2020 (3) TMI 378 - HC - Service Tax

Principles of natural justice - opportunity for cross-examination denied - alleged evasion of tax - HELD THAT - There are no merit in this appeal. The question of cross-examination of petitioner No.2 by himself and the adjudicating authority does not arise. Even otherwise, the rights of the petitioners are protected. The liberty is granted to the petitioners to adduce any evidence to substantiate their stand and the respondents - authority was also directed to consider the same and pass appropriate orders. Therefore, there is no denial of the rights of the petitioners. The order of the learned Single Judge is sufficient and well reasoned to protect the legal rights of the petitioners. They are entitled to make a statement or otherwise as held by the learned Single Judge - there are no good ground to consider the case of the petitioners - appeal dismissed.

Summary

Issues:
Challenge to show cause notice for service tax liability, denial of permission to cross-examine witnesses, granting opportunity to adduce evidence, right to cross-examination, appeal against the order of the Single Judge.

Analysis:
The judgment pertains to an appeal against an order passed in response to writ petitions challenging a show cause notice for service tax liability. The petitioners, a private limited company and its Managing Director, contested the notice issued by the Deputy Commissioner of Central Excise. The petitioners claimed to have discharged their service tax liability using cenvat credit and cash but faced allegations of not declaring the credit utilization in their returns, leading to a demand for alleged short paid service tax. The petitioners further alleged coercion and arrest by the authorities, highlighting a denial of permission to cross-examine witnesses.

The Single Judge, after considering the arguments, directed the petitioners to adduce evidence to substantiate their case, emphasizing the need for a fair opportunity to present their objections and evidence. The Judge observed that while the request for cross-examination of witnesses by the petitioners themselves was deemed inappropriate, the overall circumstances warranted providing a chance to present evidence. The proceedings were thus restored to the Commissioner of Central Excise and Service Tax for further consideration, with instructions to allow the petitioners to file replies, objections, and evidence, ensuring a fair hearing.

In the appeal, the appellants contended the denial of the right to cross-examination, which was disputed by the respondents. Upon hearing both parties, the Court found no merit in the appeal. The Court clarified that the question of cross-examining the petitioners themselves and the adjudicating authority did not arise, as the rights of the petitioners to adduce evidence were preserved. The judgment emphasized the protection of legal rights and the liberty granted to the petitioners to substantiate their position through evidence. Ultimately, the Court upheld the order of the Single Judge as sufficient and well-reasoned in safeguarding the rights of the petitioners, leading to the dismissal of the appeal.