2021 (9) TMI 786 - HC - Central Excise

Violation of principles of natural justice - adjudicating authority has relied on the report of the Central Revenue Control Laboratory (CRC) to reject the petitioner's explanation - HELD THAT - The report of the CRCL was first confronted to the petitioner on 20.10.2020 and not earlier. Therefore, in the first place adequate opportunity was not granted to the petitioner to object to that report. In absence of any discussion as to the objection thus raised by the petitioner, in the order impugned, and further in view of the further assertion made by the petitioner, the complete copy of the report of the CRCL dated 3.6.2020/13.7.2020 had not been supplied to the petitioner, it is found that the principle of natural justice has been violated, inasmuch as neither the petitioner was confronted with the adverse material within time as to allow it a reasonable opportunity to object to the same nor his objection submitted has been considered in the impugned order. No useful purpose would be served in relegating such a petition to the forum of alternate remedy as was also submitted by the revenue - adjudication order dated 28.10.2020 passed by the Commissioner, Central Tax, GST, Gautambuddh Nagar is hereby set aside - Petition allowed.

Summary

Issues:
Violation of natural justice in adjudication order based on CRCL report without providing opportunity to object.

Analysis:
The petitioner challenged an adjudication order passed by the Commissioner, Central Tax, GST, Gautambudh Nagar, which was based on a report from the Central Revenue Control Laboratory (CRCL) regarding the chemical composition of products "Harvest Plus" and "Cash Plus". The petitioner contended that the order violated the principles of natural justice as they were not given an opportunity to object to the CRCL report. The petitioner raised objections after a virtual hearing on 20.10.2020, pointing out similarities between the CRCL report and a previous report from M/S Cytozyme Sustainable Nutritional Solutions, USA.

The High Court noted that the petitioner was not provided with the complete CRCL report until 20.10.2020, after the hearing had already commenced. The Court found that the petitioner's objections were not considered in the impugned order, indicating a violation of natural justice. Despite the petitioner submitting objections on 26.10.2020, the adjudicating authority failed to address these objections in the final order. The Court emphasized that the petitioner should have been given a reasonable opportunity to object to the adverse material before a decision was made.

In response to a counter affidavit filed by the revenue authorities, it was revealed that the CRCL report was first provided to the petitioner on 20.10.2020. The Court concluded that the petitioner was not granted adequate time to respond to the report, further emphasizing the breach of natural justice. As a result, the Court allowed the writ petition, setting aside the adjudication order and remitting the matter back to the assessing authority for a fresh decision. The Court directed the adjudicating authority to provide the petitioner with a complete hard copy of the test report and allow two weeks for a detailed reply before issuing a new order, ensuring compliance with due process and the principles of natural justice.