Joint Commissioner Vs Nishad K.U. (Kerala High Court)
Kerala High Court has affirmed the crucial role of natural justice, including the right to cross-examination, in proceedings under the Central Goods and Services Tax (CGST) Act, 2017. In a significant intra-court appeal, Joint Commissioner Vs. Nishad K.U., the division bench upheld a single judge’s decision that denied cross-examination rights constituted a violation of natural justice, thereby rendering the tax and penalty order of over Rs. 9.40 Crores invalid.
The case originated from proceedings initiated under Section 74(9) of the CGST Act against Nishad K.U., where a substantial tax and penalty were imposed. Nishad K.U. approached the writ court, bypassing the alternate remedy, on the grounds of a serious infraction of natural justice. The core of his contention was the authorities’ refusal to allow him to cross-examine individuals whose statements were relied upon to impose the penalty.
The appellants, representing the tax authorities, argued that the CGST Act does not explicitly mandate granting cross-examination opportunities. They contended that the learned Single Judge erred by relying on the Supreme Court’s decision in Andaman Timber Industries v. Commissioner of Central Excise, Kolkata-II (2016), asserting that it did not consider earlier binding three-judge bench decisions in Kanungo & Co. v. Collector of Customs, Calcutta (1983) and Surjeet Singh Chhabra v. Union of India (1997), which, according to them, indicated no legal requirement for such an opportunity.
