United Spirits LTD. Thrugh Its Authorised Representative vs. The Union Of INDIA Through The Secretary And Anr.

Held

The Court held that the petitioner's complaint was not one of total non-compliance with the principles of natural justice, but rather of insufficient compliance. The petitioner had been issued a show cause notice, responded to it, was furnished with relied-upon material, and was afforded a hearing. The denial of cross-examination was reasoned, though the sufficiency of those reasons could be agitated in appeal. The Court found that the petitioner had not made out a case for bypassing the alternate and efficacious remedy of appeal. The decisions relied upon by the petitioner were distinguished, either because they involved a complete lack of dealing with the cross-examination plea (Andaman Timber Industries, Parmarth Iron Pvt. Ltd., Basudev Garg), or because the facts were peculiar and did not involve challenging a final appealable order (Kalpena Industries Ltd.). The Court noted that the right to cross-examination is not indefeasible and that the Adjudicating Authority had relied on other materials besides the statements in question (Jindal Drugs Pvt. Ltd.). The Court concluded that the petitioner had not demonstrated prejudice arising from inadequate opportunity, which would require factual adjudication best suited for an appeal. Therefore, the petition was dismissed, but with liberty to file an appeal within two weeks, requesting the Appellate Authority to entertain it on merits.

Facts

The petitioner, United Spirits Ltd., filed a writ petition challenging orders dated February 20, 2018, and corrigenda dated March 12 and 23, 2018, issued by the Commissioner of CGST and Central Excise, Nashik. These orders disposed of a show cause notice dated August 1, 2017. The petitioner argued that the orders were passed in breach of principles of natural justice because their request for cross-examination of employees, whose statements were relied upon, was denied without cogent reasons. The respondents contended that an alternate and efficacious remedy of appeal to the CESTAT was available, and therefore, the High Court should not interfere under Article 226/227 of the Constitution. The petitioner relied on several High Court and Supreme Court decisions to support their claim of violation of natural justice.

Key Issues

1. Whether the impugned orders, which disposed of the show cause notice, were passed in breach of the principles of natural justice, specifically concerning the denial of the petitioner's request for cross-examination of employees whose statements were relied upon, thereby warranting the exercise of extraordinary writ jurisdiction under Article 226/227 of the Constitution, bypassing the alternate remedy of appeal? (Question of mixed law and fact, turning on principles of natural justice and Section 14 of the Central Excise Act, 1944). Petitioner's arguments: The impugned orders violated principles of natural justice as the request for cross-examination of employees was denied without cogent reasons, constituting a good ground for quashing the orders and remanding the matter. Reliance was placed on Andaman Timber Industries, Parmarth Iron Pvt. Ltd., Kellogg India Pvt. Ltd., Basudev Garg, Kalpena Industries Ltd., and Jindal Drugs Pvt. Ltd. Respondents' arguments: The case did not involve a violation of principles of natural justice, and in any event, the petitioner had an alternate and efficacious remedy of appeal, so the High Court should not interfere.