M/S. Bharani Commodities vs. Union Of INDIA
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The petitioners, M/s. Hyderabad Steels and M/s. Bharani Commodities, filed writ petitions challenging an order dated March 10, 2021, passed by the Additional/Joint Commissioner, Central Tax, Hyderabad GST Commissionerate. This order rejected their request to cross-examine witnesses whose statements were relied upon in show cause notices dated December 30, 2019. The petitioners argued that this rejection was arbitrary, illegal, and violated principles of natural justice. The High Court had granted interim orders staying further proceedings on the show cause notices. In response, the revenue authorities filed a counter-affidavit stating that the impugned letter dated March 10, 2021, was recalled and the request for cross-examination would be considered on a case-to-case basis, depending on relevance for adjudication.
Held
The Court noted that the revenue authorities, through a letter dated July 23, 2021, had recalled the impugned order dated March 10, 2021. While recalling the order, the authorities observed that the petitioner would be permitted to cross-examine witnesses, but this would be on a case-to-case basis, depending on the relevance for adjudication proceedings. The petitioner expressed apprehension that this condition might lead to arbitrary denial of cross-examination. The Court acknowledged that once permission for cross-examination is granted, authorities are expected to take a pragmatic view. However, it also cautioned the petitioner against unnecessary or irrelevant cross-examination. The Court disposed of the writ petitions in light of the order dated July 23, 2021, directing the authorities to ensure the show cause proceedings were recalled at the earliest and that cross-examination was carried out promptly. The Court did not decide on the transfer of proceedings.
Key Issues
1. Whether the order dated March 10, 2021, rejecting the petitioner's request for cross-examination of witnesses, was arbitrary, illegal, and violative of the principles of natural justice, particularly in light of the reliance placed on witness statements in the show cause notice? 2. Whether the petitioner should be permitted to cross-examine the witnesses whose statements were referred to and relied upon in the show cause notice? Petitioner's Arguments: The petitioner contended that the rejection of their request to cross-examine witnesses was arbitrary, illegal, and violated the principles of natural justice. They argued that the statements of these witnesses formed the basis of the show cause notice, and denying cross-examination would prevent them from effectively defending themselves. They sought to set aside the impugned order and be permitted to cross-examine the witnesses. They also sought transfer of proceedings to an SGST officer. Revenue's Arguments: The revenue authorities, in their counter-affidavit, submitted that the impugned letter dated March 10, 2021, was recalled. They stated that the request for cross-examination would be considered on a case-to-case basis, depending on its relevance for the adjudication proceedings. They did not explicitly argue against the principle of cross-examination but indicated a conditional approach.
Sections Cited
Section 129
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Cause title — parties, addresses and appearances
The Court made the following: COMMON ORDER
TEE HON'BLE SRI JUSTICE P.SAM KOSI{Y AND THE HON'IILE SRI JUSTICE LAXMI NARAYANA..A.LII]JIIETTY W.P. Nos. 6857 and 6a66 of :ZO21- COMMON ORDTiR:(per Ibtt'ble Sn,ltstice P.SAM KOSHI|.) Heard Sli Vedula Srinivas, learned Senior Cour sel for the petitioner and Sri B. Narilsimha Sarma, learn:d Senror Crounsel for Central Ta><es irppearing lbr rcspondent Nos.2 to 4 ir both the writ petitions.
The prest,n I writ petitions have been fileci assai .ir-rg1 the action on thc part o' respondent No.3 in rcjcctir4l the requost of the petitioner vide order date,cl 1O.03.2021 seekir g to p,trrnit to cross examine the rvilncsses u'hose statements are referr:cl to and relied upon ir-r l ile sh )\ ' causc .otice dated 30.12.20 L9 isr;r-red against the petitioner. 3. 'fhis cour r, r,'"'hile enrertaining rhc writ petitic nr; had granted int-erim orders i r [a\.or]r of the petitioner from p-oceerli;'rg further with the shcr',v cause notice dated 30. 12.2O1 _e.
