JSW Steel Limited Vs Joint Commissioner of Central Tax (Karnataka High Court)
Denial of Cross-Examination of third parties in GST Adjudication Violates Natural Justice Principles
The Hon’ble Karnataka High Court in the case of JSW Steel Limited v. Joint Commissioner of Central Tax & Ors. [W.P. No. 12061 of 2025, order dated August 13, 2025] held that denial of opportunity to cross-examine third-party witnesses, whose statements were relied upon to confirm GST demand against the petitioner amounted to violation of principles of natural justice and rendered the adjudication order null and void.
Facts:
JSW Steel Limited (“the Petitioner”) entered into a Memorandum of Understanding with Larsen & Toubro Ltd. (“L&T”) for supply of steel products, which involved certain turnover discounts (TOD) and credit period terms.
The Joint Commissioner of Central Tax and Directorate General of GST Intelligence (“the Respondents”) initiated an investigation alleging GST evasion by the Petitioner, relying partially on statements recorded from representatives of L&T.
The Petitioner contended that TOD amount was neither payable nor paid and no interest was received, submitting evidence and repeatedly requesting opportunity to cross-examine L&T representatives whose statements were recorded and relied upon.
The Respondent contended that cross-examination was unnecessary as statements were voluntarily given and maintained that denial of cross-examination did not cause prejudice, relying on Supreme Court precedents such as Surjeet Singh Chhabra and Telangana High Court decisions.
