by the petitioner, who argued that such denial was unjustified and amounted to a mere tactic to delay the proceedings. The Court scrutinized the authority's reasoning behind denying cross-examination and concluded that it was imperative to grant the petitioner the opportunity to cross-examine the relevant witnesses.

5. Authority's Obligation to Grant Cross-Examination:
The Court emphasized that when an order is predominantly based on statements of individuals, it is essential to allow for cross-examination to uphold the principles of natural justice. The authority was directed to afford the petitioner the opportunity to cross-examine the concerned persons and officers involved in the investigation before issuing a fresh order based on a comprehensive assessment of the case.

6. Legal Implications of Non-Granting of Cross-Examination:
The judgment highlighted the legal implications of denying cross-examination, citing previous decisions that upheld the right of affected parties to cross-examine witnesses regardless of their access to the evidence on record. The Court underscored the significance of this procedural safeguard in maintaining the integrity and fairness of adjudicatory processes.

7. Remand of the Matter for Cross-Examination:
Ultimately, the Court quashed and set aside the order on the grounds of the authority's failure to grant cross-examination, which was deemed to have vitiated the order. The authority was instructed to allow cross-examination, reassess the case, and issue a fresh order expeditiously while ensuring due consideration of all relevant facts and circumstances. The judgment concluded by disposing of the petition with the ruling in favor of the petitioner, without imposing any costs.