Shree Salasarji Metal Industries vs. Union Of INDIA

Held

The High Court allowed the writ petitions. The Court found that the issue was directly covered by established legal propositions. The Court acknowledged that the petitioners' right to cross-examine witnesses, whose statements were proposed to be relied upon for confirming any part of the show cause notice, was upheld in various precedents. The respondent's counsel could not dispute this legal position. Consequently, the impugned orders were quashed and set aside. The Court directed that the adjudicating authority shall offer for cross-examination those witnesses whose statements are proposed to be relied upon for confirming any part of the show cause notice. This means if the competent authority relies on any witness's statement, that witness must be permitted to be cross-examined.

Facts

The petitioners, Shree Salasarji Metal Industries, filed two writ petitions challenging letters/orders dated February 16/19, 2018, and January 23/24, 2018, issued by the Commissioner, Central Excise GST and Central Excise, Gandhinagar. These orders denied the petitioners' request for cross-examination of witnesses during an investigation. The denial was based on the premise that the partner of the petitioner firm had already availed the opportunity to examine the veracity of documentary and oral evidence gathered through panchnamas and other means. The petitioners argued that this denial violated their right to natural justice.

Key Issues

1. Whether the denial of the petitioners' request for cross-examination of witnesses, despite the opportunity to examine documentary evidence, violates the principles of natural justice and the right to a fair hearing under Article 226 of the Constitution of India? Petitioner's Argument: The petitioners contended that the denial of cross-examination was erroneous. They relied on several High Court judgments, including Mulchand M. Zaveri v. Union of India, Commissioner of Central Excise, Ahmedabad-II vs. Gujarat Cypromet Ltd., Commissioner of Central Excise & Customs vs. Chandan Tubes & Metals Pvt. Ltd., and Manek Chemicals Pvt. Ltd. vs. Union of India, as well as the Supreme Court decision in Andaman Timber Industries vs. Commissioner of Central Excise, Kolkata-II. These precedents, they argued, clearly uphold the right of an affected party to cross-examine witnesses, irrespective of whether they had prior access to the material on record. Revenue's Argument: The learned counsel for the respondent was not able to dispute the proposition of law presented by the petitioners. They suggested that the Court might pass an order treating the case as peculiar.