DENIAL OF CROSS EXAMINATION OF WITNESSES IS AN APPEALABLE ORDER

[Mr. M. GOVINDARAJAN]

Cross examination

In law, cross-examination is the interrogation of a witness called by one's opponent.  When the lawyer for the plaintiff or the government has finished questioning a witness, the lawyer for the defendant may then cross-examine the witness. Cross-examination is generally limited to questioning only on matters that were raised during direct examination. Cross-examination is a key component in a trial and the topic is given substantial attention during courses on Trial Advocacy. The opinions by a jury or judge are often changed during cross examination if doubt is cast on the witness. In other times a credible witness affirms the belief in their original statements or in some cases enhances the judge's or jury's belief.

Cross-examination serves two primary purposes: Destructive Cross - Cross-examination can be used to discredit the testifying witness or another witness. This may be accomplished in several ways including attacking the credibility of the witness or testimony.  Once the examination in chief of a witness has been completed, he may be cross-examined by the opposite party, i.e., accused person in a criminal case. Usually, the cross-examination can be conducted only once till it is completed.

Cross examination in taxation matters

The proceedings for the tax laws are generally of summary trial procedure. Examination of witness and cross examination of witnesses is very rate in tax laws either in direct tax matters or indirect tax matters.  Whether it may be said that cross examination is not at all required in taxation matters?  The answer could be no but the same is not a general procedure.  The assessee may request the Authorities to give him a chance to cross examine the witness.  The same may be rejected or accepted on considering the facts and circumstances of the case.

Denial of cross examination – appealable?

The issue to be discussed in this article is whether the order issued by the Adjudicating Authority, rejecting the request of the assessee to cross examine certain officers or persons involved in his taxation  matter, is appealable or not.  Diversified views are taken by the Tribunals and High Court.  Let us see some case laws in this regard.

In ‘Mulchand M. Zaveri v. Union of India’ – 2016 (4) TMI 1074 - GUJARAT HIGH COURT the High Court held that the stand of the petitioner that the cross examination must be allowed before the petitioner even filed a final reply to the show cause notice, cannot be accepted.

In ‘Ramesh Govindbhai Patel v. Commissioner of Customs (Airport), Mumbai - 2007 (3) TMI 496 - CESTAT, MUMBAI the Tribunal held that a letter by the Superintendent intimating the date of personal hearing before the adjudicating authority and refusal to grant cross examination is not an appealable order under section129A of Customs act, 1962. 

In ‘K.P. Manish Ingredients Global Private Limited v. Additional Commissioner’- 2017 (9) TMI 1456 - MADRAS HIGH COURT, the petitioner filed a petition seeking the cross examination of the officers without denying their reports or making such officer respondents in the writ petition.  In that factual scenario the High Court dismissed the writ petition.

In ‘Ganphat Rai Shri Ram & Company v. Commissioner of Customs (Port), Kolkata, - 2020 (3) TMI 359 - CESTAT KOLKATA, the appellant has imported goods through Kolkata Customs Port declaring them 100% Polyester Bed Cover/Quit Cover classifying the said product under Customs Tariff Heading 6304.  The intelligence gather by the Directorate of Revenue Intelligence, Kolakata, showed that unscrupulous importers were importing polyester woven fabrics classifiable under CTH 54-7 and mis declared them as polyester woven fabrics classifiable under CTG 5407 and mis declared them as Polyester bed cover/quilt.  The officers are the DRI conducted enquiries and examined the goods imported by the asssessee and also sent them for test to the Ahmadabad Textile Industry’s Research Association (ATIRA), Ahmadabad and Textile Committee, Bombay.

The said two organizations sent their reports to the Revenue.  On the basis of the said two reports a show cause notice was issued by the Revenue on 04.02.2019 proposing to reject the classification sought by the assessee and accordingly demands the differential duty.  The show cause notice also proposed to confiscate the goods under section 111 and imposed penalties.  The assessee was given 30 days time to reply to the show cause notice.  The assessee did not give reply to the show cause notice.  The Adjudicating Authority fixed the personal hearing on 04.06.2019 at 12.00 pm.  The intimation of personal hearing was sent by the Deputy Commissioner of Customs vide the impugned order.  Even though the assessee did not file any reply to the show cause notice sought cross examination from the Ahmadabad Textile Industries’ Research Association, Ahmadabad and Textiles Committee, Bombay. The Adjudicating Authority denied the request of the assessee and the denial was also communicated through the impugned order.  Against this order the assessee filed an appeal before the Tribunal.

The appellant submitted the following before the Tribunal-

• The entire show cause notice is based on the reports of ATIRA and Textile Committee, Bombay and therefore the appellant should be given an opportunity for cross examining these officials so that they can defend against the allegations made in the show cause notice.
• By denying the cross examination, the principles of natural justice have bene denied by the Commissioner as intimated by the Deputy Commissioner.
• The order denying the cross examination may be set aside.

The Revenue submitted the following before the Tribunal-

• The appeal is not maintainable at all because it was against the letter issued by the Deputy Commissioner of Customs, against which, no appeal lies before the Tribunal.
• The letter in question was only a notice intimating the date of personal hearing fixed by the Commissioner of Customs and this cannot be interfered with by the Tribunal.
• The Commissioner, as an Adjudicating Authority has also taken a decision in order to deny cross examination of the ATIRA and Textile Committee, Bombay, this denial is, in itself, not a final decision, against which an appeal can be filed.
• The Tribunal cannot go into how the adjudicating authority should conduct the adjudication proceedings.
• If there is infirmity in the decision after it has been taken above, an appeal will lie to this tribunal.
• The appellants have not even filed a written reply refuting the allegation made in the show cause notice and therefore, the question of cross examination does not arise.

The Tribunal considered the arguments put forth by the appellant and the Revenue.  The Tribunal observed that the entire show cause notice rests on documents namely, test report of ATIRA and Textile Committee, Bombay. There are no other relied upon documents in the show cause notice. Both these reports disputed the classification and description of the impugned goods claimed by the assessee.  Under these circumstances the Tribunal was of the opinion that there would be grave injustice, if the appellant is not allowed to cross examine the author of two test reports.   Any adjudication order passed by denying such cross examination is unlikely to sand the test of legal scrutiny.  The appellant is also careless in not even filling a written reply to the show cause notice but only seeking cross examination of the above. 

The Tribunal also examined the maintainability of the appeal, which is not against the adjudication order, but only against a letter of lower authority communicating the decision of the adjudicating authority to deny the cross examination.  In the facts and circumstances of the present case, since the entire show cause notice is based only on the reports of ATIRA and Textile Committee, Bombay, the Tribunal was of the opinion that the letter issued by the Deputy Commissioner, communicating the decision of the Adjudicating Authority to deny the cross examination, is a significant decision which falls within the ambit of section129A of Customs act, 1962 as a decision by the Adjudicating Authority.  Therefore the Tribunal the present appeal is maintainable.

The Appellate Tribunal further held that the Commissioner shall allow the  cross examination  of the officer, whose tests reports are relied upon for the issue of show cause notice.