Responde-rt Nos. L to 4 had already entere<l app(la rance and had filed their counter atTideLvrt. ln the said crunter aflirtavit. the respondents h::<l takeri a specifi,:: stancl, which is repr.cl rce c herein: "6.2- i1 s sul_.rrit1cd thar. in vicw of the l ugr: am,tur.rt of rever)ue involvr,i and Lrr!ue ciclay in _aking up the adjudir:a ion r,r o,:er:clrng:., rhe impugnc{ lettrrr dirted I 0.03.20 2 1, is rc.:alicd :,nc1 i1,., rc quest f- ..,,"" cxrrn: jnaLion is consid:r,_.cl, on casc t(, cill(: :)asis, basing r n the rc evzrce
2 for the adjudication proceedings. The same is intimated to the petitioncrs vide letters dated 23.Q7 -2027" .
However, from the perusal of the pleadings, we find that the said order of the recalling of the letter dated lO.O3.2OT. was not part of the return and therefore, had instructed the counsel for the respondents to make available the said document dated 23.O7.2021. 6. Today, when the matter is taken up for hearing, iearned counsel for the Department had produced the correspondence dated 23.07 .2021 passed by the Additional Commissioner, wherein, it is stated that the respondent authorities had recalled the impugned office letter dated 10.03.2021 which is under challenge in the present writ petition. While recalling the said order dated 10.O3.2021, the authorities concerned, however, made an observation that the petitioner would be permitted to cross examine the witnesses. However, the cross examination shall be on case to case basis, basing on the relevance for adjudication proceedings. 7 . The learned Senior Counsel for the petitioner only has an apprehension, that the said point which has been put by the respondents while passing the recall order dated 23.O7.2021 should not mean that the respondents would arbitrarily deny cross examination of the relevant witnesses whose statements are referred to and relied upon in the show cause notice. It goes without saying that once when the Department has granted permission to cross examine the relevant witnesses, the authorities are expected to take a 3 pragmatic view on the req.ucst of the petitione' so 1ar asi the cross examination is concerned. Nonetheless, the petiltorrer a,so should not subject the witnesses by unnecessarily cross exrmininp, orL irrelevant issues or in rr:spect of matters which are not rel'ec1ed in the statement of the said witnesses.
In view o the aforesaid observations anl in ,h: light of the order dated 23.C7 .2021 , the present writ petitior s sta;rc1s dir;posed of. The authorities,roncerned are direcled to ensure that tle show cause proceedings are recalled at the earliest and the ltetrticnr:r also should render all co-ol)eration in the show cause proccecings zrnd shall ensure that the cr-oss exan-rination is carried oL t at t h(: ezLrliest. No order as to cosLs. Consequer tl',., miscellaneous petitrons pending, if eury, s.ea11 stand closed MOHD. SAN,\UI.LAH ANSARI ASSISiT,\NT REGISTRAR ///I A 56:gllr)N oFFICER To, 1. 2. a 4. The Joint Secr)tary, Department of Revenue, Ministry of Fin'ance, At North Block, New Del ti, Union of lndia - 110001 . ihu iunir"t Aorid of lndirect Taxes and Customs, At Nortl- Bbck, New Delhi - 11000'
The--AdOitiona / Joint Commissioner Centra Tax, HyJc'rabad GST CommisSonerate, GST Bhavan, LB Stadium Road, Hyde'abad -500004' i# Chi"i Conrmissioner, Central Tax, Hyderabad GST Corr missionerate, GST Bhavan, L3 Stadium Road, Hyderabad - 5O0Ol4. One CC to SRI VEDULA SRINIVAS, Advocate tOPJCI o;; cci-oSnt enot PRAVEEN KUIMAR, DEPUTY sollllrc)R GENERAL OFluotl, Higl Court for the State of Telansana 9!ltylelqtFd-lll-lUgl^. one c-C to SHt a.NnRAstMHA SARMA, sr. couNSEL Fol cT toPUCl Two CD Copie: E 6 7 BSR GJP
HIGH COURT DATED: 27101t12023 COMMON OFIDER ? [ ']lJ',Sn ,l -.4 .11' ' - ; ' tlt' IiTATe l'J ll i r.! -) WP.Nos.6857 and 6866 of 2021 DISPOSING I}OTH THE WRIT PETIT'IONS, WITHOUT CC)STS o ) to (\\ \,-
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.