Case Law Details
MNS Enterprises Vs Additional Commissioner of GST and Central Excise (Madras High Court)
The Madras High Court dismissed writ petitions challenging a common GST assessment order on the ground that the petitioners were denied an opportunity to cross-examine Mr. Joseph Selvaraj, whose statement had been relied upon. The petitioners argued that cross-examination was necessary because a Magistrate had recorded that Mr. Selvaraj had alleged ill-treatment by GST officials. The respondents contended that the assessments primarily related to fraudulent availment of Input Tax Credit (ITC), which could be rebutted through documentary evidence establishing genuine supplies. The Court held that, in quasi-judicial proceedings, the right to cross-examination is not absolute. Since the allegations could have been countered through documents such as invoices, e-way bills, and transportation receipts, denial of cross-examination did not vitiate the proceedings. However, the Court permitted the petitioners to pursue statutory appeals and directed the appellate authority to decide them on merits if filed within 30 days, subject to compliance with pre-deposit requirements.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
In these three writ petitions, a common order-in-original assessing tax liability is challenged.
2. The primary ground of challenge is that the respective petitioner was not permitted to cross-examine Mr. Joseph Selvaraj, whose statement was relied upon.
3. Learned counsel, appearing for all the petitioners, refers to the order-in-original, wherein the observations of the Additional Chief Metropolitan Magistrate, E.O.II, Egmore, are recorded. He points out that the Magistrate recorded that bruises and injuries were noticed on the body of Mr. Joseph Selvaraj and that he stated that he was ill-treated by the officials of the GST Department. Because the statement of said individual was relied upon, he contends that it was just and necessary for the respective petitioner to cross-examine Mr.Joseph Selvaraj. Learned counsel contends that denial of right of cross-examination contravenes the principles of natural justice.
4. This contention is countered by the respondents by submitting that the tax liability was imposed on the respective petitioner primarily on the ground of fraudulent availment of Input Tax Credit (ITC). It is also submitted that the petitioners could have established that they were entitled to avail of ITC by submitting documentary proof that supplies made to them were genuine and legitimate.
5. In quasi-judicial proceedings, the right of cross-examination is not absolute. In the case at hand, the allegation against the respective petitioner was that ITC was availed without a genuine supply being made. This could have been countered by filing an appropriate reply enclosing documents such as invoices, e-way bills, transportation receipts and the like. In this factual context, mere denial of right of cross-examination does not vitiate proceedings against the respective petitioner. Consequently, I am not inclined to exercise discretionary jurisdiction.
6. Nonetheless, it may be possible for the respective petitioner to establish that the ITC availed of was valid by placing on record material documents. Being a dispute involving factual aspects, it would be appropriate that this dispute be carried to the statutory appellate forum. These writ petitions were lodged shortly after the limitation period expired and within the condonable period.
7. Considering the aforesaid, these Writ Petitions are disposed of on the following terms:
(i) The respective petitioner is permitted to file a statutory appeal against the order impugned herein; and
(ii) If such appeal were to be presented within 30 days from the date of receipt of a copy of this order, the appellate authority is directed to receive and dispose of the same on merits, subject to compliance with the pre-deposit requirements in that regard.
Consequently, connected miscellaneous petitions are closed. There shall be no order as to costs.
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